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Tesla stock hit a new all-time high on Wednesday—just don’t ask why.

The electric vehicle pioneer is usually in the news because of a product announcement, a Wall Street research report, or because of something the company’s enigmatic CEO Elon Musk said on Twitter. This time, shares appear to be up because Tesla (ticker: TSLA) competitors, such as Mercedes-Benz, are stumbling to bring out competing EV products. If that is indeed the reason, the market is probably overreacting.

Daimler (ticker: DIA.Germany) is delaying deliveries of its first EV for the U.S. market—a sport-utility vehicle called the Mercedes-Benz EQC 400. The vehicle was first delayed back in February. “Now the vehicle is not expected to be delivered to U.S. customers until 2021,” wrote Deutsche Bank analyst Emmanuel Rosner in a Tuesday research report. “Consumer demand in Europe is much higher than in the U.S. in part due to higher European efficiency and pollution regulations, and with its overall battery supply limited, Mercedes decided to focus resources on the market where demand is highest.”

He also points out that high-end EVs such as the Jaguar I-Pace and the Audi e-tron have “severely underperformed expectations” in 2019, selling only 2,418 and 4,623 units, respectively, year to date through November.

Still, competitors’ fumbled launches and lower-than-expected sales shouldn’t be enough to create more than $5 billion in stock market value—that is the aggregate gain in Tesla stock since Monday. Tesla is now the world’s third-largest automaker by market cap, dwarfing both Ford Motor (F) and General Motors (GM).

Especially since not all news about Tesla recently has been positive. Rosner’s point about EV demand being better in Europe is a good one. Tesla reported record deliveries in the third quarter of 2019, but U.S. sales fell 39% year over year.

What’s more, news reports Wednesday said Tesla was considering cutting Model 3 prices in China next year. Market conditions dictate pricing, but Tesla might also lower prices because costs are falling as production ramps up. Tesla didn’t immediately respond to a request for comment.

Don’t forget Tesla stock is also heavily shorted. To sell short, bearish investors sell stock they don’t own, betting on price declines.

The short interest—which is the number of shares borrowed and sold short relative to the total amount of stock available for trading—is about 20%, roughly 10 times higher than the average short interest for stocks in the Dow Jones Industrial Average.

Tesla has been a controversial stock for a long time, with a higher-than-average short interest for many years. And heavily-shorted stocks are typically more volatile than average stocks.

Tesla short interest has been declining steadily since the summer, when shares were near their 2019 nadir. Short-covering is as big a reason the stock is up as the Mercedes news.

Of course, bearish investors cover bearish bets because things are getting better. And better-than-expected third-quarter profits catalyzed the recent Tesla share price rally. The stock is up almost 60% over the past three months, far better than comparable gains of the S&P 500 over the same span. Even more amazing, its gained 122% since its 52-week low set June 3, 2019, when the stock looked like it had been left for dead.

Just add it to the list of Tesla controversies.

Write to Al Root at allen.root@dowjones.com