Tesla Short Sellers Have Lost $3.7 Billion In 2017 So Far

To date, traders short selling Tesla stock in 2017 have lost around $3.7 billion. What that means is Tesla short sellers have lost more money on their own so far this year than short sellers of Apple, Amazon, and Netflix stock have collectively.

That certainly makes for an interesting situation to analyze. Has Tesla become so politicized that many stock traders are unable to step back from the situation and look at it at least somewhat objectively? Why the conviction that Tesla is always just on the verge of completely crashing and burning? Are people’s preconceptions and projections about the company (and electric vehicles in general) that important to protect that people are willing to flush massive amounts of cash down the toilet?

Reuters provides more: “Those conflicting views of the electric-car maker have deepened in recent weeks, with short sellers increasing their exposure even as paper losses mount and Tesla’s stock hits new highs.

“Short bets against Tesla have grown to $10.1 billion from $8.7 billion at the start of April, and during that time short sellers have racked up paper losses of $1.4 billion, according to S3 Partners, a financial analytics firm. Tesla’s stock has climbed 15 percent in the same period and has surged 50 percent so far in 2017.”

The head of research at S3 Partners, Ihor Dusaniwsky, commented: “You have your momentum guys riding this stock up and making a fantastic return, and the fundamental guys holding onto their shorts and building them and saying ‘this can’t continue’ and waiting for the shoe to drop.

“It’s one of your classic yin and yangs on Wall Street.”

To give a comparison here, to better explain the extent of losses that Tesla short sellers have been experiencing this year: Apple stock short sellers have “only” lost $1.5 billion, Amazon.com stock short sellers have lost $1.1 billion, and Netflix short sellers have lost $776 million. Short seller losses for other stocks have been notably lower than any of those this year so far.