It's got to be the poster-child of a bubble in Silicon Valley tech.
"Investors are beginning to realize that this storybook stock has problems," reads one recent headline.
While bulls are lured by the flashy story, bears are focused on the numbers. And they don't look good.
Growing losses. Distracting side businesses. Massive competition from industry incumbents. And those might be the "less bad" factors. Accounting gimmicks make the losses look tamer than they really are. Huge infrastructure costs are only getting bigger. And while the firm has approximately $1.4 billion in cash on hand, it got that cushion by selling junk bonds.
"Eventually, shareholders and bond buyers will wise up," concludes one treatment in Barron's.
Oh, no, I'm not talking about Tesla Inc. (TSLA) .
Fact is, at a time when short sellers are working hard to paint Tesla as the next Enron, many of the mainstream criticisms of Tesla today mirror the very same criticisms of Amazon over the last two decades or so.
Like Amazon, bears have been making a valuation case against Tesla since the early days post-IPO. Today, Tesla is the most heavily shorted stock on the U.S. market, with nearly a third of the firm's total float being actively shorted as of this writing.
Amazon similarly had its own moment of being targeted by shorts in a major way following the publication of the Barron's cover story, Amazon.bomb, back in 1999. In the three weeks following the story, short interest in Amazon more than tripled to 60.4 million shares, or nearly 20% of the firm's outstanding shares at the time.
Simply put, betting against Amazon became a crowded trade in late 1999.
Contrast that with Enron, a famous fraud that imploded at the end of 2001.
While Enron was easy enough to spot with the benefit of hindsight, it was a whole lot harder to catch in real-time. Shorting remained nearly non-existent (save for a few now-famous short sellers like Jim Chanos) until the final days. Short interest only started coming into Enron after shares had already fallen 90% -- and then, only around 4% of Enron's outstanding stock was held short.
At that point, the SEC inquiry was already public, CFO Andy Fastow was already ousted, and the company had restated 4 years of earnings to account for massive losses.
Meanwhile, Amazon short proved to be less profitable. In the seven months that followed the Amazon.bomb story, shares of Amazon approximately doubled. Slightly longer term, Amazon did sell off alongside the rest of the tech sector during the dot-com crash, but by the time that happened, the shorts had already taken their losses and short interest was down at normal levels again.
(Longer-term, there's less room for cherry-picking short opportunities; even buying at the ultimate dot-com bubble peak in Amazon in 1999 would have you up more than 1,450% today.)
That's not an anomaly.
Statistically speaking, the type of consensus short bets we're seeing in Tesla are a somewhat rare event.
Over about two decades, only a handful of stocks with a market capitalization of $20 billion or more have simultaneously had at least 20% of their outstanding shares shorted.
Other large-cap stocks that have had similar levels of extreme shorting include Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio holding Alphabet Inc. (GOOG) (GOOGL) (then Google) back in late 2004 - shares rallied 112.5% in the year that followed.
Today Tesla has approximately four times as much shorting activity as Enron did during the worst of its crisis.
The good news (for either bulls or bears) is that we should find out soon which side of this trade is going to get it right.
Tesla CEO Elon Musk has guided for profitability in the second half of the year, a milestone that could remove Tesla's reliance on funding from the capital markets to remain a going concern. Put simply, one group is going to be proven right very shortly.
In the meantime, the shorting data show that Tesla's business (and its detractors) shares a lot more in common with Amazon than it ever did with famously successful shorts like Enron.