In Tesla Inc.’s prevailing surge, short sellers have found themselves on the losing side to the tune of approximately $6.08 billion, according to recent data provided by S3 Partners. The electric vehicle giant has seen its stock appreciate by around 35% since May 24, marking an 11-day streak of gains, if Friday’s session maintains this upward trajectory.
Short sellers are investors who borrow and sell securities in anticipation of a future decline in their value, planning to repurchase them at a lower cost, return the shares to the lender, and pocket the difference. However, Tesla’s ongoing rally has left these speculators licking their wounds.
Ihor Dusaniwsky, the head of predictive analytics at S3, noted that Tesla is the most shorted stock globally, with short sales of the company’s shares amounting to a staggering $22.43 billion. Intriguingly, as Tesla’s shares ascend, short sellers have been piling on their bets since April.
“Short sellers were not convinced the long buying price support would continue and a price retracement would be inevitable,” Dusaniwsky elaborated.
Short sellers have wagered on a hefty 15.3 million new Tesla shares in 2023, valued at $3.6 billion. Over the past thirty days, the bearish bets have further ballooned, with an additional 1.3 million shares worth $303 million being sold short. This constitutes a roughly 1.4% uptick even as Tesla’s stock price soared by 39%, according to Dusaniwsky.
Tesla’s shares are currently flying high, up 4.4% at $245.08 on Friday, having earlier reached a peak unseen since the beginning of October.