CEO Elon Musk has often warned people not to bet against Tesla on the stock market. He went so far as to predict a “top level burn of the century,” and it sort of happened last year.
Tesla’s shares have taken a massive run and the people selling the stocks short have lost tens of billions of dollars in total.
Over the years, Tesla has been the target of top short sellers like Jim Chanos, who made his name by bypassing Enron, and David Einhorn, who made his name by bypassing Lehman. Brothers before its collapse in 2008.
They lost millions on their bets against Tesla, but until recently they seemed to be holding out.
Now that seems to have changed, as short-term interest in Tesla shares has slumped to an all-time low.
“The percentage of stocks borrowed by traders, a standard measure of short-term interest, has fallen to 1.1% of Tesla’s shares available for trading, according to IHS Markit Ltd. last Thursday. That’s the lowest since 2010, when the automaker went public.
This means that the amount of money wagered against Tesla, relative to the value of the company, is at an all-time low.
This is a huge change since up to 20% of Tesla’s entire float was shorted at some point last year – despite being the most shorted stock on the market. – but the short percentage has steadily decreased over the past 12 months.
The latest drop comes as Tesla has managed to systematically increase deliveries every quarter this year and just released its delivery figures for the third quarter of 2021 on Saturday – confirming a new delivery record of 241,300 electric vehicles.
It’s an interesting change. The fight between Tesla’s investors and shorts has been a big part of the company’s history, but investors have won most battles.
Now did they win the war?
It looks like it at the moment, but of course the shorts could always come back for another round.
It’s also worth noting that Tesla investors profited from short selling due to the short cutbacks when the stock rose and short commissions with them.
With the number of stocks being short sold right now, TSLA investors can no longer count on a short sale.
FTC: We use automatic affiliate links which generate income. Suite.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.