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Tesla (TSLA) stock is the most shorted stock on the market. Over the last seven days, its short-sellers made $1.1 billion. It runs neck-and-neck with Apple.
While coronavirus is devastating the market, Tesla Inc (NASDAQ: TSLA) stock is still number one among most shorted stocks. According to fintech company S3 Partners, over the last seven trading days, short-sellers made a total of $51.3 billion. $1.1 billion of the mark-to-market profit belongs to Tesla’s short-sellers. However, the gains do not cover $9 billion of their year-to-date losses. On February 24, the beginning of the period considered, TSLA opening price made up $838. On March 4, the stock closed the day at $745. The drop reached about 11% and brought profit to those who bet on this plunge.
Further, S3 Partners analyzed the profits on a percentage basis. The firm has found out that the natural gas company Tellurian suffered a 76% plunge in stock, and its short sellers gained as much as 111% in return.
S3 Partners commented:
“If today’s up-market is followed by several more days of positive stock price movement, we should see short-covering activity in many stocks as short-sellers realize recently earned mark-to-market gains. A good portion of the $14.6 billion of recent short-selling activity may have a short lifespan, but a profitable one if shorts cover in time.”
Another much-shorted company is Apple Inc (NASDAQ: AAPL) the stock of which has long been running neck-and-neck with Tesla. Its short interest makes up $12,059,971,771, while Tesla’s is $12,434,081,724. Notably, Apple stock is one of those that investors continue to believe in despite coronavirus concerns. According to popular analyst Dan Ives, Apple stock will surge, thanks to the upcoming 5G iPhone 12, and correct the recent slight plunge.
Among other companies on the list of top ten with the largest short interest are Microsoft Corporation (NASDAQ: MSFT), Netflix Inc (NASDAQ: NFLX), Amazon.com Inc (NASDAQ: AMZN), AbbVie Inc (NYSE: ABBV), Alibaba Group Holding Ltd (NYSE: BABA), Charter Communications Inc (NASDAQ: CHTR), Visa Inc (NYSE: V), and Facebook Inc (NASDAQ: FB).
Smooth Performance of TSLA Stock
TSLA stock is still number one among shorted stocks, but it is not something to be proud of. Short sellers take on the transactions because they believe a stock’s price is heading downward. If they sell the stock today, they will be able to buy it back at a lower price at some point in the future. Some traders do short selling purely for speculation, while others want to hedge their downside risk if they have a long position.
Recently, we reported about an incident at Tesla’s Shanghai factory. The hardware in Model 3 vehicles was the 2.5 version instead of the 3.0 version the company promised. But despite underperforming customers’ expectations, TSLA stock was 0.54% up. Some are very optimistic about the carmaker’s future. For example, JMP Securities set a new price target of $1,060 per share. It is one of the highest on Wall Street and implies excessive earnings.
Yesterday, TSLA stock closed at $724.54 (-3.33%). The company’s market cap is $133.39 billion. Now in the premarket, it has lost 0.63% an dis trading at $720.