Tesla is the most profitable short term of 2022. This is because traders ‘hit overload’ on their bets against the electric vehicle maker after Elon Musk’s deal via Twitter.

Elon Musk.Muhammed Slim Korkutata/Getty Images
According to S3 Partners, Tesla short sellers have made $15 billion in profits so far this year. This is despite Elon Musk’s purchase of Twitter. S3 Partners stated that short sellers are backing up their TSLA short exposure because it is the most profitable short in dollars value of 2022.

According to S3 Partners’ Wednesday research note, short sellers who bet against Elon Musk or Tesla are enjoying a record year.

According to the firm, Tesla was the most profitable short trade in 2022 with traders raking in $15 billion annually in mark-to market profits.

Musk’s April proposal to acquire Twitter, which resulted in $13.7 billion of the bulk of those profits, has been challenged by this fact. This fact is contrary to Musk’s belief that Tesla’s stock price fall can be attributed to Fed rate hikes which began in March and ended in April, rather than Musk’s recent purchase of Twitter.

Tesla shorts have increased $4.5 billion in December alone. Tesla stock dropped 9% on Thursday. These short-seller gains are now accelerating.

Ihor Dusaniwsky, managing director of S3, stated that short sellers have been supporting their TSLA short exposure. “It is the most profitable short in dollars value of 2022,” he said.

The bearish traders have not stopped fighting their Tesla trade. According to the note, Tesla stock saw an increase in short interest, with 3.78million shares being shorted in the past month.

Dusaniwsky stated that short sellers are in overdrive since Elon Musk’s Twitter bid was announced on April 14th. Short sellers have been selling 8.18 million additional shares of short selling worth $1.13billion.

He noted that Tesla’s volatility is partly due to the fact that only 36% of its shareholders are passive. This compares to 58% at Microsoft and 50% at Apple.

Dusaniwsky stated that the greater the number of long-term shareholders, the more volatile a stock’s trading and price movements. This volatility is only magnified if the stock is among the most shorted in the market.

Business Insider has the original article.
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By: mfox@businessinsider.com (Matthew Fox)
Title: Tesla is the most profitable short of 2022 as traders ‘hit overdrive’ on their bet against the EV maker following Elon Musk’s Twitter deal
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-most-profitable-short-elon-musk-twitter-tsla-2022-12
Published Date: Thu, 22 Dec 2022 17:46:55 +0000