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Tesla Short Sellers Add To $7.1B In September Profits

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Tesla Short Sellers Add To $7.1B In September Profits

The great month of September continued for Tesla Inc (NASDAQ: TSLA) short sellers on Monday after the stock tanked another 15.8% in its first trading day since the stock was passed over for inclusion in the S&P 500 index.

After hitting new all-time highs of $502.49 last week following its first ever stock split, Tesla shares are now down 31.8% since Aug. 31, providing some relief to its battered short sellers.

Prior to Monday morning’s drop, Tesla short sellers had already turned a $7.1 billion profit so far in the month of September, according to S3 Partners analyst Ihor Dusaniwsky.

On Friday, Dusaniwsky said Tesla remains the most heavily shorted stock in the world with more than $24.3 billion in short interest. That amount of short interest is more than twice as much as the second most shorted stock, Apple Inc. (NASDAQ: AAPL). Apple has only $10.4 billion in short interest.

Long Way To Go: Based on S3’s numbers, Tesla short sellers added more than $4 billion to their September profits in early Monday trading.

Despite the Tesla stock crash, shares are still up more than 308% year to date, and short sellers have a long way to go to get back to even on the year. As of the close on Friday, Tesla short sellers have endured $24.5 billion in mark-to-market losses in 2020, according to S3.

Monday marks the eighth day out of the past 11 sessions in which Tesla short sellers have vetted at least $ billion in daily profits or gains due to Tesla’s extreme volatility.

“Volatility will continue in Tesla’s stock price as we approach Battery Day on September 22nd, earnings release date on October 28th, the continued development of new products like its EV pickup and semi-trucks, and the ongoing saga of manufacturing and selling cars in a Covid
World,” Dusaniwsky said Friday.

Benzinga’s Take: Regardless of whether you fall in the Tesla bull or Tesla bear camp, Tesla’s extreme short position is further evidence it doesn’t behave like any other large-cap stock in the market in terms of its valuation and price action. Given the extreme amount of uncertainty associated with Tesla and the dynamics driving the strange price action in its stock, traders should be extremely cautious going both long or short at current levels.

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2 Problems Tesla Creates For The S&P 500

BofA Raises Tesla Price Target By 57%: 'No Need For Internal Funding'

Latest Ratings for TSLA

DateFirmActionFromTo
Oct 2020BairdUpgradesNeutralOutperform
Oct 2020JMP SecuritiesUpgradesMarket PerformMarket Outperform
Oct 2020WedbushMaintainsNeutral

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KNXMorgan StanleyMaintains60.0
IPGMorgan StanleyMaintains22.0
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