Shares of Tesla ( TSLA ) snapped a nine-day winning streak after Monday’s trading session, putting pressure on sellers of the stock. S3 Partners Managing Director Ihor Dusaniwsky joins Catalysts to discuss Tesla’s rally and how short sellers are being affected by the move.
Dusaniwsky notes that Tesla short sellers have lost about $63 billion since the company’s public debut in 2010. He explains that Tesla is “a really important name for a lot of hedge funds because that’s the volatility that people are looking for to make a good profit”.
He also casts some doubt on the Bulgarian investors’ call to Tesla, explaining that the company is not just a fundamental trade: “It’s a trade that’s a little more technical market-driven because you have a ton of long holders that it’s just Tesla forever, and really, that’s what the market is doing rather than exactly what Tesla is doing.”
Read more about the Tesla rally here:
Tesla looks set to extend its winning streak into a 9th day
Tesla shares continue to rally as robot unveiling date nears
Tesla shares rise again, extending a monster 40% gain over the past month
For more expert insights and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Melanie Riehl
Video Transcript
We’ll turn our attention now to Tesla’s short sellers feeling the brunt of the stock’s recent rally.
A growing number of hedge funds piled into short bets in June.
And according to data provider Hazel Tree, about 18% of the 500 hedge funds the company tracks had a net short position in Tesla as of last month.
And that’s the highest percentage in more than a year since early June.
Tesla’s stock price is now up about 40%.
Bad news for those short sellers joining us now to discuss, we have Ihor Duski S3 partners, managing director Ior, thank you very much for joining us.
You’ve talked about it publicly before here.
So I want to get a number from you.
How much Tesla short sellers have lost since the stock made its public debut in 2010 right now.
It is over 60 billion dollars.
I think it’s about 63 billion at the moment.
So is $63 billion simply too expensive for anyone to bet against this habit?
This company regardless of their fundamentals?
Well, short sellers, I’ve been up and down this name over the last couple of years, it was the number one short in the market right now.
It drops to number four behind video, Apple and Microsoft.
So there’s been a little bit of eh you know, give and take in the name, but oh short still, you know, that’s like the OG acronym, everybody’s still on it.
So you are.
That’s what I wanted to ask you how often do you see traders, investors short a name like Tesla?
When you take a look at this activity that we see now comparing it historically, is there really anything unusual?
It doesn’t sound like it.
Well, we’ve been seeing some short coverage lately.
I mean there’s been a little bit of a squeeze on short covering and it’s a really important name for a lot of hedge funds because that’s the volatility that people are looking for to make a good profit, you know, in the name because you you can get big bang for your buck.
So I want to talk a little bit more about that because we have investors coming in and talking about the upcoming announcements that are coming from Tesla and they really continue to be positive signals for the name moving forward.
I’m thinking about the ongoing bullish sentiment around the robo-taxi, for example, to what extent are those investors betting on something that’s likely to become a reality for this stock versus the kind of dream that Elon Musk is most than happy to continue with fuel.
Tesla has always had some, you know, production, uh you know, opportunities where they’re, where they’re growing, different types of their cars, different types of services in their cars.
But really that name is, it’s not just a fundamental trade, it’s a trade that’s a little bit more technical driven because you have a ton of long holders that are just Tesla forever.
Uh And, and really, it’s what the market is doing rather than exactly what Tesla is doing.