Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
Tesla Inc (TSLA) reported strong second quarter results with 42% year-on-year revenue growth; strong vehicle demand (even as they raised car prices); and continued production forecast of 50% annual sales growth (even as gross margins slipped due to supply chain challenges). The end of “supply chain hell” may turn into a “short squeeze hell” for TSLA short sellers as Elon Musk says the firm has the “potential for a record breaking second half of the year.”
TSLA short interest is $18.54 billion, 24.98 million shares shorted, 2.92% SI % Float, 2.84% S3 SI % Float (which includes the synthetic longs created by every short sale in the trade float denominator) and a stock borrow fee of 0.30% (General Collateral).
TSLA short sellers were actively trimming their exposure ahead of the earnings release, covering 2.09 million shares, worth $1.55 billion, over the last thirty days. This is a -7.7% decrease in TSLA shares shorted as its stock price rose +14.2%. Over the last week we saw 1.20 million shares bought to cover, worth $891 million, a -4.6% decrease in total shares shorted as TSLA’s stock price rose +4.4%.
TSLA continues not only the largest short in the U.S. but also worldwide.
Name
Ticker
SI % Float
S3 SI % Float
Fee
Short Interest
TESLA INC
TSLA
2.92%
2.84%
0.30%
$18,544,685,198
APPLE INC
AAPL
0.69%
0.68%
0.30%
$16,999,989,586
AMAZON.COM INC
AMZN
0.91%
0.90%
0.30%
$9,857,363,024
MICROSOFT CORP
MSFT
0.51%
0.51%
0.30%
$9,844,540,755
VISA INC
V
2.06%
2.02%
0.30%
$7,215,280,660
NVIDIA CORP
NVDA
1.38%
1.36%
0.30%
$5,898,562,339
ALPHABET INC - A
GOOGL
0.84%
0.83%
0.30%
$5,701,782,176
META PLATFORMS INC
META
1.23%
1.21%
0.30%
$5,118,469,716
ALIBABA GROUP ADR
BABA
1.72%
1.69%
0.30%
$4,762,190,220
ALPHABET INC - C
GOOG
0.69%
0.68%
0.30%
$4,328,458,790
TSLA has held the top spot for most of 2020-2022, only temporarily giving up the crown to Apple, Inc (AAPL) in the first quarter of 2020.
TSLA is not only the largest short in the U.S. market, but one of the top hedge fund long holdings according to regulatory filings. With our sentiment and market positioning data, we see that TSLA is the ninth most owned stock by hedge funds with quant and fundamental funds owning the majority of the shares.
Name
Ticker
Long Holdings
MICROSOFT CORP
MSFT
$45,395,408,850
AMAZON.COM INC
AMZN
$33,492,794,772
ALPHABET INC A
GOOGL
$20,585,633,578
ALPHABET INC C
GOOG
$20,408,090,256
VISA INC
V
$18,280,346,306
APPLE INC
AAPL
$17,796,367,309
META PLATFORMS INC
META
$15,619,083,727
ICAHN ENTERPRISES LP
IEP
$13,357,155,892
TESLA INC
TSLA
$12,201,257,468
CHENIERE ENERGY PARTNERS
CQP
$11,522,503,292
TSLA shorts are down -$1.01 billion in mark-to-market losses on today’s +5.4% spike in stock price. Today’s move is increasing July’s losses to $-$2.67 billion in mark-to-market losses, -14.2% monthly return on an average short interest of $18.81 billion. For the year, TSLA shorts are still profitable, up +$6.34 billion in year-to-date mark-to-market profits, up +29.6% in 2022.
TSLA is the worst performing short in July in dollar terms, joined by several FAANG, crypto and meme stocks.
Name
Ticker
Avg Fee
Avg Short Interest
Total P\L $
P\L %
TESLA INC
TSLA
0.30%
$18,808,286,625
($2,673,243,911)
-14.21%
APPLE INC
AAPL
0.30%
$16,249,844,429
($1,601,379,352)
-9.85%
AMAZON.COM INC
AMZN
0.30%
$9,376,555,669
($1,008,647,032)
-10.76%
NVIDIA CORP
NVDA
0.30%
$5,103,647,635
($609,998,511)
-11.95%
VISA INC
V
0.30%
$6,895,765,122
($568,359,464)
-8.24%
COINBASE GLOBAL INC
COIN
6.02%
$1,687,066,241
($551,923,446)
-32.71%
LUCID GROUP INC
LCID
19.43%
$2,721,371,444
($479,744,261)
-17.63%
GAMESTOP CORP
GME
32.05%
$1,831,014,482
($443,463,550)
-24.22%
META PLATFORMS INC
META
0.30%
$4,649,793,372
($410,281,146)
-8.82%
MICROSTRATEGY INC
MSTR
8.07%
$731,372,757
($370,212,912)
-50.62%
With TSLA’s stock price rallying and short sellers incurring $1 billion of mark-to-market losses today, we should expect its short covering trend to continue as short sellers get squeezed out of their positions due to these large and sudden losses. These buy-to-covers and the potential for hedge funds to bulk up their positions in a high beta name with a positive price trend may help reverse TSLA’s year price weakness.