Jan 14, 2020

Tesla short sellers wish Elon Musk had funding secured at $420

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Data: Money.net; Chart: Axios Visuals

Tesla has been among the most derided companies in the world, but CEO Elon Musk has been getting revenge against hated short sellers since the electric car company's June swoon.

Why it matters: Many probably wish Musk had taken the company private at $420 a share, as he said he would in an August 2018 tweet in which he claimed to have "funding secured" for the move.

By the numbers: Short sellers who have bet against Tesla's stock price surrendered a total of $2.89 billion in net-of-financing mark-to-market losses in 2019, and have almost matched that total in less than two weeks of trading in 2020, according to data from S3 Partners.

  • Short sellers are down $2.80 billion in mark-to-market losses, including $1.25 billion in losses on Monday’s 9.77% price move.

Where it stands: Short sellers have largely tapped out as the company's stock has rocketed higher, but some are holding tight.

  • Tesla short interest is $12.79 billion with 26.74 million shares shorted, totaling 20% of its float. It remains the second-largest short in the domestic market behind Apple, S3 said.

What happened: Wall Street has gotten very bullish on Tesla in recent months, pushing the stock's price from $400 to over $500 in less than a month and valuing the company at close to $95 billion.

Between the lines: Musk has 1 billion reasons to keep his foot on the gas pedal.

  • He is now within striking distance of the performance-based stock grants he negotiated in his 2018 compensation package that would award him 1% of the company's stock if it reaches a $100 billion valuation, paying him $1 billion.

Go deeper:

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The vindication of Elon Musk

Photo Illustration: Sarah Grillo/Axios. Photo: Jörg Carstensen/picture alliance via Getty Images

Tesla stock has been in Ludicrous Mode for the past few days. Given its bonkers gyrations, it's now easy to see why CEO Elon Musk might feel that he was right all along in wanting to take the company private back in 2018.

Tesla declares 2019 a turning point

Elon Musk. Photo: Xinhua News Agency / Contributor/Getty Images

Tesla earned $105 million in net profit in the fourth quarter, ending the year on a positive note and declaring 2019 a turning point for the volatile electric car company.

Details: Record 2019 deliveries helped drive revenues up 19% over the prior quarter, but profit margins fell because Tesla sold more of the lower-priced Model 3. Shares jumped 7% in after-hours trading on Wednesday to $621.89.

Go deeperArrowJan 29, 2020

Tesla shares plummet after wild few days of trading

Source: FactSet; Chart: Axios Visuals

Shares of Tesla closed down more than 17% on Wednesday, shredding more than $27 billion in market cap value.

Between the lines: Wednesday ended a streak of eye-popping stock gains for Tesla. Per CNBC, it was the second-worst day for the stock ever.