Market Overview

Tesla Short Sellers Bank $1.5B On Earnings Miss

Share:
Tesla Short Sellers Bank $1.5B On Earnings Miss

It’s been a brutal year for Tesla, Inc. (NASDAQ: TSLA) investors, with the stock down another 15% this week following a big earnings miss in the second quarter. Tesla carries one of the largest short positions in the market, however, and Tesla short sellers are having a very good week.

Rebound Year For Tesla Shorts

On Thursday, Tesla recorded its worst day of 2019, with shares closing down 13.6% following the big earnings miss. As a result, Tesla short sellers earned $1.55 billion in profits on Thursday, according to S3 Partners analyst Ihor Dusaniwsky. He said Tesla short sellers are now up 35% year to date, banking net profits of more than $3.06 billion.

This year has been a rebound year for Tesla short sellers after they booked mark-to-market losses of -$1.40 billion in 2018, -$3.56 billion in 2017 and -$400 million in 2016, according to Dusaniwsky.

Despite big profits, Tesla short sellers have been aggressively adding to their positions throughout 2019.

Tesla’s short position is up 56.3% this year to 39.9 million shares. Short interest now represents 30.4% of Tesla’s public float. Tesla has even surpassed Apple Inc. (NASDAQ: AAPL) as the most shorted stock in the U.S. market.

Short Squeeze Off The Table

In the past week, S3 reported 2.5 million Tesla short shares have been covered. While Tesla shorts rack up the gains, Dusaniwsky said the chances of a short squeeze in the near term are slim.

“We should expect some short covering in the near term as recent short sellers may choose to close out their positions and realize their profits. But this price move has taken the idea of an impending Tesla short squeeze totally off the table, shorts now have a $3 billion buffer of year-to-date mark-to-market profits to comfort them and help keep them in their positions,” Dusaniwsky said.

Following this week’s sell-off, Tesla shares are now down 33.1% overall in 2019. The stock traded around $223.24 per share at time of publication.

Related Links:

'Concerning Trend': Wall Street Weighs In On Tesla's Q2 Earnings

Stock Wars: GM Vs. Ford Vs. Tesla Vs. Toyota

 

Related Articles (TSLA)

View Comments and Join the Discussion!

Posted-In: Ihor Dusaniwsky S3 PartnersAnalyst Color Short Sellers Short Ideas Top Stories Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com