The recent 10% decline in Tesla’s stock price brought short sellers $3 billion in gains.
After severe pressure after the company’s poor Q3 results call and demand worries, Tesla (NASDAQ: $TSLA) shares dropped more than 18%. Short sellers have profited $3 billion since Tesla’s earnings announcement because of this decrease.
The massive decrease in Tesla’s share price after the release of the company’s bad earnings report on October 19 generated $3 billion in profits for short sellers. Short interest in Tesla shares was estimated at $18.08 billion, or 3.21 percent of free float, based on data from financial analytics platform Ortex. This information covers the time between the earnings release date and Friday, October 27.
Since the results call, the stock price has dropped by almost 18%, wiping off over $213 billion in market capitalization, according to statistics compiled by TradingView. The earnings report was a major issue, since it indicated a decline in both profits and revenues and a year-over-year margin decrease from 17.2% to 7.6% owing to price cutbacks.
Panasonic, a Tesla supplier and partner for many years, has made some negative comments. Concerns about waning demand for electric vehicles were stoked by the announcement that the electronics giant has cut battery cell output in Japan for the year ending in September 2023.
Elon Musk’s lackluster response to questions about Cybertruck also scared away potential backers. Delivery of the first electric pickup trucks is expected to begin by the end of November, although Musk has stated it would “take a year to 18 months before it is an important positive cash flow contributor.”
The decrease in Tesla’s stock price after a poor third-quarter financial report has reignited arguments among analysts and investors about the company’s actual character.
The impending introduction of Tesla’s Full Self-Driving (FSD) solution is a major point of contention for Tesla bears who are skeptical of the tech story. American investment manager Jim Chanos claims the firm has been “selling the FSD product since 2016, and it still doesn’t exist.”
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