Traders make $11.5 billion betting against Tesla
Tesla's short sellers made $11.5 billion this year. The stock has posted a 44% decline this year.
Quick overview
- Tesla's stock has declined 44% this year, leading to significant profits for short sellers who made $11.5 billion.
- The company is expecting a mild year-over-year revenue dip and has reported a decrease in vehicle deliveries.
- Tesla shares experienced their worst quarterly performance since 2022, dropping 36% in the first quarter due to concerns over tariffs and competition.
- The company is struggling in the robotaxi sector, facing competition from Alphabet's Waymo and cheaper Chinese rivals.
Investors who hold Tesla stocks have faced significant challenges over the past year, while short sellers have profited handsomely after wagering against the firm’s stock.
Tesla’s short sellers made $11.5 billion this year. The stock has posted a 44% decline this year. The share price drop is as of Monday’s market close.
The electric vehicle company is also anticipating reporting a mild dip in yoy revenue, having already communicated a decrease in vehicle deliveries to 13 in the dash for the quarter.
The stock saw a dip around 4% on Tuesday in conjunction with the rest of the market, then bounced back when entering trade the day before the earnings report on July 30. With Tesla facing severe US and European backlash and protests, a Musk-backed AfD party advocating for Germany, it does not seem the company is getting much support.
Tesla shares plummeted 36% in the first quarter, their worst performance for any period since 2022, and have continued to drop in April, largely on concerns that President Trump’s sweeping tariffs on top trade partners will increase the cost of parts and materials crucial for EV production, including manufacturing equipment, automotive glass, printed circuit boards and battery cells.
Additionally, the company is lagging in the robotaxi sector, which is now dominated in the U.S. by Alphabet’s Waymo, and is having difficulty keeping up with its cheaper Chinese competitors. In June, Tesla plans to introduce its first autonomous ride-hailing service in Austin, Texas.
Among tech megacaps, Tesla has had the largest stock loss this year. Nvidia, down almost 28% as of Monday’s closing, is next in line. According to S3, the chipmaker has produced returns of $9.4 billion, making it the second-best profit generator for short sellers.
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