This afternoon, the share price of Tesla increased by nearly seven percent, after one of the long-term critics of the electric vehicle manufacturer reversed its short position on the company.
Citron Research shifted its tune on Tesla from “short” to “long.” In a research note, it wrote that the Model 3 sedan of the company is “a proven hit, and many of the [Tesla] warning signs have not proven to be significant.”
The news was released only a month after Citron filed a case against Tesla and Elon Musk, its chief executive. Citron argued that Musk had deliberately tried to “burn” short-sellers when he prompted the mass trading of the stock after he tweeted his plans to take Tesla private at $420 per share.
Citron has not withdrawn the said lawsuit against both parties.
Both Musk and Tesla reached a settlement deal with the Securities and Exchange Commission (SEC) of the United States of America last month, which saw Musk step down from his role as the Tesla chairman for three years and both of the parties agree to pay a fine amounting to $20 million (£15.4m) each.
The SEC had indicted Musk with securities fraud. It claimed that he had sent the tweet without having secured funding or having agreed on a transaction with the regulators or his board. Also, he had settled on the number of $420 per share by adding a 20 percent premium and then rounding up because of the number’s significance in marijuana culture.
Citron continued: “While the media has been focused on Elon Musk’s eccentric, outlandish and at times offensive behaviour, it has failed to notice the legitimate disruption of the auto industry that is currently being dominated by Tesla.”
Tesla is scheduled to report its third quarter results on Wednesday night. The said report is hotly anticipated after the firm released its vehicle production numbers earlier in October.
The electric vehiclemaker said that it produced more than 80,000 cars during the third quarter, while the deliveries to customers reached a record 83,500 to exceed the previous analyst estimates of 80,000.
Musk has openly established a goal of achieving profitability at the company by the end of this year, despite publishing a widened loss for the last quarter.