Tesla: Why Everyone Should Be Rooting For America’s New Car Company
The only successful new American car company in more than half a century, Tesla (TSLA), reported its first quarterly profit yesterday.
It wasn't a big profit.
But the fact that it was any sort of profit blew away investors, who instantly bid the company's stock up 25% to a new high near $70. Helping fuel this gigantic move was presumably collective panic on the part of the many investors who are short Tesla's stock, betting that the electric car company will falter and its stock will tank.
When short-sellers are forced to "cover" their bets on unexpected good news, their panic buying often creates demand that drives stock prices through the roof. And Tesla's stock presumably benefited from that.