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Expand chart
Data: S3 partners; Chart: Lazaro Gamio/Axios

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.

Go deeper

Updated 3 hours ago - World

Biden reviews U.S. arms deals with Saudi Arabia and UAE

Trump struck several large arms deals with Mohammed bin Salman (L) and Saudi Arabia. Photo: Kevin Dietsch-Pool/Getty Images

The Biden administration has put on hold two big arms deals with Saudi Arabia and the United Arab Emirates which were approved in the final weeks of the Trump administration, a State Department official told Axios.

Why it matters: The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review. That signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.

Trump supporter found with pipe bombs accused of plot to attack Democrats

Five improvised explosive devices that the FBI says "were fully operational and could cause great bodily harm or injury if handled improperly." Photo: FBI/Justice Department

The FBI believes California Gov. Gavin Newsom (D) and the Bay Area headquarters of Twitter and Facebook were targets of a man facing federal explosives charges, according to a criminal complaint.

Driving the news: Prosecutors charged Ian Benjamin Rogers after finding weapons including five pipe bombs, 49 guns and thousands of rounds of ammunition following a Jan. 15 search of his Napa County home and auto repair business. His alleged goal was to ensure former President Trump remained in office.

7 hours ago - Health

Fauci: COVID vaccine rollout needs to prioritize people of color

Anthony Fauci. Photo: Alex Wong via Getty Images

Infectious disease expert Anthony Fauci highlighted the need to address racial disparities in the COVID-19 vaccination process, per an interview with The New England Journal of Medicine on Wednesday.

What he’s saying: "I think that's the one thing we really got to be careful of. We don't want in the beginning ... most of the people who are getting it are otherwise, well, middle-class white people."