In January 2020, Tesla's short sellers suffered record losses of $5.8 billion. This became possible after the company's shares reached a new high and marked the victory of CEO Elon Musk in a long-term struggle with short sellers. In January, the company's shares rose 55 percent. An additional boost to stock prices was triggered by fourth-quarter earnings on Wednesday, when Tesla posted a profit of $105 million.
According to S3 Partners, the monthly losses of Tesla short sellers were the worst in history and the largest among short positions at S & P 500 in January. Losses were more than four times higher than the drop in short positions at Apple by $1.3 billion, which is the second largest loss for short sellers in the US stock market for the month.
“This has been quite the run,” said Ihor Dusaniwsky, managing director of predictive analytics for S3 Partners. According to him, many short sellers are likely to hold their positions, hoping that stocks will fall or exit slowly over time. “It’s going to take a while for this to shake out.”
The stock price this morning perfectly demonstrates the market sentiment towards Tesla.
Despite the fact that short sallers have been losing for several months, many of them continue to play against Tesla. We don’t know for sure what drives them, but the fact remains that they lost $5.8 billion in just one month of 2020.
Tesla shares have the largest percentage of short positions among all in the US market, which is about 20 percent. Despite this, the company continues its struggle and we must admit that it is very successful.
The California automaker has a big advantage over any other automaker. The company, in addition to cars, develops its own software and batteries, which makes it unique today. With progress at the Gigafactory in Shanghai and the construction of the Gigafactory in Europe, Tesla is only strengthening its position, which will certainly lead the company to even greater success.
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Featured image: Tesmanian