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Exactly How Much Money have Tesla Shorts Lost in 2020 (So Far)

by Christopher Larson January 23, 2020

Exactly How Much Money have Tesla Shorts Lost in 2020 (So Far)

 

Approximately every week, Twitter hero @Ihors3 of Predictive Analytics publishes data and charts comparing Tesla's short interest to the total stock price and market cap. 

 

Tesla has returned to #1 on the New York Stock Exchange in terms of total short interest by volume. Essentially, this means there are quite a few people who stand to gain from Tesla's downfall. Consequently, these same people stand to lose from Tesla's victories.

 

In celebration of the amazing few months that Tesla has had, one should consider the enormous amount of money that Tesla shorts have lost. In some ways, I applaud their willingness to lose everything in the face of a venture that most of Wall Street has since come around on. Thank you, short sellers, for continuing to fund Tesla's meteoric rise. 

 

First, here is Ihor's chart, comparing historical short interest (orange) volume to the stock price (green). 

 

 

Short interest by volume is currently 26 million shares. Cumulatively, these short sellers have an interest worth $15 billion.

 

Most importantly, due to the enormous and prolonged rise in stock price, the short sellers are down a collective $3.8 billion, just since the new year started. 

 

If we treat the short sellers as one collective body, and we pretend that they can lose money on weekends and holidays (they should be glad that isn't the case), that $3.8 billion loss represents about 165.2 million dollars per day. Furthermore, that equates to a whopping 6.8 million dollars per hour.

 

Or, if you want to get into the really haunting metrics...

 

Since 2020 began, Tesla short sellers have lost $1,800 per second, every single second of 2020. If you were in this situation, you would have lost $117,000 since you started reading this article.

 

Not to revel in the misfortune of short sellers, but an astronomical amount of money such as this can be hard to visualize it. Here are some more comparisons. 

 

Shorting Tesla in 2020 is like buying 950,000,000 Bic Mac sandwiches from McDonald's.... and throwing them all away. 

 

Shorting Tesla in 2020 is like buying a Model 3 every 19 seconds... and then driving every one into the ocean.

 

Shorting Tesla in 2020 is like funding 90 Falcon Heavy rockets for SpaceX. Assuming each one can be reused 50 times, and if a launch happened every week, shorting Tesla in 2020 is like funding Falcon Heavy launches for the next 86 years. 

 

Shorting Tesla in 2020 is like buying an 11% stake in Ford, and then giving it away.

 

Shorting Tesla in 2020 is like buying NIO. All of NIO. And then giving it away.

 

Shorting Tesla in 2020 is like buying a years' worth of generous groceries for 250,000 families (source). 

 

What the main point here is, at it's core, is that shorting Tesla in 2020 (or later) is like throwing money down the drain.

 

Short sellers, change your minds while you still have time. Tesla is the #2 highest valued automaker in the world. The company isn't going anywhere. Spend your time, talent, and money to better the company, and the future of mankind instead. 

 

 Follow me on Twitter!

 

Cover image used courtesy of Tech Crunch

Legal Disclaimer --

This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Christopher Larson, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Christopher Larson is not a shareholder in Tesla, Inc., however currently (at the time of this article's publishing) holds options or securities in Tesla Inc. and/or its affiliates.

 

 




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