• Research

Mar 27, 2018

S3 Analytics: Tesla Shorts on Autopilot, up $749 million Today

Tesla Inc.’s (TSLA) stock price fell 8.2% today on the news that the U.S. National Transportation Safety Board is investigating a March 23rd Tesla fatal car crash in California but is unsure “if automated control system was active at the time of the crash.” Tesla’s stock price plummeted $25/share on the news and its $279.18 closing price is the lowest since the end of March 2017.

Tesla is the second largest U.S. equity short, behind only Apple Inc. (AAPL) and the most profitable short in the U.S. market after today’s price decline. Tesla short sellers are now up $835 million in 2018 mark-to-market profits after making $1.86 billion in March and $749 million in mark-to-market profits today.

While Tesla short interest in dollars has been declining recently, it was not due to shorts covering their positions but due to Tesla’s stock price declining 10.3% this year. Short sellers have actually been active since the second week of March, selling short 3.6 million shares in the last three weeks. Shorts sellers were selling into the dropping market, increasing their share bets in order to keep their dollars at risk around the $9 billion level. Short sellers are nearing their full year high in shares shorted, just over a million shares below the 32.7 million shares shorted on December 6th, 2017 but way below their historical high of 35.5 million shares shorted on January 6th 2017.

Tesla short sellers still have a long haul to recoup their recent mark-to-market losses. They were down $866 million in mark-to-market losses in 2016 and down $3.6 billion in mark-to-market losses in 2017. This year’s $835 million mark-to-market gain makes up only 19% of the losses they incurred in 2016-2017.

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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