Long term short-seller Citron Research now bets on Tesla

Although Tesla’s critics have focused on Elon Musk’s behavior, the numbers coming out of Tesla are pretty compelling.

In an interesting turn of events, long-time Tesla short seller and critic Citron Research, in its research note stated it is betting that the electric automaker’s stock will rise. With the news reaching the market, Tesla Inc’s shares jumped by more than 12%.

Its research note also mentioned that Tesla’s Model 3 sedan is a “proven hit” and poses a serious competition for other automakers in the plug-in car market.

Tesla is set to release its third-quarter results later today – a week earlier than it has typically reported.

Tesla’s enigmatic Chief Executive Elon Musk has promised that a Model 3 ramp-up will help make Tesla profitable in the quarter; Musk also stated Tesla will not have to sell more shares to raise cash.

However a number of Wall Street analysts opine that the ramp-up, added to other production promises and debt obligations, is likely to lead to some sort of raising of capital likely.

“I would not short this again. I understand that industry better and I think the company just turned the corner,” said Left.

Despite Citron Research’s u-turn, Ihor Dusaniwsky of financial analytics firm S3 Partners said, Tesla short-sellers had been adding positions over the last week and the company has the second-biggest short interest behind Apple Inc.

Left went on to add, “The numbers coming out of the company are too compelling”.

Following a tweet by Richard Pearson’s Mox Reports that Tesla’s “numbers will be blowout”, Tesla’s shares got a boost during mid-day trading.

“While the media has been focused on Elon Musk’s eccentric, outlandish and at times offensive behavior, it has failed to notice the legitimate disruption of the auto industry that is currently being dominated by Tesla,” said Citron.


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