Tesla inc (NASDAQ:TSLA) shares, which vaulted higher after noted short-seller Andrew Left took an abrupt U-turn and went long on the shares, suddenly lost momentum Wednesday after the electric-vehicle maker quietly pushed up its earnings release by a week.
A prime contributor to the stock's surge since Tuesday was the announcement by Left's Citron Research, which used to be a notable short in the company, reversing its position and going long Tesla.
"Tesla is up over 13% ... on two surprise announcements. Andrew Left of Citron Research, who was a boisterous critic of stock, multi-year short seller and party to a post-Elon Musk 'funding secured' tweet lawsuit is now touting that 'Tesla is destroying the competition,'" said a report by Ihor Dusaniwsky, the managing director of Predictive Analytics in S3 Partners.
READ: Short-seller Andrew Left stands by his newly revealed Tesla long: exclusive interview
Dusaniwsky said the other announcement is Tesla has decided to hold a conference call today at 3:30 pm PDT/6:30 pm EDT to release its third-quarter results — a week earlier than its scheduled first week of November timetable. A quick check of the company's website confirms the scheduling of the earnings release.
"Both developments were viewed as positive and a welcome turnabout for long shareholders who have been engulfed in negative news regarding SEC charges and C-Suite uncertainty. As a result, Tesla’s stock price has been rallying since the opening bell," Dusaniwsky concluded.
As for Left's Citron Research, the early release of results may hit shorts on the stock.
$TSLA dropping earnings on top of $F tomorrow might be a bad sign for shorts. After reviewing all recent info on $TSLA dominating its categories, Citron is LONG Telsa for this quarter. Full report https://t.co/eZLSbtL0kg
— Citron Research (@CitronResearch) October 23, 2018
Shares of Tesla hit a market session peak of $304.44, up 3.5% near the open, until word of the earnings change sent shares lower. The stock was trading 0.57% lower at $292.46 late on Wednesday.
Initiated at JMP Securities
JMP Securities initiated coverage of the electric-car maker with a rating of Outperform. Analyst Joseph Osha started coverage with a $350 price target. He called Tesla a "rapidly growing company, with a still-shaky balance sheet, and a brilliant but often-volatile leader."
He believes the scale of the electric vehicle market is not at issue, as he believes it can support a unit growth rate of 20% to 30% for the coming decade.
A bigger priority for Tesla will be addressing the price points necessary to maintain the company's position, though Osha contends that competition reacted slowly to Tesla, and is still behind.
Tesla is the world's leading electric-car maker.
Reporting by Rene Pastor, contactable on rene.pastor@proactiveinvestors.com