Tesla short sellers are feeling the burn after its earnings report
Add Axios as your preferred source to
see more of our stories on Google.
Tesla's stock price rallied nearly 18% on Thursday after a stronger-than-expected earnings report, putting a big dent in the profits of short sellers.
Why it matters: Many short sellers pulled out of the trade after the stock fell to $178.97 a share in June, counting $5.16 billion in mark-to-market profits because of the stock's decline, according to data from S3 Partners. But those who continued to short Tesla have paid dearly, and are now in the red, year-to-date.
What happened: Tesla's stock has been a tale of two halves. In the first half of the year, short-sellers had nearly recouped the entirety of their losses from the 2016-2018 period when Tesla was one of the market's hottest companies.
- But since June 3, shares have rallied by more than 60%, as CEO Elon Musk has managed to produce solid numbers and beef up production in China.
- Short sellers lost close to $1.5 billion on Thursday alone, wiping out almost 70% of their year-to-date profits, S3's managing director of predictive analytics Ihor Dusaniwsky said in a note.
Where it stands: Thursday wasn't quite the "short burn of the century" Musk threatened on Twitter was "comin soon" in May 2018, but it was pretty bad.
