• 102 days Could Crypto Overtake Traditional Investment?
  • 106 days Americans Still Quitting Jobs At Record Pace
  • 108 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 111 days Is The Dollar Too Strong?
  • 112 days Big Tech Disappoints Investors on Earnings Calls
  • 113 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 114 days China Is Quietly Trying To Distance Itself From Russia
  • 115 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 119 days Crypto Investors Won Big In 2021
  • 119 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 120 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 122 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 122 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 126 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 126 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 127 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 129 days Are NFTs About To Take Over Gaming?
  • 129 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 132 days What’s Causing Inflation In The United States?
  • 133 days Intel Joins Russian Exodus as Chip Shortage Digs In
The Auto Industry Just Can’t Catch A Break

The Auto Industry Just Can’t Catch A Break

The already-struggling auto industry is…

Mega Deals Now Paint the Semiconductor Landscape

Mega Deals Now Paint the Semiconductor Landscape

Global semiconductor industry sales reached…

  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