A common saying has been coined in recent years that the definition of insanity is doing the same thing repeatedly and expecting different results. If this was the real definition of insanity, it would fit Tesla short sellers nicely.
As of 10:45 EST, Tesla ($TSLA) stock traded at $503.62 per share, up 5.33% from Friday's close; as compared to the S&P 500, which weighed in at $3274.48, up 0.28% from the morning's open.
Ihor Dusaniwsky (@ihors3) is fairly well-known on Twitter for his work and updates as a data analyst. He consistently posts updated short interest statistics, a metric that few people have accurate and up-to-date access to.
This morning, Ihor posted an updated graph showing Tesla stock's short interest, as compared to the company's stock price. Keep in mind while reading this graph, the higher the stock rises, the more money short sellers lose.
In recent months, Tesla has had one of the most insane and profitable rallies for a company this size, gaining nearly thirty billion in market cap over the course of a few short months. Despite this tear, however, short sellers appear to be clinging to their ways.
The graph Ihor tweeted out appears to have data only to the end of Friday afternoon. Last week, Tesla stock took a very small hit. It appears, by the orange graph, that short interest took a huge jump. Shorts are desperate for the stock to tumble, but Tesla is not affording them the pleasure.
The real kicker for short sellers is this: Tesla hit an all-time high today (again). If a stock hits an all-time high, it means that out of all of the accounts that actively short Tesla's stock, all of them have lost money.
Shorting a stock is a bearish position, meaning that those who are short gain when the stock loses. As is the way of markets, they also lose when the stock gains. Tesla has pushed the all-time high further and further up, meaning that there is not an active short seller in existence who has profited off shorting the stock.
That being said, it is astounding to see how stubborn short sellers are. Even being only 13 days into the year 2020, short sellers have already lost a combined 2.24 billion dollars. Yet, short interest bumps up by 818,000 shares. Only time will tell the fate of short sellers. If Tesla continues at its current pace, interest and forced covering will soon drown short sellers, driving the stock price up further.
Cover image used courtesy of Ihor Dusaniwsky (S3 Partners)
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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.