Short sellers have made $15 billion betting against Tesla stock this year

  • According to S3 Partners, investors made $15 billion by betting that Tesla stock would fall this year.
  • The value of Elon Musk’s company has fallen nearly 70% since its November 2021 peak.
  • Musk has refused to make any connection between Tesla’s demise and his takeover of Twitter.

Short sellers have made $15 billion this year betting that Tesla’s stock would fall as about $800 billion was lost in value, new research shows.

Analysis by S3 Partners showed that bets against Tesla stock proved to be the most profitable of 2022, with short positions against Amazon stock yielding a $6.2 billion return.

S3 said interest in betting against Tesla started to wane in April as the stock began falling, reducing potential returns, but picked up again in September as Elon Musk’s acrimonious takeover of Twitter was in its final stages.

About 3% of Tesla stock is shorted, making it the second-largest U.S. short after Apple.

One of those betting against the company is reportedly Microsoft founder Bill Gates, who Musk said was up to $2 billion short of Tesla earlier in the year.

Tesla’s value has fallen by more than $800 billion this year. The company was worth $1.24 trillion at its November 2021 peak, but shares closed at $123 on Friday, giving it a value of $385 billion. The stock started the year at nearly $400, down about 70%.

Musk’s stake in Tesla means his wealth has fallen by $132 billion this year, according to the Bloomberg Billionaires Index, and he is no longer the world’s richest person after being overtaken by Bernard Arnault.

Tesla wasn’t immune to a broader market sell-off amid high inflation and rising interest rates, which has sent the S&P 500 down nearly a fifth this year.

But Musk has consistently refused to make any connection between his work at Twitter and Tesla’s declining fortunes, despite several high-profile investors asking him to turn his attention back to the automaker.

He’s instead tried to blame the Federal Reserve’s rate hikes, which he thinks make all stocks — not just Tesla’s — less attractive.

The Twitter CEO has sold $3.6 billion worth of Tesla stock this year to fund Twitter’s operations while trying to shape the social media site in his vision.

On Thursday, Musk said he would not sell Tesla stock for at least 18 months.

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