- Since the 2019 low, Tesla’s stock has rallied over 400%.
- Long-suffering short sellers recently managed to catch a lucky break amid the coronavirus-induced selling.
- TSLA is overwhelmingly the most shorted stock currently.
Despite incurring massive losses due to Tesla’s (NASDAQ:TSLA) 2019-20 rally, short sellers are yet to give up. Their patience paid off somewhat during the coronavirus-induced market selloff.
According to fintech firm S3 Partners, Tesla short sellers were among the biggest gainers in a span of over seven trading days when short sellers made over $50 billion.
Over that period, the short selling interest increased by close to $15 billion. Short sellers consequently made mark-to-market profits of $51.3 billion during that stretch.
TSLA fell from a Feb. 24 opening price of $838 to a Mar. 4 close of $745 – a drop of about 11%.
Tesla short sellers catch a break after a long drought
The massive rally that Tesla enjoyed before the coronavirus epidemic spread caused considerable losses to short sellers. Some even gave up.
Early last month, Tesla short seller Steve Eisman threw in the towel. Eisman gained fame for betting successfully against the subprime mortgage crisis. He branded Tesla investors “cult-like” over their enthusiasm for the stock:
Look, everybody has a pain threshold. When a stock becomes unmoored from valuation because it has certain dynamic growth aspects to it, and has cult-like aspects to it, you have to just walk away.
Bears continue circling
Still, Tesla remains a favorite for short sellers and constantly leads the pack of the most shorted stocks. As of Mar. 5, Tesla remains ahead of Apple for most shorted company. Additionally, it leads with regards to short interest as a percentage of the float at 11.74%.
Unwavering TSLA short sellers include Stanphyl Capital’s Mark Spiegel. The perma-bear has argued that increasing competition will…