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Sep 14, 2018

S3 Analytics: Tesla Reclaims #2 Spot on U.S. Most Shorted Equities List

Tesla Inc. (TSLA) short interest is $10.2 billion, 35.2 million shares shorted, 27.61% of its float

Tesla short selling has picked up recently, with almost 1.6 million shares sold short, or $460 million worth of stock, over the last week even as Tesla’s stock price has risen over $13/share. Tesla has now climbed up to the #2 spot in the most shorted U.S. stock league tables, moving ahead of Amazon.com, but still over $1 billion behind Apple.

In actuality, not only has the recent surge in Tesla short selling moved it closer to its once perennial #1 ranking, shares shorted are now back up to pre-Tweet levels. Tesla shares shorted are now 478k shares higher than they were on August 6th as shorts have taken advantage of the 14% share price drop since The Tweet. The post-Tweet short squeeze never fully materialized, there was some short covering by shorter term and momentum short sellers, but the longer term shorts held their ground and some actually increased their holdings on Tesla’s initial stock price spike.

Even though short sellers are down $166 million in mark-to-market losses on todays +1.5% price move, they have more than offset August 7th’s $1.3 billion mark-to-market loss and are now up $1.4 million in mark-to-market profits after The Tweet. Short sellers are still in the red for the year, down $295 million in mark-to-market losses in 2018.

Tesla short selling has been steadily increasing since August 27th as short sellers have been selling into Tesla’s recent price weakness which began in early August. Tesla’s almost 5% rally over the last week hasn’t deterred short sellers at all, with 1.6 million of shares shorted even with Tesla’s stock price strengthening.

Large long shareholders such as Baillie Gifford, Capital Group, Jennison Associates and Harbor Capital are not only holding onto their positions but, according to Bloomberg, increasing them. While short sellers such as Jim Chanos, David Einhorn, Crispin Odey and Mark Spiegel have maintained their short convictions throughout the volatility since last July. According to recent tweets and reports it looks like CEO Elon Musk will meet his third quarter 50,000 – 55,000 vehicle Model 3 production guidance - never before has there been so many $ billions riding on the production, or lack of production, of just a few thousand cars.

Want deeper insight into the above analysis?
Contact:  Ihor.Dusaniwsky@S3Partners.net
                 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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