Tesla short sellers have suffered a further loss of $4 billion USD this week, reports an article published by Yahoo Finance. According to S3 Partners, the total for 2020 tallies up to $30.3 billion USD in losses for the short sellers.
— Yahoo Finance (@YahooFinance) November 21, 2020
After the company’s addition to the S&P 500 index was confirmed, Tesla’s share price hit a record-high of $508.61 USD. The culmination of this week’s gains ups Tesla’s shares by 487% year to date.
As Tesla continues to excel this year, many short sellers are forced to consider resignation. In the last 30 days alone, Tesla’s short interest has taken a hit of $3.3 billion USD. Simply put, short sellers are traders betting against a company and in this case look to see Tesla fail, as it will result in profits.
Tesla CEO Elon Musk has naturally opposed short sellers of the company, even going so far as to release ‘short shorts’ company apparel, poking fun at these traders.
With a total of $22 billion USD in short interest at the moment, Tesla is by far the most heavily shorted stock worldwide, according to S3 Partners analyst Ihor Dusaniwsky. Alibaba Group Holding Limited holds the second spot with only $12 billion USD in short interest.
“The exit of older TSLA shorts not being replaced by new TSLA shorts may produce a dramatic drop in total TSLA shares shorted in the month of December,” said Dusaniwsky.
Even with significantly lower global sales, Tesla’s $480 billion USD market cap exceeds that of most of the legacy automakers (General Motors, Ford Motor Company, and Fiat Chrysler Automobiles included) combined. Tesla also beat numerous auto-industry giants in Interbrands’ Top 100 global brands list for 2020.