Tesla Short-Sellers Get Hammered

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Here’s another electric story – this one about Tesla-doubters experiencing a jolt of economic reality.

According to S3 Partners, short-sellers of Tesla’s gravity-allergic stock have lost $35 billion in 2020.

Falling Short

Tesla shares have been in ludicrous mode all year and are now up over 600%. In November, Tesla shares climbed 46% and short-sellers lost $8.5 billion in a single month.

Bruised and battered, many short-sellers have simply given up. The percentage of shares held by short-sellers has fallen around 63%. Still, about 6% of Tesla’s shares are held by short-sellers, well above the 1-2% average for large companies.

A few numbers to put the losses in perspective:

  • Short-seller losses for high-fliers Amazon and Apple have been roughly $5 billion each this year.
  • The U.S. airline industry (it’s had a bad year) posted combined losses of $24.2 through the first nine months of 2020, the worst in its history.
  • Through the first 11 years of Tesla’s corporate history, it lost $6.7 billion.

Elon’s Warning: In an email to employees obtained by Electrek, he warned that if investors grow concerned with Tesla’s 1% profit margin, the stock will “immediately get crushed like a soufflé under a sledgehammer.”