• Research

Apr 11, 2018

S3 Analytics: Tesla Largest U.S. Equity Short Again, Overtakes Apple

Two weeks after Tesla Inc. (TSLA) hit its year-to-date high of $357.42/share, shares shorted hit their year-to-date low of 27.5 million shares on March 6th, Tesla short interest was down to $9.0 billion after hitting a year-to-date high of $11.1 billion on January 17th. With Tesla’s stock price on a downward trajectory short sellers began to short into the price weakness, keeping their short exposure over the $9 billion level until Tesla’s stock price cratered in late March.

In just over this past month, Tesla’s shares shorted increased by 7.7 million shares, or 28%, as short interest jumped $1.7 billion to $10.7 billion. Tesla, which was overtaken by Apple Inc. (AAPL) as the largest U.S. equity short recently, is back on top of the league tables, a position it has held since March 2016.

Tesla short sellers are slightly down for the year, down $58 million in year-to-date mark-to-market losses making back all of their early year-to-date losses with a $2.2 billion profit in March followed by a $1.3 billion mark-to-market loss so far in April.

Tesla short sellers, after reducing their short exposure for the first two months of 2018, have reversed course and shorted Tesla stock heavily over the last five weeks, increasing their short exposure by 19%. After Tesla’s recent recovery from year-to-date lows, short sellers have not capitulated and continue to short stock. With Model 3 production delays, a recent possible autopilot related accident, and possible future financing issues after their bonds were downgraded Tesla short sellers have been reinvigorated. If the recent short selling trend continues, Tesla’s short interest may soon top its historical high of $11.47 billion set in September 2017.

Want deeper insight into the above analysis? Contact:
Managing Director Predictive Analytics, S3 Partners, LLC
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.

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