Slashdot Mirror
Tesla Short Sellers Actually Made Over $1 Billion After Musk's Taking-Private Tweet (fortune.com)
An anonymous reader quotes Fortune:
Investors betting that Tesla stock will lose value -- so-called "shorts" -- have made $1.2 billion since CEO Elon Musk first tweeted about taking the company private. Much of that gain came on Friday, after the New York Times published a revealing, emotional interview with Musk that drove Tesla stock down nearly 9%. The tally comes from a report released Friday by stock analytics firm S3 Partners. The Friday collapse helped reverse a price spike after Musk's August 7 Tweet saying he was "considering taking Tesla private at $420," about 18% higher than the stock's market value at the time.
According to S3, the subsequent surge in Tesla stock cost short positions $1.3 billion. But soon after, it became clear that Musk had exaggerated the certainty of his funding, and the SEC began a probe of his statements, driving the stock back down. On Friday, the Times interview with Musk detailed his 120-hour work weeks, lack of social life, and reliance on Ambien to sleep. That sent the stock down 9% in one day, for a total drop of 19% over 10 days. That gave $2.5 billion back to the shorts, for a net gain of $1.2 billion since Musk's going-private tweet.
Tesla remains the most-shorted stock on the American stock exchanges, and the researchers note that only 4% of shorts have actually cashed in these on-paper gains.
According to S3, the subsequent surge in Tesla stock cost short positions $1.3 billion. But soon after, it became clear that Musk had exaggerated the certainty of his funding, and the SEC began a probe of his statements, driving the stock back down. On Friday, the Times interview with Musk detailed his 120-hour work weeks, lack of social life, and reliance on Ambien to sleep. That sent the stock down 9% in one day, for a total drop of 19% over 10 days. That gave $2.5 billion back to the shorts, for a net gain of $1.2 billion since Musk's going-private tweet.
Tesla remains the most-shorted stock on the American stock exchanges, and the researchers note that only 4% of shorts have actually cashed in these on-paper gains.
Has the short interest in Tesla decreased? If so, then shorts have cashed out, having a much better position than a week ago. But I'm not under the impression that the shorts have been exiting. It seems that there is a large contingent that really expects Tesla to outright fail, and they want to ride the stock down to zero.
There is a contingent that deeply wants to see Tesla fail because they view it as part of the environmental movement, and they see the whole movement as a leftist attack on free enterprise and their way of life. A company like Tesla being successful is counter to their worldview, and they desperately want to see electric cars fail. I have no evidence to prove that there's a connection to the Tesla shorts, but I suspect there is. I suppose that's part of the reason I so desperately want to see the shorts get bankrupted.
No, actually it is in the opinion of the law and SEC. behaviour of CEO statements are strictly enforced to a common standard. Given what has happened I would say it is almost a certainty at this point that Tesla/Musk will face at a bare minimum a large fine, whether they end there will be dependent on whether they perceive any malice in his actions (e.g. going after the shorts) or if potentially he, other board members or family of his profited from the surge.
Well, let's see.
Says Musk, and noone else.
Musk has been trying desperately to pump his stock, you mean. Instead of, you know, actually doing the required work.
Says Musk, post the SEC investigation start. The board members said the opposite.
Says Musk, and no one else.
After lacing himself up with a drug cocktail, and coordinating it with nobody.
And in the weeks after, Musk goes scrambling to find "investors" who would backdate his Twitter lies, so to avoid SEC trouble.
This becomes known, stock crashes.
I never understood why people are so entranced by Musk.
Because he promised things we all thought were ridiculous, at the time, and has delivered in spades. I'm astounded at what he has achieved in such a short time.
What I don't get is all the idiots who absolutely hate his guts. I mean, I understand that some humans have an innate desire to despise anyone who is doing well ... but I don't understand WHY that desire exists.
define "better"
I've test-driven a Model S. I didn't buy it, I bought a BMW instead. But there was a lot that I liked, and while I thought it was overpriced by maybe 20k, it wasn't junk and the only reason that it's niche is the price.
Chinese cars, on the other hand, have in general failed so hard on any serious quality tests in the west that it is very clear they are still in the early steps of understanding how to build a proper car at all. I'm sure they will get there in about a decade, but I can't hold my breath that long.
Assorted stuff I do sometimes: Lemuria.org
Because they're ridiculously expensive and impractical.
This is what I was saying about electric cars back in 2008, and about the idea of reusable rockets back in 2010. I underestimated him twice; unlike people like you, I learn from my mistakes.