A huge 2020 got even better this week for Tesla Inc (NASDAQ: TSLA) After Tesla confirms it will be added to the S&P 500 Index. Tesla shares hit new all-time highs of $ 508.61 this week after news from the S&P 500 during a worst weeks of the year for Tesla’s short sellers.
Before Friday’s 1.9% drop, Tesla’s short sellers had already suffered a loss of $ 4 billion so far this week, according to S3 Partners analyst Ihor Dusaniwsky.
On Thursday, Dusaniwsky said Tesla remained the world’s most short-circuited stock with more than $ 22 billion in short-term interest. This short interest amount is more than $ 10 billion more than the second shortest security, Alibaba Group Holding Ltd – ADR (NYSE: BABA). Alibaba only has $ 12 billion in short-term interest.
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Horrible week for shorts: Based on the numbers from S3, Tesla’s short sellers added more than $ 4 billion to their 2020 losses this week.
Following this week’s gains, Tesla shares have risen more than 487% year-to-date, and short sellers have taken hits all year. As of Thursday’s close, Tesla’s short sellers suffered $ 30.3 billion in mark-to-market losses in 2020, according to S3.
The huge losses are forcing some Tesla short sellers to leave their positions. S3 reported that Tesla’s short interest fell $ 3.3 billion in the past 30 days. Dusaniwsky said he expects this trend to continue until the end of the year.
“The release of old TSLA shorts that are not being replaced by new TSLA shorts could result in a dramatic drop in the total TSLA shares sold during the month of December,” said Dusaniwsky.
Taking Benzinga: Tesla’s market cap has almost grown to the size of the entire legacy auto market despite Tesla only making up a small fraction of global auto sales, so it’s understandable that short sellers are frustrated.
Ritholtz Wealth Management CEO Josh Brown said on Friday that traders should anticipate the valuation gap between Tesla and the legacy automaker. General Motors Company (NYSE: GM) to possibly cut back at some point.
Final ratings for TSLA
|November 2020||Morgan stanley||Upgrades||Equal weight||Overweight|
|November 2020||B of titles A||Maintains||Neutral|
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