The Richmond Club

Why Is Tesla Stock So High? Due to "Short" Shorts?

Tesla is currently offering a branded pair of red short shorts on the company website — Could this be a shot at the investors that "shorted" the Tesla Stock? Maybe these new shorts is the answer to Why Is Tesla Stock So High?

Tesla has recently become the world’s most valuable car company recently, soaring past Toyota with a $208 billion market capitalization. Tesla’s stock continued to skyrocket after they announced that it had beaten delivery estimates, growing Tesla’s market valuation to $224 plus billion.

Tesla’s Elon Musk, owns just over 13% of Tesla’s stock, and is the largest beneficiary of this growth in stock. Musk’s net worth has grown by $5 billion at market close on June 26, bringing his growing fortune to somewhere close to $46.3 billion at the close of trading. Musk has not traded any shares of the company since 2010.

Shot at the Tesla Shortsellers? Courtesy of Tesla.com

The eccentric 49-year-old has become the 16th-richest person in the United States. Musk is currently the 22nd-wealthiest person in the world, jumping nine spots and adding $21.7 billion in net worth from the period that “Forbes” finalized their Richest people in the world list in March.

The eccentric Musk joined the list of the wealthiest Americans in 2012, showing up on Forbes list at the 190th spot having a net worth of just over $2 billion. He’s has since grown 19 times that amount — an astounding rise in only eight years. His enthusiastic “followers” keep driving up the price of the stock, despite Tesla lagging in scale behind other automaker

Lithium is a key component of not just Tesla cars but all electric cars which is why we have been on the hunt for, what we consider to be undervalued high-growth lithium companies to add to the Richmond Club index which has grown by an average of 18.26% per year since its Inception 15 years ago.

That’s why we recently added Wealth Minerals Ltd. to our index. Wealth Minerals is a Canadian company with an extensive land portfolio exploring for lithium in Chile.

TSXV:WML

In the first quarter of 2020, Tesla produced 103,000 vehicles, only 4% of the vehicles produced by Toyota in the same period.

Analyst’s have been warning clients against valuing Tesla in the same lane as tech giants like Google or Apple, referring to the differing business model that Tesla employs. Other analysts are more optimistic, sending praise Teslas way for flying through the pandemic. We believe that the delivery of 90,000 plus vehicles during the pandemic is quite amazing.

In the recent months, as Musk’s net worth has been rising in parallel with Tesla’s stock, Musk has tweeted that he is moving to a “minimalist” lifestyle by selling his $62.9 million home in Bel-Air. Musk has also been reported to be selling 4 additional high end properties in Bel-Air.

But Wait! There's More...

As Elon Musk loves to push the envelope whether its creating electric cars or sending rockets into space or selling flamethrowers. It was not entirely surprising that Mr. Musk took to Twitter on Monday to reveal his newest creative venture. Musk is launching short shorts, Yes, short shorts!


Hey, why not? Musk’s Tesla has become the most valuable car manufacture in the world. Tesla stock is up a mere 200% in 2020. Elon Musk just may have proved the companies haters wrong in the end. But it would not be like Mr. Musk to celebrate quietly with a very expensive bottle of champagne, no not Elon!

Instead, Tesla is currently offering a branded pair of red short shorts on the company website — Could this be a shot at the investors that “shorted” the Tesla Stock? Unfortunately, if you are looking to buy this new Elon creation? They are already sold out!

In typical Musk fashion, another off-color quote apparently aimed at his detractors and the Securities and Exchange Commission: “SEC, three letter acronym, middle word is Elon’s.” Awesome, is all I can say!

Just last year, Tesla was short on cash. In May of 2019, the automaker was selling debt and additional shares of stock to raise $2.7 billion to refill the coffers. A weakoned share price forced Tesla to pay off a $920 million bond in cash instead of stock.

The Company has only posted quarterly profits a handful of times in it’s ten year history.
But in January, Tesla posted its first annual profit — and the upword momentum has continued on from there.

Despite the stay-at-home orders and shutdowns caused by the coronavirus — the company last week posted strong car delivery stats for the second quarter of 2020.


Tesla delivered 90,650 cars to eagerly awaiting customers during the 2nd quarter, down 5% from Q2 last year, but much less than what was reported by other auto manufactures running at approximately 30% less.


The Tesla cars are promoted on the Tesla shorts. The backend of the shorts feature each of the Tesla model numbers, “S3XY,” emblazoned in gold lettering.


Is this just another case of the “Genius” known as Elon to have customers paying him to market his electric cars. Incredible! Don’t you think?

small cap investing
Richmond Club Index VS The S&P over the last 15 years. Courtesy of The Richmond Club

We would encourage you to please see our Richmond Club Advisor Group that receives investment advice, stock picks, newsletter, and stock offerings throughout the year. 

Please feel free to contact us at dave@richmondclub.com if you have any questions about the membership.

18.26% Average Annual Growth Since Inception 15 Years Ago!

Richmond Club Index

1,433%

S&P 500

158%

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