Tesla shares are trading higher – up 4% mid-day – despite reports indicating the company will suspend Model Y output in Shanghai in the last week of December. However, this report has been discredited by Tesla and is the second report of its kind in the last couple of weeks to be discredited. This week, Reuters and Bloomberg reported that Tesla planned to cut December output of the Model Y at its Shanghai plant by more than 20% from November. Tesla said the statement was false. The 20% production cut report had the effect of damaging Tesla shareholder value by causing a more than 10% drop in stock value between the high of $191.27 per share on Monday and a low of $169.80 on Thursday.

The retail crowd and other reputable financial sources believe the news reports were a catalyst to help short sellers profit in the long-term by creating a discounted value situation. As Tesla continues to achieve high growth targets (+30% YoY production increases), debt is reduced, and profitability increases, it is a wonder why the stock has lost 40% in value over the course of the year. Discounted future earnings and the ability to buy low and sell high by the market makers and hedge funds is the common theory.