Bearish bets against Tesla stock fall to all-time high, data provider says


Tesla began to chart a familiar bumpy path as a new member of an old stock index on Monday.

However, one thing that has changed is the number of bets against the shares of the electric vehicle maker, in the hopes that the share price would collapse and enrich the pockets of so-called short sellers.

Tesla shares fell 4.4% on Monday on its first day of listing as a member of the S&P 500, but that drop should not be attributed to these short sellers, with bearish bets against the based company. Palo Alto, Calif., Hitting the lowest since at least 2017, according to Ortex Analytics.

Read: As Tesla debuts in the S&P 500, do you know if you own it?

Bearish bets against the company, considered one of Wall Street’s shortest stocks, fell to 31.4 million in December, “considerably lower than the high of 93.6.” [million] recorded in January of this year, ”Ortex reported.

Peter Hillerberg, co-founder of Ortex Analytics, estimated that short sellers lost $ 28.5 billion on betting Tesla’s stock would drop steadily from its all-time high, as it headed for its inclusion in the S&P 500.

To verify: Tesla’s biggest scramble to $ 7,000 price target

However, that has not been the case, as shares of the company led by outspoken leader Elon Musk have risen nearly 700% in 2020 so far, according to FactSet data. By comparison, the S&P 500 SPX index,
+ 0.15%
jumped a respectable 14.3% in 2020, the Dow Jones Industrial Average DJIA,
+ 0.10%
has climbed nearly 6% since the start of the year and the Nasdaq Composite Index COMP, in charge of technology,
where Tesla resides, is on track for a 42% return for the year.

Still, those moves are pale compared to Tesla’s soaring rise, which entered the S&P 500 as one of the largest companies in history and the fifth or sixth largest component currently.

“As a result, a large number of short sellers closed their positions, wanting to avoid the ‘hype premium’ that is so often associated with Elon Musk’s company,” Hillerberg wrote in an emailed note.

That said, the analyst says Tesla will likely be tested in the coming days and weeks.

“However, the battle is far from over, we expect many to sit on the sidelines and look to pounce when the hype wears off,” he wrote.

Read: Tesla joining the S&P 500 on Friday is the ‘mother of all’ stock market events


About Edward Fries

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