Investors betting against Tesla in 2023 came up more than just a little short.
Known as short sellers, investors who bet on a company’s stock going down lost a combined $12.2 billion betting against the electric vehicle giant last year, according to estimates published by CNN from markets analytics firm S3 Partners.
The 2023 shorts may have expected the trends of 2022 to roll into 2023. Tesla stock plummeted 65% in 2022 amid concerns about inflation and CEO Elon Musk’s controversial acquisition of Twitter, now X, after which shorts made a $15.9 billion profit, per CNN.
But Tesla stock skyrocketed in the first six months of 2023, closing out at $13 billion in losses for the shorts, which was only slightly cushioned by a $771 million profit for the last six months of the year as Tesla stock dropped 15%.
Shorts all around, not just the ones who bet against Tesla, likely had a bad 2023 as the S&P 500, the Dow Jones Industrial Average, and the Nasdaq all soared, as CBS News reported.
Tesla, a pioneer in the more planet-friendly EV industry, has been a target for short sellers since going public in 2010. According to S3 and CNN, shorts have a net loss of $61.8 billion since then.
S3 managing director Ihor Dusaniwsky joked to CNN, “[That’s] going to leave a mark.”
For those looking to bet on, or against, Tesla in 2024, it’s a coin toss.
Dan Ives, an analyst with Wedbush Securities, told CNN in early January: “Every year the bears come out of hibernation mode and think, ‘This is the year that Tesla shares collapse.’ The bears view it as an automobile company that should trade at a valuation a multiple of GM or Toyota. The bulls [investors with a more positive outlook] such as myself believe it’s a disruptive technology company. And that’s the Wall Street consensus view.”
But just a few weeks later, Ives changed his tune. After a late January earnings call in which Musk tempered expectations, and after which Tesla stock took a 12% dive, Ives wrote an assessment quoted by Investor’s Business Daily.
He said, “We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand. Instead we got a high level Tesla long term view with another train wreck conference call.”
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