BusinessshortTesla

Many Tesla Short Sellers Are Giving Up

(Bloomberg) — Tesla Inc. is inflicting more pain on short sellers, and many of them are giving up.

Most Read from Bloomberg

  • Christmas at Risk as Supply Chain ‘Disaster’ Only Gets Worse

  • Reshaped by Crisis, an ‘Anti-Biennial’ Reimagines Chicago

  • This Is What Europe’s Green Future Looks Like

  • Wall Street Titans Warn of the Next Big Risks for Investors

  • An Unapologetic Old Boys’ Network Is Costing Australia Billions

Shares of Elon Musk’s electric-vehicle maker have jumped 41% since touching their 2021 low in March, sending bears rushing to cover their negative bets. The percentage of stock borrowed by traders, a standard measure of short interest, has slumped to 1.1% of Tesla’s shares available for trading, according to IHS Markit Ltd. as of last Thursday. That’s the lowest since 2010, when the carmaker went public.

While data from IHS’s competitor S3 Partners shows a higher short interest at about 3.2% of the float, it is still the lowest ever for the company. According to S3’s Ihor Dusaniwsky, there has been some short covering in Tesla recently, with shares shorted decreasing by 1.55 million shares or about $1.20 billion, over the last month.

The pain may be about to get worse. Tesla over the weekend reported another record quarter for car deliveries. Wedbush analyst Daniel Ives describes those numbers as “a major feather in the cap for the bulls.”

The peak in pessimism toward Tesla stock came in 2019, when Musk warned that the company needed to cut jobs and boost production to survive. The stock has since soared more than a 1,000% as the shift to electric vehicles picked up and Tesla solidified its first-entrant advantage.

Tesla shares rose as much as 4.1% to $806.97 in New York on Monday. The stock set a record high close of $883.09 in January.

“While there are many competitors in the EV space, Tesla continues to dominate market share as evidenced again this quarter while battling through the chip shortage,” Ives said.

(Updates stock moves in second and sixth paragraphs, adds S3 comments in third.)

Most Read from Bloomberg Businessweek

  • Atlanta’s Wealthiest and Whitest District Wants to Secede

  • ‘Most Americans Today Believe the Stock Market Is Rigged, and They’re Right’

  • The Left-for-Dead Hospital That Got a Second Chance for $1

©2021 Bloomberg L.P.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close