Tesla [TSLA] Short Sellers Have Lost $1 Billion In 2018

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Originally published on EVANNEX.

Tesla [NASDAQ: TSLA] has been confounding Wall Street’s naysayers for years, and 2018 has not departed from that trend. According to Schaeffer’s Investment Research, “Tesla stock was trading near its highest levels since late October earlier — topping out at $349 — after JPM reported on the company’s private investor meeting at the Detroit Auto Show. The brokerage firm said TSLA’s head of investment relations indicated Model 3 production will reach 1,000 cars per week this month — an increase from fourth-quarter numbers, with the recent bottleneck issues resolved.” [Update: Tesla stock is currently at $]

Tesla’s Model 3 by Kyle Field | CleanTechnica

Speculation? Hard to say. Either way, Elon Musk continues his ongoing battle with Tesla’s short sellers — those on Wall Street who bet against the company. And these short sellers are taking a massive hit this year. Marketwatch reports, “Tesla Inc.’s roaring start to the year has left short sellers about $1 billion in the red.”

This represents quite the comeback as: “Tesla shares overcame steep losses and a rocky late 2017, when the Silicon Valley car maker was beset by doubts about its ability to produce the Model 3 in larger numbers, to rise more than 12% so far this month. That compares with a 4.6% gain for the S&P 500 index.”

A look at Tesla’s other vehicles — (above) the Model X, by Kyle Field | CleanTechnica; and (below) Model S | Tesla

It’s reported that, “Short interest in Tesla stock—money betting on a stock decline—is around $10.88 billion currently, said Matthew Unterman, a director at S3 Partners, a financial analytics company that has access to and tracks real-time short interest data. That would peg Tesla’s short interest at 23.5% of the free float, he said.”

Yet Tesla’s stock performance has punished these short sellers: “S3 Partners calculate that Tesla short sellers have a mark-to-market loss of around $1.1 billion since the start of the year… [and] for 2017, short sellers had a mark-to-market loss on Tesla of $3.57 billion, on an average short position of $9.42 billion, S3 Partners said.”

Back in 2012, Elon Musk once cautioned that “it’s very unwise to be shorting Tesla” (YouTube: Sival Teokal)

According to S3 Partners, “Tesla is the third largest worldwide short.” Nevertheless, Tesla continues to outperform the market: “Tesla shares have gained 46% in the past 12 months, while the S&P has risen 23%.” Is this Déjà vu? Indeed. In 2012, Elon Musk had warned shorts [see above] that a “tsunami of hurt” was coming for those who bet against the company back when Tesla’s Model S was ramping up its production.

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Matt Pressman

Matt is all about Tesla. He’s a TSLA investor, and he loves driving the family's Model 3, Model S, and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he’s served as a contributor/editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes daily about Tesla and you can follow his work on the EVANNEX blog.

Matt Pressman has 332 posts and counting. See all posts by Matt Pressman