• 6 hours El Salvador’s Surprise Bitcoin Move
  • 3 days Markets Unfazed As Inflation Hits 13-Year High
  • 4 days How the Token Economy is Disrupting Financial Markets
  • 6 days FBI Investigating 100 Types Of Ransomware Attacks
  • 8 days Fed Ends Corporate Credit Emergency Lending Program
  • 10 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 11 days The Real Reason Your 401k Has Been Lagging
  • 12 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 14 days The Market Is Ripe For Another GameStop Saga
  • 17 days Senate Grills Big Banks Over Pandemic Opportunism
  • 18 days Cannabis Has A Major Cash Problem
  • 19 days Ransomware Netted Criminals $350M In 2020 Alone
  • 20 days Russia Is Taking On Google
  • 21 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 22 days Ohio Residents Brave Vaccine for Chance To Win $1M
  • 24 days Inflation Is Coming. Are You Prepared?
  • 25 days Travel Might Get Another Supersonic Disruption
  • 26 days The World Is Running Out Of 6 Key Resources
  • 27 days $15/Hour Minimum Wage Might Happen Naturally
  • 29 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
The Biggest Tech IPO Since Uber … For Farmers

The Biggest Tech IPO Since Uber … For Farmers

If you’re looking for the…

Small-Cap Energy Sectors With Big Upside

Small-Cap Energy Sectors With Big Upside

Over the past few decades,…

Cannabis Has A Major Cash Problem

Cannabis Has A Major Cash Problem

Cannabis is legal in most…

Irina Slav

Irina Slav

Oilprice.com

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

Contact Author

  1. Home
  2. Investing
  3. Stocks

Tesla Short Sellers Just Took A $1.7 Billion Hit

Sad

Tesla is the most shorted stock among U.S. companies, and CEO Elon Musk is notoriously caustic in his Twitter comments about “Shortville.” This week, after the release of Tesla’s second-quarter results, the residents of Shortville were in for an unpleasant surprise as their paper losses hit US$1.7 billion on an unexpected surge in the company’s stock price.

Despite posting yet another loss for the quarter, Tesla also reported an improvement in revenues and cash flow, as well as the fact that the Model 3 has started to make money during the quarter. Apparently, this was enough for investors to flock back into the company to the chagrin of short sellers.

Tesla expects to turn cash-positive this quarter as it maintains a production rate of 5,000 Model 3s weekly. What’s more, Musk told investors that the company will actually report profits for both the third and the fourth quarter of 2018 and reiterated that there was no need to raise more funds, again contrary to analyst forecasts that Tesla needs an urgent equity injection. 

Earlier this year, despite growing investor unease about Tesla’s failure to ramp up its flagship Model 3’s production rate, the supply of stock available for shorting began dwindling. Now, says financial analytics provider S3, Tesla short sellers have swung into the red. Related: Mexico’s Fintech Industry Is Booming

Before the release of the company’s better than expected Q2 figures, the year-to-date aggregate performance of Tesla short sellers was a positive US$276 million amid the Model 3 uncertainty and several accidents involving Tesla cars. After the release of the results, short sellers swung into a US$1.4-billion loss for the 12-month period.

Tesla has become the fourth worst-performing shorted stock, according to S3 data, as cited by Reuters. Since the start of 2016, Tesla short sellers have lost US$4.7 billion on their bets.

By Irina Slav for Safehaven.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment