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Despite some slight momentum over the past week, Tesla (TSLA) stock remains in the red for the past five days. Even after shares rose today, the struggling company isn’t giving investors more cause for optimism that a turnaround is coming.
That’s partially because CEO Elon Musk still seems focused on everything except his companies. His work with the so-called Department of Government Efficiency is clearly occupying most of his time while Tesla sales decline across Europe and volatility continues to push shares down.
Tesla stock’s recent performance has caused even bullish investors to adjust their takes on it, speculating that the company may be in for more trouble unless Musk takes action into the near future.
Recent data shows that institutional investors aren’t optimistic about Tesla’s growth prospects either. In fact, some seem to be taking the opportunity to protect themselves from future losses and volatility.
Investor sentiment toward Tesla stock is trending downward
Even after the late-week momentum it picked up recently, TSLA has still fallen 30% over the past month, hitting its lowest point in years recently. Given how much it surged in the final months of 2024, this performance illustrates how quickly market tides can shift.
Whenever a prominent stock starts to fall, short sellers take notice and this time seems to be no exception. New data from market research firm Hazletree shows that shortside crowdedness has risen recently. This indicates a few different things, most of which center around a growing lack of investor confidence in Tesla and by default, Musk.
Related: Popular Elon Musk rival accused of fraud in damning short report
The most important takeaway from Hazletree’s data, “aggregated and anonymized from approximately 700 asset manager funds,” is that although shares did rise slightly over the past few days, Tesla’s short crowdedness score has risen as well. This suggests that institutional investors are taking steps to profit from downward pressure on the struggling stock.
Tim Smith, the firm’s managing director of data insights provided context on the outlook for Tesla and how investors should evaluate these findings.
“The data paints a picture of an EV stock that’s suffering a metaphorical ‘short-circuit’ — but perhaps the fuse is being replaced,” he speculates. “With ongoing political turmoil and Elon Musk’s personal brand turbulence (e.g., DOGE backlash, protests, arson incidents), Tesla seems stuck between a volatile retail market and a potentially ambivalent institutional positioning.”