It’s mostly been a tough year for those betting against Tesla. The company’s stock price has defied dire predictions amid Tesla’s travails mass-producing the Model 3 and the antics of CEO Elon Musk. But not this month.
On Sept. 7, after a barrage of erratic behavior by Musk and departures by multiple executives, Tesla shares took their biggest tumble in two years. The stock was down 29% from its recent high of $370 just one month prior. And previously pummeled short sellers are breathing a sigh of relief.
According to S3 Partners, a financial technology and analytics firm, Tesla short sellers have notched more than $1 billion in losses in 2018, but this week they’ve finally seen a profit. On Sept. 7, the shorts were up $510 million in mark-to-market profits, and up $737 million for the year. Just one month earlier, short sellers had been down $1.3 billion for the year.
The earlier losses were largely due to an Aug. 7 tweet by Musk that he was “considering taking Tesla private at $420. Funding secured,” sparking a stock rally. It was not to be, however. The bid failed, the stock retreated. All told, short sellers have reaped $2.4 billion since Musk’s fateful tweet, while the average daily profits for short sellers in September hit a high of $176 million.