Even This Month’s Tech Rout Can’t Hold Tesla Back As Short Sellers Capitulate

Even This Month’s Tech Rout Can’t Hold Tesla Back As Short Sellers Capitulate
Andrew Rummer

over 2 years ago1 min

Mentioned in story

Even as US-listed tech stocks suffer a month to forget, Tesla shares are closing in on their all-time high and forcing short sellers to capitulate. 

For most of its 11 years as a public company, the automaker has attracted a large number of people willing to bet against its shares. As the chart above shows, Tesla’s short interest – the proportion of freely traded shares on loan to short sellers so they can bet the stock price will fall – has averaged 29% since its 2010 initial public offering. That same short interest has now fallen to a record low of just 3.3%. 

Short sellers have been forced to abandon their bets against Tesla after its stock jumped more than 700% in 2020 and continued to climb. Even the past month’s sell-off in tech stocks, which has seen the NYSE FANG+ Index slide more than 8%, can’t currently hold Tesla back.

In the NYSE FANG+ Index, only Tesla and Netflix are in the green over the past month
In the NYSE FANG+ Index, only Tesla and Netflix are in the green over the past month

Tesla’s rally to $782 a share – and a market value of nearly $800 billion – is no doubt impressive. But with so few short sellers left, any future gains might have to come from profits catching up with investors’ lofty expectations rather than bears throwing in the towel.

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