Elon Musk has spent most of his life proving people wrong but betting against Tesla has been the most profitable short trade of 2022.
A note released by financial data firm S3 Partners on Thursday revealed short sellers made $15 billion in mark-to-market profits year-to-date betting against the electric vehicle manufacturer.
It’s easy to see why when you look at what Tesla’s share price has done since January 1.
Another brutal day on Wall Street overnight Thursday — where the TSLA share price plunged almost nine per cent — was the latest blow in a horrific year.
Tesla stock is down almost 70 per cent year-to-date, meaning the company’s value has fallen below $400 billion — down from a high of $1.23 trillion in November last year.
Musk has pointed the finger at the Federal Reserve’s interest rate hikes for Tesla’s free fall, but the bulk of the profits from shorting his company have come since April, when he first made a proposal to buy Twitter.
“Since Elon Musk announced his Twitter bid on April 14th, short sellers have hit overdrive with 8.18 million shares of additional short selling, worth $1.13 billion,” S3 managing director Ihor Dusaniwsky said.
The share price also dropped dramatically when the 51-year-old completed his takeover of the social media giant.
The bloodbath appears to have prompted some desperate discounting on Model 3 and Model Y cars.
Tesla is now offering a $7500 credit and 10,000 miles of free supercharging for any buyers who take delivery before the end of the year in an attempt to boost sales.
But the move wasn’t welcomed by investors who pushed Tesla’s share price down to levels not seen since September 2020.
Musk’s $44 billion takeover of Twitter has been fraught with controversy and viewed by some as a distraction to his oversight at Tesla.
He also sold $40 billion of his Tesla stock this year.