Shares of Tesla (TSLA) were back in the red after flirting with gains earlier in the afternoon. Part of the issue may be remarks made by Elon Musk after hours yesterday.
StreetInsider.com also has an interesting take on the stock today (subscription required):
With Tesla shares looking like they have a weight on them at around the $170 level, investors may look no further than the May 2013 convertible notes offering. Based on the terms of the convertible notes, if the share price holds up then after September 30 the notes may be convertible into approximately 5.3 million shares.
To counteract dilution from the convertible notes, Tesla entered info a convertible note hedge transactions whereby we have the option to purchase up to 5.3 million shares of our common stock at a price of approximately $124.52 per share. The cost of this transaction was offset by an agreement to sell warrants on approximately 5.3 million shares which give holders of the warrants the option to purchase up to approximately 5.3 million shares of our common stock at a price of $184.48 per share.
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Some traders have suggested the strange comments from CEO Elon Musk last night, that it’s “not crazy” to short the stock at this level, is some type of manipulation related to the convertible notes conversion.
Short interest has edged up in recent weeks, from 21.6 million shares, from 20.3 million as of mid-August.
But Tesla have also gotten good news this week, with Bloomberg noting that the company's plan to buy back its Model S cars could boost sales, and Dougherty reiterating its $200 price target on the stock.
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