Fascinating, @apm! I wonder if that's what I've been seeing with Tesla.
As I've watched the stock over the past year, I've seen a pattern emerge. There are periods of relative quiet during which the stock climbs slowly and steadily toward the mid-$300s. Then there will be a negative news story (production problems, labor issues, Elon said something dumb, etc.) and the stock will panic-dive down to the $270-$290 range, at which point it will begin another slow and steady climb.
What's interesting to me is that it doesn't really seem to matter much how accurate the story is or even necessarily how important it is. It could be as trivial as a Tesla catching fire after an accident. All that seems to matter is that if it's at least a little bit negative, national press and social media will latch onto it and run with it and the stock will take a dive.
I think two things are happening here:
1. Tesla and Elon are clickbait brands. If you write a news story or social media post about either, it will get clicks, because people are super interested. And negativity is easier to write and drives more clicks than positivity.
2. Tesla is a massively shorted stock. Billions of dollars are riding on Tesla failing, so there's a huge incentive for certain investors and institutions to push negative stories. Combined with the clickbait factor already inherent in Tesla's brand, this leads to national coverage of relatively minor or boring things that we'd never hear about if the company in question were GM or BMW.
The thing is, I think it's not just short sellers who are contributing to this problem. It's also a great arrangement for pump-and-dumpers because the pattern is so consistent and so easy to influence. If you can afford to pump a few million bucks into TSLA at $290 and then dump at $315 and repeat, you've basically got a money machine. But if you dump at $315 and TSLA keeps rising you're missing out, so you're gonna do whatever you can to reboot the cycle and get the stock back down under $300 so you can pump it again.
At some point the cycle will stop — either because Tesla finally fails or because it finally manages to achieve enough success that it's able to override the panic response — but until then, I think TSLA is a weird and illogical stock and watching it gives me heartburn.