Tesla short sellers have lost $8 BILLION over the past seven months

Tesla’s short sellers have lost a stunning $8.4billion over the last seven months as the electronic carmaking company’s stock hit a record high and beat investor expectations. 

Short positions on Tesla shares suffered more losses than on any other company, according to S3 Partners, a financial analytics firm. 

Short sellers bet that the price of a stock is likely to go down. If it rises before they can cash out they’re forced to buy shares at a higher price to cover their losses. 

Tesla stock is currently about 150% up since June 3 when they hit a 52-week low of $176.99. The boost in sales and profits has surprised both skeptics and Wall Street as electric car sales beat expectations. 

On Friday shares climbed another 3% to close at $443.01 after reporting record fourth quarter sales, according to CNN. 

In the first two trading days of 2020, short sellers lost more than $700 million, according to S3. 

About 36 percent of shares were being sold short in May, however many Tesla short holders are still holding onto to their stocks, adamant that Tesla shares will plunge. 

‘Some of short-term shorts have been taken out. But many of the longer-term shorts, they’re sticking with it no matter what the price moves are,’ Ihor Dusaniwsky, the head of predictive analytics at S3 said. 

Tesla creator Elon Musk has been an outspoken critic of short sellers said they deliberately try to hurt the company by driving down shares. 

In 2018 Musk deliberated making Tesla a private company just to stop dealing with shorts. He said their ‘negative propaganda’ was a reason to get off the public market and that being a public company creates ‘perverse incentives for people to try to harm what we’re all trying to achieve.’  

Tesla stock is currently about 150% up since June 3 when they hit a 52-week low of $176.99. The boost in sales and profits has surprised both skeptics and Wall Street as electric car sales beat expectations. Tesla founder Elon Musk pictured above

Tesla announced on Friday that they delivered 112,000 vehicles in the fourth quarter, beating the expectations of 104,960 vehicles, according to IBES data from Refinitiv. Musk pictured unveiling the all electric, battery-powered Tesla Cybertruck in November 2019

Tesla announced on Friday that they delivered 112,000 vehicles in the fourth quarter, beating the expectations of 104,960 vehicles, according to IBES data from Refinitiv. It delivered approximately 367,500 vehicles during all of 2019, just meeting the low end of its target to deliver 360,000 to 400,000 vehicles.

Tesla on Friday said it demonstrated a production run-rate capability of more than 3,000 units per week at the Shanghai factory. 

However, short holders still expect Tesla to be eventually overtaken by more established car companies such as General Motors, Ford and BMW entering the electric car industry. 

‘We think questions remain about first half 2020 results and gross margin sustainability; we point out that Tesla is already lowering prices in China and faces a flood of (electric vehicle) competition in the U.S., with at least 25 new models debuting this year,’ CFRA analyst Garrett Nelson wrote in a client note on Friday.

The gains in Tesla’s shares have elevated its market capitalization to $80 billion, compared to GM’ market value of $52 billion and Ford’s market capitalization of $37 billion, according to Reuters.