Tesla short sellers lost $ 40 billion in 2020. Elon Musk earned more than triple

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Its net worth soared as one of its SpaceX rockets, rising by more than $ 100 billion. And his strongest critics, also known as investors who caused a short circuit Tesla (TSLA) the shares assuming the stock price would go down, he lost a record $ 40.1 billion betting against it, according to S3 Partners analysis.

Those critics, with whom Musk has had a very hard and very public war of words over the years, tried to get a good return if Tesla shares fell in value, but risked heavy losses if the shares continued to gain.

And, boy, did he win, up 743% over the course of the year.

The $ 40.1 billion loss by investors who did not own Tesla shares was unlike the losses of short investors from any other company (last year or never), according to Ihor Dusaniwsky, CEO of S3 and expert in the matter.

In fact, the losses borne by Tesla’s shorts were more than the short losses of the next nine companies, combined. Losses at number 2 apple (AAPL) in 2020 it reached $ 6.7 billion, which is a little more than Tesla’s shorts lost in December alone. Amazon (AMZN) it cost the shorts $ 5.8 billion, according to S3.
Tesla has long been a favorite work of short investors, who controlled about 19% of the shares when it began in 2020. For all those who believe the company is a leader in clean and paradigm-shifting energy , with unlimited potential, other investors maintain that it is an overexpressed niche that will soon be overwhelmed by larger, established carmakers.

Many of the shorts were forced to admit defeat last year. About two-thirds of the short positions were held during 2020, a factor that helped boost Tesla shares as short investors were forced to buy shares at a higher price for get out of their positions.

“It was a gentle tail wind in Tesla’s year-round price movement,” Dusaniwsky said.

But the year ended with short investors holding about 5.5% of Tesla shares, which equates to a $ 31 billion bet against the company’s future prospects. In comparison, there are $ 13.3 billion and $ 10.2 billion currently bet against Apple and Amazon, respectively, with shorts controlling less than 1% of each of those companies ’shares.

Musk’s very lucrative year

Musk has regularly struggled with short sellers, throwing them on Twitter and in public comments. But beyond any joy he feels for his losses last year, his collective pain is unmatched by his own personal gains.

Musk’s $ 170 million stake increased its value by $ 106 billion in 2020, and that’s just part of the gains it made from Tesla’s performance. It came in the year with options to buy another 22.9 million shares, when adjusted for the company’s five-by-one share division. These options increased in value by $ 14.2 billion.

Tesla hit the target of half a million vehicles by 2020
During 2020, Musk also qualified for options to buy an additional 33.8 million shares, part of its exclusive options compensation package that it collects when the company achieves certain market values ​​and operating targets. It qualified for four different option tranches in 2020, which ended the year worth $ 21.5 billion after taking into account the exercise price.

And it is about to qualify for two tranches of options to buy an additional 16.9 million shares earlier this year, given the company’s recent financial and market performance. These additional options would be worth $ 10.7 billion based on the year-end stock price.

All in all, Musk should soon control enough options to buy another 73.5 million shares of Tesla at an average price of about $ 50 per share. It currently trades above $ 700.

Musk has yet to exercise any of the options he has now, which is not unusual. Executives granted with stock options rarely exercise them until they are ready to sell the shares or when the options are about to expire.

All of this has left Musk the second richest man in the world, with a net worth that Forbes estimates at $ 162 million, just behind Amazon CEO Jeff Bezos, with a $ 187 billion net. Bezos ’current stakes in Amazon increased in value to“ only ”$ 75 billion over the course of 2020.

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