According to a recent analysis, short sellers made $15 billion this year, betting that Tesla stock will decline. As a result, the value of Tesla stocks was reduced by approximately $800 billion.
S3 Partners’ analysis revealed that bets against Tesla shares turned out to be the most successful of 2022, with shorts against Amazon shares yielding a $6.2 billion profit.
S3 said that interest in betting against Tesla increased in September as Elon Musk’s contentious acquisition of Twitter neared completion but then started to decline in April as the stock began to decrease, lowering prospective rewards.
Tesla is the second-largest after Apple
Tesla is the second-largest US short after Apple, with about 3% of its shares shorted. Bill Gates, who founded Microsoft, is apparently one among those betting against Tesla. Earlier this year, Musk said Gates held a short position of up to $2 billion against Tesla.
This year, Tesla’s worth has decreased by more than $800 billion. The company’s value peaked at $1.24 trillion in November 2021, but as of Friday’s share price of $123, it was only worth $385 billion. The stock’s decrease from its year-opening price of approximately $400, or about 70%, is represented.
Due to his ownership of Tesla, Bernard Arnault has surpassed Musk as the wealthiest person in the world. Yet, as measured by the Bloomberg Billionaires Index, Musk’s wealth has decreased by $132 billion this year.
Despite high inflation and increasing interest rates, which have caused the S&P 500 to drop by roughly a fifth this year, Tesla has not been immune to a broader market selloff.
Even though some prominent investors have pleaded with Musk to return his focus to the automaker, Musk has persistently failed to connect his work at Twitter and Tesla’s deteriorating financial situation.
Musk would stop selling the stocks of the firm
Instead, he has sought to place the blame on the Federal Reserve’s ongoing practice of raising interest rates, which he claims makes all stocks—not just Tesla’s—less desirable to purchase. In order to support Twitter’s operations as he works to mold the social media platform into his vision, the Twitter CEO sold $3.6 billion worth of Tesla shares this year.
Musk announced on Thursday that he would stop selling Tesla stock for at least 18 months.
Elon Musk stated in a Twitter Spaces conversation with Whole Mars Catalog on Thursday. He said that he sold over $4 billion of Tesla stock this month. He did it to free up cash in case of emergency.
The CEO of the automaker is concerned that he and his businesses would suffer if higher borrowing rates. The rates are combined with a severe recession. “I needed to sell some stock just to make sure there’s powder dry to account for a worst-case scenario.” Musk said in a tweet.
