Tesla CEO Elon Musk unveils the Cybertruck at the TeslaDesign Studio in Hawthorne, Calif. The cracked window glass occurred during a demonstration on the strength of the glass.
Robert Hanashiro | USA TODAY | Reuters
Tesla jumped in premarket trading Tuesday, smashing past the $800 level and set to open at a new record high.
The more than 12% surge comes after Tesla on Monday climbed nearly 20%, its biggest one-day gain in six years. Tesla’s stock roared after Argus Research raised its price target to a new Wall Street high of $808 a share. But even Argus’ price target is below where the stock is set to open on Tuesday.
Tesla shares are up more than 80% this year through Monday’s close, fueled by analysts raising price targets to catch up to the stock and short-covering by investors betting against the shares. Analysts still can’t keep up with the run. The average 12-month price target of analysts is $493, up from $334 in December, according to FactSet. That new target is more than 40% below where the stock is trading in premarket trading Tuesday.
At the same time, short-sellers are scrambling with investors betting against the stock down more than $8 billion since the beginning of the year, according to S3 Partners. Since Tesla’s stock was under $200 a share in June, the firm said short sellers have covered $12.6 billion worth of stock. That’s a factor that is likely fueling Tesla’s current rally: If enough short sellers buy in tandem, it can create higher demand and itself drive the equity price even higher, a phenomenon also known as “a short squeeze.”
– CNBC’s John Melloy contributed to this report.