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- Tesla short sellers saw $ 38 billion in mark-to-market losses throughout 2020, Bloomberg reported on Thursday, citing data from S3 Partners.
- The stake sold in the company’s shares plunged to less than 6% of Tesla’s float of almost 20% at the beginning of last year.
- The losses exceed the total of $ 2.9 billion seen in 2019 and come behind Tesla’s 740% increase over the past 12 months.
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Investors who bet against Tesla lost billions last year, with the automaker’s shares jumping above almost all estimates.
Short sellers saw $ 38 billion in mark-to-market losses throughout 2020, Bloomberg reported on Thursday, citing data from S3 Partners. The interest sold on the shares fell to less than 6% of Tesla’s float, from almost 20%, as the company’s recovery prompted investors to close their bearish positions.
Tesla bears lost more than any other group of short sellers in 2020. Those who bet against Apple saw the second largest deficit of almost $ 7 billion, according to Bloomberg.
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Heavy losses increased sharply compared to the previous year’s total. Bearish investors lost $ 2.9 billion in 2019, with Tesla jumping nearly 70% from its June low to the end of December.
Short selling a stock involves selling the borrowed shares and buying them at a lower price. Short-term investors profit from falling prices.
Tesla’s shares rose 743% in 2020, driven by stable profitability, new optimistic outlook by analysts and over-demand by retail investors. The rise raised CEO Elon Musk’s net worth to $ 158 billion in December and established him as the second-richest person in the world – behind only Amazon CEO Jeff Bezos.
The automaker divided its shares on a five-by-one basis in August, after Tesla’s share price rose to more than $ 2,000. Although the move did not affect the company’s fundamentals, some analysts found the move useful to pique retail investors’ interest.
The stock most recently charged higher after being included in the S&P 500 index. Tesla’s news on S&P increased stocks in mid-November. Soon afterwards, Goldman Sachs analysts noted that institutional investors tracking the index may propel Tesla’s next leg up as they seek to match the benchmark’s weight.
Musk has repeatedly faced short sellers on social media. The last mockery of the group’s chief executive came in July, when he sold red shorts with the company’s logo. The “short shorts” – marketed as a sardonic rebuke to the company’s short sellers – proved so popular on launch day that Tesla’s merchandise site crashed.
Tesla closed at $ 705.67 a share on Thursday. The company has 20 “buy” ratings, 44 “hold” ratings and 19 analyst “sell” ratings.
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