Tesla short sellers down more than $1B after earnings day pop - S3 Partners
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Tesla shorts took a beating after a post-earnings acceleration for shares of the EV manufacturer.
According to Ihor Dusaniwsky, Head of Predictive Analytics at data and predictive analytics firm S3 Partners, said that the worldâs most popular short is causing yet more pain for those betting against it on Thursday. He noted that while short sellers were âactively trimmingâ exposure into the quarter by covering over 2M shares, total short interest remained at just over $18.5B heading into the report.
âThe end of âsupply chain hellâ may turn into a âshort squeeze hellâ for TSLA short sellers as Elon Musk says the firm has the âpotential for a record breaking second half of the yearâ,â Dusaniwsky wrote in a research note.
At the mid-day gain of 5.4%, he indicated TSLA shorts are down just over $1B in mark-to-market losses. Tesla (NASDAQ:TSLA) shares rose 9.63% in afternoon trading on Thursday, presumably adding to that figure and some shorts get squeezed out of their position.
âWe should expect its short covering trend to continue as short sellers get squeezed out of their positions due to these large and sudden losses,â Dusaniwsky concluded. âThese buy-to-covers and the potential for hedge funds to bulk up their positions in a high beta name with a positive price trend may help reverse TSLAâs year price weakness.â
Nonetheless, S3 data indicates short sellers remain profitable year to date given the stockâs significant slide in the second quarter. Year to date, Tesla (TSLA) shorts are up over $6.3 billion in mark-to-market profits.
Read more on Wall Streetâs reaction to the earnings results.