Traders lost $7.6 billion betting against Tesla over the past month as stock surged
Elon Musk.
Andrew Kelly/Reuters
Tesla has crushed short sellers over the past month as the stock soared 70%, according to S3 Partners.
Hedge funds betting against Tesla lost $7.6 billion over the past 30 days, making it the least profitable short.
Tesla stock has been on a tear so far this year after Musk cut prices and reiterated the company’s growth targets.
Investors betting against Tesla stock have taken a beating so far in 2023 as the stock has soared as much as 110% from its January 6 low.
The losses for short-sellers betting against Elon Musk’s electric vehicle company have ballooned to $7.6 billion over the past month, making it the least profitable short position for hedge funds, according to data from S3 Partners.
The swift one-month surge in Tesla stock has wiped out about half of the gains short-sellers made last year betting against the company. At the end of December, short-sellers had made a $15 billion profit in 2022, making Tesla the most profitable short of the year.
Shares of Tesla have been on a rollercoaster following vehicle price cuts and a weaker-than-expected fourth-quarter delivery number. But on the company’s most recent earnings call, Musk reaffirmed the company’s long-term growth target of 50%.
Tesla stock has also been rising in anticipation of the company’s upcoming investor analyst day, in which Musk will reveal the company’s “Master Plan 3” that should break down the company’s priorities over the next few years.
On the opposite side of the bearish Tesla trade among hedge funds is retail investors, according to recent data from Vanda Research.
“Tesla continues to draw unprecedented retail flows… we believe that retail traders are currently chasing momentum in the stock aiming to recoup 2022 losses,” Vanda wrote in a note last week.
Whether Tesla can continue to maintain its bullish momentum throughout the rest of 2023 remains to be seen, and the stock is already down 10% from its high made on Thursday. What’s clear is that Tesla is likely to remain volatile in both directions as the company is a battleground stock between bulls and bears.
