Tesla bears have made a profit this year.
On June 2, local time, the Wall Street Journal quoted data from Ortex Research as saying that as of the close of trading on May 27 in early 2022, the real and floating profits of investors shorting Tesla have reached $6.8 billion. As recently as May 26, that figure topped $8 billion.
As of the close of U.S. stocks on June 1, Tesla fell 2.36% to $740.37 per share. Tesla’s stock price has fallen nearly 30% since the beginning of this year, with a stock price swing of 55.59%. Since the beginning of this year, the Nasdaq 100 index has also fallen by 23.11%, with an amplitude of 30.77%.
Falling stock prices have provided an opportunity for bears. They short the company by selling the borrowed stock, which they later buy back, and earn the spread. In addition, many investors also control risk in their portfolios by shorting stocks.
Shorting giant tech stocks has been one of the most profitable trades so far this year, The Wall Street Journal wrote.
According to Ortex Research, as of the close of U.S. stocks on May 26, short sellers have gained $62.5 billion from the tech-heavy Nasdaq 100 since the beginning of the year. Of that, Tesla shorts made about $8.2 billion. In addition, the gains from shorting Amazon, Meta, and Apple were $3.8 billion, $3.7 billion, and $3.5 billion, respectively.
Interestingly, Tesla's stock price has also caused a “dark battle” between the former world's richest man Bill Gates and the current richest man Elon Musk.
On May 27, local time, Musk tweeted: “Bill Gates is spending billions of dollars shorting Tesla while claiming to help solve global warming. I have some trust issues with Bill Gates. .”
Musk said that Bill Gates' short Tesla position was only $500 million at first, but as Tesla's stock price climbed, Bill Gates now needs $1.5 billion to $2 billion to close the position.
Asked by CNBC last year if he was bearish on Tesla, Bill Gates said: “I don't talk about my personal investments, but I think he (Musk) should be credited for his accomplishments. Proud.”
For Tesla, which is facing internal and external troubles, many analysts have downgraded Tesla's rating, but some have expressed optimism.
A few days ago, Wall Street investment firm Wedbush analyst Dan Ives lowered Tesla's target price from $1,400 to $1,000, a cut of nearly 30%. He said Tesla is facing more production slowdowns and supply chain bottlenecks caused by the outbreak. In addition, Musk's acquisition of Twitter is also a potential headwind for Tesla's stock price.
Credit Suisse analyst Dan Levy believes that Tesla's long-term opportunities are still intact, maintaining an outperform rating on the stock with a target price of $1,125.
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