Did Tesla just Lose a Crown to Apple?
Both $Apple(AAPL)$ and $Tesla Motors(TSLA)$ are mega-capitalization companies, but has Tesla just lost a crown jewel to Apple?
Recent short-selling data revealed that the value of Apple stock borrowed and sold short exceeded that of Tesla for the first time.
Tesla has held the top spot in the short interest league table since April 2020. Elon Musk should not be upset to see this top rank relinquished though. He had famously sent pairs of short shorts to comfort the greatest short-sellers who had betted against his company only to see its stock price breaking new heights.
Bullish Apple investors probably don’t have much to fear. While the absolute value of stock sold short may be huge, it constitutes only about 0.7% of Apple shares available for trading, given its market capitalization of about $2.5 trillion, that is almost 2.6 times more than that of Tesla’s $948 billion market cap. About 2.2% of Tesla stock is sold short. Still, Tesla’s short interest ratio looks nothing like it once did. Back in April 2020, roughly 11% of the stock available for trading was sold short. Back then, a lot of bears didn’t believe that Tesla could grow its business profitably. But Tesla has achieved that. Falling short interest could be a sign that the market no longer thinks that Tesla is as overvalued as it was previously when it was struggling in its earlier days to demonstrate profitability.
With the fading short interest on Tesla, is it time to turn bullish on the EV maker?
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Great article!