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.
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.
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.
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.
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.