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Tesla short-sellers could be facing ‘short squeeze hell’, says S3 Partners

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Tesla, may be the most shorted stock in the world, but investors betting against the electric vehicle (EV) manufacturer lost $1 billion last week and could be facing a ‘short squeeze hell”, according to a report by Business Insider.

Tesla, may be the most shorted stock in the world, but investors betting against the electric vehicle (EV) manufacturer lost $1 billion last week and could be facing a ‘short squeeze hell”, according to a report by Business Insider.

Tesla stock jumped 10 per cent on Thursday after the company announced it had surpassed is Q2 profit estimates prompting some investors to cover their losing bets by buying Tesla stock.

The report cites a note issued by short-selling research firm S3 Partners as stating that a “short squeeze hell” is possible for Tesla after CEO Elon Musk said in the company’s second-quarter earnings call that it has “the potential for a record-breaking second half of the year”. 

Tesla’s short interest currently stands at a notional value of $18.5 billion, according to S3 Partners, while the stock also remains the ninth most popular long position among hedge funds, and they could help fuel a momentum driven rally as short-sellers rush to cover their positions.

Tesla stock is up 30% from its June low, but is still down 23% year-to-date.

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