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EXCLUSIVE: Astec Analytics' Tim Smith Says Tesla Lending Is Up 17 Percent Over Three Days

November 8, 2013 4:34 pm
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Tesla Motors (NASDAQ: TSLA) has been on a run down over the past three trading sessions, after a disappointing earnings announcement and vehicle fire.

SunGard's Astec Analytics tracks real-time securities lending data, which correlates extremely well to short interest data. In an exclusive interview with Benzinga the company's executive vice president, Tim Smith, discussed how the data correlates with Tesla’s recent movement.

Little Change Into the Earnings Report

The four trading sessions into Tesla’s Q3 earnings resulted in shares jumping $21.14, or 13.58 percent. Many traders speculated this run up in price was largely due to the covering of short positions.

Smith’s denied this idea. “It was really fairly steady in terms of cost of borrowing," he said, "and in terms of the amount outstanding.”

Huge Increase Over Past Three Trading Sessions

As mentioned above, not only did Tesla’s earnings disappoint but a third Model S caught fire. Over the past three trading sessions, shares are down 22.13 percent on volume, more than double the three month average.

Smith discussed the huge increase in borrowing for Tesla. Over the past three days, he noted, “there has been increasing interest in Tesla… the amount being borrowed has gone up about 17 percent.”

Related: Could Tesla Finally Be Rolling Over?

Despite rising rates with this surge in demand, the supply is dwindling. “The amount of available securities to borrow is now in the 80th percentile, Smith added. "So, they are beginning to get fewer shares to borrow to put on short positions over the last couple of days.”

With the dropping share price, investors have been piling on demand with “a net million shares going out today [Friday].”

Looking Ahead

Smith concluded by putting the current security lending in perspective. “Let's not get carried away," he said. "The actual high points in terms of the amounts outstanding were March, where there was nearly 30 million shares outstanding and now there is just over half of that.”

Disclamer: Luke Jacobi is short Tesla.

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