Tesla domination of Ford, GM costs short-sellers $2B in 2020

Upstart Tesla is now bigger than two of the Big 3 U.S. automakers combined

Tesla’s surging stock price is making it an unhappy New Year for investors betting against the electric-car maker.

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Shares of the Palo Alto, Calif.-based company surged 4.9 percent Wednesday to a record $492.14 after Argus Research raised its price target to a Wall Street high of $556. Tesla’s market capitalization finished the day at $88.7 billion, or more than Ford and General Motors combined.

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The gain saddled short-sellers with $631 million in mark-to-market losses, bringing their 2020 losses to $2.02 billion after a year-to-date spike of 17.6 percent. Yet they remain undeterred in their bets against the automaker.

“Tesla shorts keep incurring losses, but their conviction remains solid,” Ihor Dusaniwsky, managing director at the financial-analytics firm S3 Partners, told FOX Business. “Shorts have only covered about 335,000 shares in 2020, a decrease of only -1.2 percent, while nearly matching the losses they incurred in all of 2019.”

TickerSecurityLastChangeChange %
TSLATESLA INC.387.79+7.43+1.95%

An avalanche of positive news from Tesla over the past few months has been a thorn in the side of short-sellers, who are loathed by CEO Elon Musk and have taken repeated potshots from the billionaire entrepreneur.

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Tesla reported a surprise third-quarter profit on Oct. 23, igniting a 93 percent rally. Along the way, the first Model 3 sedans have rolled off the company’s China assembly line and 2019 deliveries topped the lower end of Musk’s forecast.

The gains have brought out a number of skeptics, including Citron Research, the firm run by short-seller Andrew Left. On Dec. 27, the firm tweeted that Tesla had done “too much too fast,” and said it would be a buyer 100 points lower. That was when shares were trading near $430 apiece, or 14.5 percent below Wednesday’s closing level.

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