Tesla Short Covering Ahead of Earnings

    Author:

    Ihor Dusaniwsky

    Managing Director of Predictive Analytics, S3 Partners

    Matthew Unterman

    Director of Predictive Analytics, S3 Partners

    April 19, 2023

    Tesla Inc (TSLA) continues to hold the #2 spot in the U.S. most shorted league table, behind Apple Inc (APPL) since early March as the two most shorted stocks in the U.S. have been battling for the top spot since late 2022. TSLA short interest is $15.42 billion, 83.65 million shares shorted, 3.10% SI % Float, 3.00% S3 SI % Float (which includes the longs created by every short sale in the denominator).

    Largest U.S. Shorts

    Ticker

    SI % Float

    S3 SI % Float

    Short Interest

    APPLE INC

    AAPL

    0.71%

    0.70%

    $18,608,775,703

    TESLA INC

    TSLA

    3.10%

    3.00%

    $15,417,099,109

    MICROSOFT CORP

    MSFT

    0.57%

    0.57%

    $12,052,127,706

    NVIDIA CORP

    NVDA

    1.52%

    1.50%

    $9,972,815,280

    VISA INC

    V

    1.91%

    1.88%

    $7,250,020,813

    META PLATFORMS INC

    META

    1.33%

    1.31%

    $6,431,806,447

    AMAZON.COM INC

    AMZN

    0.68%

    0.67%

    $6,220,633,132

    ALIBABA GROUP ADR

    BABA

    1.97%

    1.93%

    $4,963,041,949

    TMOBILE US INC

    TMUS

    6.19%

    5.83%

    $4,844,998,494

    HOME DEPOT INC

    HD

    1.39%

    1.37%

    $4,199,030,475

    ALPHABET INC - A

    GOOGL

    0.67%

    0.67%

    $4,173,205,306

    TC ENERGY CORP

    TRP

    9.95%

    9.05%

    $4,144,194,735

    EXXON MOBIL CORP

    XOM

    0.86%

    0.86%

    $4,100,950,617

    PALO ALTO NETWORKS INC

    PANW

    6.42%

    6.03%

    $3,819,234,044

    TEXAS INSTRUMENTS

    TXN

    2.25%

    2.20%

    $3,679,133,875

    BROADCOM INC

    AVGO

    1.40%

    1.38%

    $3,613,792,266

    CANADIAN NATURAL RESOURCES

    CNQ

    5.20%

    4.94%

    $3,418,930,318

    ALPHABET INC - C

    GOOG

    0.58%

    0.58%

    $3,172,611,793

    ADVANCED MICRO DEVICES

    AMD

    2.19%

    2.14%

    $3,132,934,240

    IBM CORP

    IBM

    2.67%

    2.60%

    $3,095,547,551

    While TSLA’s short interest has been extremely volatile since 2022, reaching a high of $29.00 billion in May 2022 (TSLA’s historical high is $51.00 billion in January 2021) and a recent low of $8.60 billion in December 2022, APPL’s short interest has remained relatively stable with a high of $19.99 billion in August 2022 and low of $14.55 in January 2022.

    My image alt text

    After seeing additional TSLA short selling in the earlier part of 2023 we have seen short covering recently with 3.4 million shares covering over the last thirty days, worth $622 million, a -3.9% decrease in total shares shorted as its stock price rose +2.3%. TSLA had the fourth largest decrease in share shorted over the last thirty days.

    Largest Increase in 30 Day Short Covering

    Ticker

    Short Interest

    30D Change Shares Shorted

    ALIBABA GROUP ADR

    BABA

    $4,963,041,949

    ($1,306,238,085)

    TECK RESOURCES LTD B

    TECK

    $754,686,116

    ($1,139,471,400)

    CANADIAN NATURAL RESOURCES LTD

    CNQ

    $3,418,930,318

    ($672,881,462)

    TESLA INC

    TSLA

    $15,417,099,109

    ($622,056,940)

    JPMORGAN CHASE CO

    JPM

    $2,273,453,379

    ($529,818,136)

    AGNICO EAGLE MINES

    AEM

    $646,766,203

    ($454,674,777)

    RITCHIE BROS AUCTIONEERS

    RBA

    $375,906,917

    ($449,172,670)

    NVIDIA CORP

    NVDA

    $9,972,815,280

    ($444,796,936)

    SUNCOR ENERGY

    SU

    $661,207,417

    ($413,515,841)

    DUPONT DE NEMOURS INC

    DD

    $619,200,019

    ($387,829,232)

    TSLA short sellers have given back more than a third of last year’s $15.85 billion of mark-to-market profits. Today’s -1.4% mid-day stock price move gave shorts $218 million of daily mark-to-market profits, bringing April’s total to +$2.16 billion of mark-to-market profits. Even after a very profitable April, TSLA shorts are still down -$5.52 billion in 2023 year-to-date mark-to-market losses. Since TSLA began trading in 2010, short sellers are down -$55.4 billion in mark-to-market losses.

    TSLA’s recent price cuts may have a significant impact on margins but continued profitability and potentially increased demand in the overall EV market, in which TSLA is the clear-cut market leader, may drive more demand toward Elon Musk’s automobiles and keep revenue guidance forecasts up. Recent TSLA short covering may be an indication that some short sellers think that TSLA’s profit margins will stay in the 20% range and trimmed their exposure to lock in some of April’s mark-to-market profits in the anticipation of a stock price rally.

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