Tesla bears suffer biggest hit yet, as short bets bring USD9.5 billion of losses for hedge funds in August

Tesla

Hedge funds betting against Tesla have suffered their worst monthly hit yet, with negative wagers bringing a hefty USD9.5 billion of losses to short sellers in August – but recent turbulence in Elon Musk’s mega-cap electric carmaker this week may yet offer future hope for bearish investors.

Tesla – often dubbed the ‘world’s most shorted stock’ – accounted for most of the USD11 billion worth of losses posted by short sellers as a result of wayward bets against Nasdaq 100 firms last month.

New data from Ortex Analytics shows the USD9.5 billion Tesla hit suffered by hedge fund short sellers was the tenth successive month of unprofitable short bets against the company - and the largest monthly loss since the Musk’s firm went public in 2010.

Tesla’s stock price has roared upwards over the past year, its market cap surging well over the USD400 billion territory. Earlier this week, though, the e-vehicle manufacturer was excluded from the S&P500, triggering a 21 per cent plummet in its share price at one point on Tuesday.

“It is clear that as Tesla matures as a company, the stakes are getting higher,” Peter Hillerberg, co-founder of Ortex Analytics, said of the numbers.

“August represents another victory for Elon Musk in his long-running battle with Tesla short sellers. In July, we predicted that the battle wasn’t over, and our latest daily data still backs that up: current short bets against the company are worth USD19.5bn indicating no lack of appetite from traders.”

He added: “Last month registered a record-breaking loss for those holding short bets in the company and they’ll be desperately hoping the long-awaited reversal in fortune comes this month.”  

In total, short sellers only profited from 28 out of the 100 companies that make up the Nasdaq 100 benchmark last month, Ortex said.

Malfunctioning short bets brought losses of USD486 million on Facebook, and USD451 million on Amazon, during August.  The most profitable short for hedge funds was Apple, which returned USD2.3 billion last month.