AP Images / Mark Lennihan
- Tesla’s stock surged as much as 11% on Thursday following the company’s strong quarterly earnings report.
- The share spike has cost short sellers $1.1 billion in a single day, according to data from S3 Partners.
- The short squeeze marks a temporary victory for Tesla CEO Elon Musk, who has been locked in months-long battle with his company’s skeptics.
- Watch Tesla trade in real time here.
Score one for Elon Musk.
The Tesla CEO, who has long been an outspoken critic of stock traders betting against his company, struck a blow on Thursday after second-quarter earnings sent shares soaring by as much as 11%.
That resulted in a mark-to-market loss of more than $1.1 billion for short sellers, according to data compiled by financial technology and analytics firm S3 Partners.
The depth of the loss has a lot to do with just how heavily positioned Tesla skeptics were for a share-price drop prior to the earnings report. With short interest — a measure of wagers a stock will fall — at $10.53 billion, Tesla was far and away the most shorted company in the US stock market.
To fully understand what a victory this is for Musk, one must be familiar with his months-long crusade against Tesla short sellers — which he usual wages over Twitter.
“If you’re short, I suggest tiptoeing quietly to the exit …” he taunted in May, following Tesla’s previous earnings report.
In a Rolling Stone profile last year, he called them “jerks who want us to die,” while also describing their behavior as “hurtful.” He also fired off a tweet in June 2017 in which he said short sellers “want us to die so bad they can taste it.”
Then, in early April 2018, after a period of considerable stock strength, Musk escalated his taunts, tweeting, “Stormy weather in Shortville.”
At this point, it’s too early to declare a winner in this battle for the ages. After all, Tesla’s strong quarter has again boosted forecasts around the company, and further raised the firm’s valuation. And with higher expectations come a greater chance for disappointment.
Stay tuned for the latest twists and turns in this saga.
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Get the latest Tesla stock pricehere.
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