Tesla short film sellers lost $ 38 billion in 2020 as stocks increased

Photographer: David Paul Morris / Bloomberg

The short-term sellers of Tesla Inc. they lost billions more to the electric vehicle maker than any other company in 2020, as the bears were severely burned by the increase in stocks to new highs.

With shares of 730%, Tesla bears have reported losses of more than $ 38 billion this year, according to data from S3 Partners. In comparison, the next biggest loss for short sellers was at Apple Inc., with just under $ 7 billion, according to S3 data.

This “is not only the biggest loss in the market for any stock this year, but it’s the biggest annual loss I’ve ever seen,” said Ihor Dusaniwsky, CEO of Partners S3.

Tesla did not respond to any requests for comment.

For now, the electric car maker and its investors, small and large, have the dominance against a group of short-term sellers who have come to be known as TSLAQ – Q, the character who exchanges a stock password after a company filed for bankruptcy. .

These short sellers include well-known names like Jim Chanos, president and founder of hedge fund Kynikos Associates. Chanos recently downsized the size of his trade and told Bloomberg TV in early December that it has been “painful.”

Read more: Chanos downplays Tesla short “painful” and says Musk’s job is “well done”

Many of Tesla’s short sellers have closed their positions throughout 2020, with short interest rates falling to 6% of the float from close to 20% a year ago, according to S3 data.

“The small opening has been all year round. It’s been a straight line sloping down, ”Dusaniwsky said.“ The most important thing about Tesla, unlike any other stock, is that the vast majority of retail shareholders will never be sellers. They love stocks, they love cars, they love Elon Musk and they are firm shareholders. ”

Tesla shares soared this year as they made five consecutive quarters of profits and amid growing sentiment on Wall Street that the shift to electric vehicles is accelerating. The company was added to the S&P 500 Index on December 21 and several smaller shares of electric vehicles have been pooled.

The next potential catalyst comes in early January, when Tesla reports fourth-quarter vehicle production and delivery figures. Tesla expects to deliver half a million cars by 2020, a huge milestone for a company that initially struggled to mass-produce its Model 3 and is now building additional factories in Berlin and Austin, Texas.

“Tesla checks a lot of boxes for investors in terms of people wanting growth, disruption and electrification,” said Dan Levy, an analyst at Credit Suisse. “Operatively they had a good year, but there are also broader trends in the market. It is clear that there was more interest in shortening stocks before 2020, and then in 2020 it eliminated many shorts ”.

In July, CEO Musk tweaked the noses of Tesla critics with the sale of limited-edition red satin shorts with the company logo, or whatever he called “short shorts.” Fans have posted photos carrying them as Tesla shares rose and Musk he tweeted an image of a couple as a Christmas greeting.

Musk, which with an 18% stake is Tesla’s largest shareholder, has seen its own balloon of wealth this year. He is now the second richest person on the planet after Jeff Bezos of Amazon.com Inc.