Despite $38.2B In Losses, Tesla Short Sellers Ramp Up Bearish Bets
This week, Tesla Inc (NASDAQ: TSLA) celebrated a huge 2020 for investors after Tesla was added to the S&P 500 index with a record market cap of over $ 625 billion. Tesla stock hit a new all-time high on Friday as forced institutional purchases began in the closing minutes and Tesla's ailing short sellers were in even more pain.
Tesla short sellers took a little break on Monday after earnings workers pushed the stock down 5.9%. That retreat brought Tesla short sellers in more than $ 1.8 billion in profit on Monday, according to S3 Partners analyst Ihor Dusaniwsky.
On Monday, Dusaniwsky said Tesla was still the world's most heavily shortened stock, with more than $ 34.5 billion short interest. This short rate is three times the short rate of the second most frequently trimmed stock, Apple, Inc. (NASDAQ: AAPL). Apple has only $ 11.4 billion in short-term interest.
Related link: Cannabis short sellers are down 3 million after the Tilray and Aphria merger in 2020
Terrible year for short positions: Even after the profit on Monday, Tesla short sellers suffered another $ 4.3 billion in market value losses in December.
After Monday's pullback, Tesla shares are still up more than 730% year-to-date, and short sellers have taken a hit all year round. According to S3, Tesla short sellers have suffered market value losses of $ 38.2 billion by 2020 on Monday afternoon.
Despite the huge losses, Tesla short sellers added to their positions prior to joining the S&P 500. S3 reported that Tesla's short interest increased $ 1.5 billion in the past 30 days.
“Shorts were active prior to Tesla's S&P inclusion, and we may see more short selling in the new year as short sellers seek short-term pre-inclusion momentum and speculative long buyers to sell their long positions and gain market value in this fiscal year, ”said Dusanivsky.
Gasoline Gas Hiring: Tesla's market cap has increased to almost the size of the entire old auto market, even though Tesla accounts for only a small fraction of global auto sales. It is understandable, therefore, why short sellers are frustrated.
However, short selling stocks that are trapped in a bubble can be extremely dangerous as irrational exuberance can last for years, and it won't reach its ultimate peak until investor enthusiasm has subsided.
Latest reviews for TSLA
See more analyst ratings for TSLA
View the latest analyst reviews
See more from Benzinga
Click here for Benzinga option trades
What Traders Need to Know About the Historic S&P 500, Nasdaq 100 Rebalancing
No, the stock Tesla being replaced in the S&P 500 hasn't fallen 85%
© 2020 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.
In this article
You should check here to buy the best price guaranteed products.
UK puts army on standby as fuel pumps run dry
SALT Agreement Could Bring Two-Year Repeal of Limit
Cardano’s Ada Wants to Solve Some of Crypto’s Biggest Challenges
Aly Raisman wants to bring hope to sexual abuse survivors
Ronda Rousey Gives Birth, Welcomes First Baby With Travis Browne
Jade Bird: Prototype