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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.
What Musk did over Twitter is first and foremost unbecoming of a CEO and is outright manipulation of the stock price.
In your opinion.
That's the problem with all the Tesla news nowadays - there's actually very little going on, what we see in the media is opinion dressed up as news. And if it's bad, the shorts will run with it.
(source)
Really, there's nothing in the news anyone can trust about Tesla nowadays. After the NYT interview I saw these competing headlines:
"Musk says Tesla had an excruciating year, and the worst is yet to come" (one source, among many)
"Musk says Tesla had an excruciating year, and the worst is over" (one source, among many)
Which of these is an accurate portrayal of Tesla's future?
Don't believe any of it. Given the timeline above, it's really hard to see how Musk could be charged with a crime - SEC is civil, not criminal, the FBI would have to get involved for that. It's also hard to see how the SEC could impose a fine. There *might* be an issue with the exact definition of "secured", but it's a) moot, b) can be argued either way, and c) it took the SEC 5 years to bring down [Theranos CEO] Elisabeth Holmes for much more severe problems, they aren't likely to move any faster with Tesla. Five years from now we can worry whether this has made any difference to Tesla.
It's clear that Tesla only has to weather the next 4 months or so, and then be clear of all this nonsense.
Until then, just ignore the rabble - it's only noise anyway.
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.
both the short sellers and the flip speculators for their contribution to improving society. If enough people dedicate their lives to short term stock market speculation, most of the world's pressing problems will soon be a thing of the past.
It's clear that he didn't have a buyer to bring the firm public.
Doesn't need one. The company is already public.
When Elon Tweeted it was in the 340's, it is now 303.
He's not just "shooting military and communication satellites to LEO". He's doing that in such a way that it is breaking up the entrenched, fossilized existing launch providers, most notably ULA, Arianespace, and the Russians. That by itself is a service to the world. His other grandiose plans, it is too early to judge. Tesla, whether it survives or not, seems to have at least set an expectation for EVs and the infrastructure to support them which is pushing the other automakers to compete, and not just build bigger and bigger pickup trucks which cost more than a loaded up Tesla Model 3.
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.
Do you really not get why people hate his guts?
No.
He says he's going to replace airplanes with rockets.
He says he's going to move people in pneumatic tubes.
He also says he's going to dig hundreds of non-pneumatic tubes under Los Angeles, and move people in their own cars, on sleds in said tunnels.
He sold a flamethrower, because he thought it would be "cool".
There's probably more of these.
I'm more confused than ever. I would classify all of those things as "cool!" and then follow it up with "make it happen!". Why in the world would any of those things make you hate him?
Didn't he make Paypal evil?
That's true. I'm kinda tired of having to call in a catholic priest every time I pay for something online. Demonic possession is a big downside.
Was making 80K to 120K cars till 2014.
Is making 50K electric cars now.
He will make 35K electric car next year
He promises 1000. Delivers 900. Everyone focuses on falling short of the target by 100. While forgeting that 900 is 900 above what every one said is impossible.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Given that TSLA is only about 15% off it's all time high, the vast majority of shorts are still losing money right now. It's not like all those shorts shorted within 10% of it's all time high.
Funny how the short sellers all hide.
I'm here with my name (trivial to link to my real-life identity even, if you are not an idiot with a search engine) and I own those Tesla stocks that you sold. And I'm holding them still and will hold them in a year, just like I did a year ago or two years ago when people were doing the same dances.
Because Tesla is hands down leader in its market, Elon Musk or not. I love idiots like you who focus on the star CEO and don't understand that half of a leaders job is to take the shit so people under him can calmly work without the interference. And what I see coming out of the company I like. There are growing pains, but as long as they are growing pains, I'm fine.
You can continue selling short, I don't care much. You can also invest in some AAA rated company that is closing factories and firing people and cutting markets and for some reason people think that leads to being more profitable (it doesn't, it just leads to a higher profit-to-equity ratio which is a KPI for analysts who think only in numbers).
At the same time, I'm driving a BMW and not a Model S because there is a lot that the guys at Tesla still need to learn about good interior design, but from what I've read (only test-driven a Model S, so I can't say myself), the Model X and Model 3 are already much better in that regard.
Assorted stuff I do sometimes: Lemuria.org
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
But let me ask you a question: why DO YOU CARE that the "entrenched, fossilized launch services" exist? Does it affect you in any way that the military or communication companies save a bit on money on a launch?
It's not just military and communication. Highly capable and cheap launch vehicles are perhaps the most important step on the path to cheaper and more capable scientific probes and space-based telescopes, since they will allow for greater capabilities simultaneously with lesser engineering effort. I.e., they would cheapen both the launches and the payload designs. For people interested in natural sciences, this is a rather tempting prospect, since the funding of scientific missions isn't unlimited.
Ezekiel 23:20
The diver was instrumental to the entire rescue effort
Nothing if the sort. He did no diving. At best he provided the authorities with the names of some British divers who could help. That's great and all, but "instrumental" is an idiotic overstatement of his contribution.
while your favorite flamethrower beach boy decided to show up uninvited and wanted to shove a fucking metal tube into a narrow cave despite being told by the rescue chief in charge that it wouldnâ(TM)t work.
This is, of course, more bullshit. He was encouraged to build the submarine by Richard Stanton; one of the two divers who were the first to reach the boys. You know, a guy who actually WAS instrumental to the rescue effort.
Get fucked, you bloody fanatic.
I do, on a fairly regular basis. Judging by your rabid frustration, I suspect you can't day the same.
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.