- Investors made $15 billion by betting that shares of Tesla would fall this year, according to S3 Partners.
- The value of Elon Musk’s company has fallen nearly 70% from its November 2021 peak.
- Musk has refused to draw a link between Tesla’s decline and his takeover of Twitter.
Short sellers made $15 billion this year betting that Tesla shares would fall, as about $800 billion was wiped off their value, new research shows.
Analysis by S3 Partners showed that bets against Tesla shares proved the most profitable in 2022, with shorts against Amazon shares returning $6.2 billion.
S3 said interest in betting against Tesla began to wane in April when the stock began to slide, reducing potential returns, but picked up again in September as Elon Musk’s horrendous acquisition of Twitter entered its final stages.
About 3% of Tesla shares are shorted, making it the second largest US short after Apple.
One of those betting against the company is reportedly Microsoft founder Bill Gates, who Musk said earlier this year had a shortfall of up to $2 billion against Tesla.
Tesla’s value has fallen by more than $800 billion this year. The company was worth $1.24 trillion at its peak in November 2021, but shares closed Friday at $123, leaving it worth $385 billion. The stock began the year at nearly $400, which equates to a decline of around 70%.
Musk’s stake in Tesla means his fortune has fallen by $132 billion this year, according to the Bloomberg Billionaires Index, and he is no longer the world’s richest person after being overtaken by Bernard Arnault.
Tesla has not been immune to a broader market selloff amid high inflation and rising interest rates that have sent the S&P 500 down nearly a fifth this year.
But Musk has consistently refused to draw a link between his work on Twitter and Tesla’s declining fortunes, even as several high-profile investors have pleaded with him to bring attention back to the automaker.
He has instead tried to blame the Federal Reserve’s regime of rate hikes, which he claims makes all stocks – not just Tesla’s – less attractive to own.
The Twitter chief has sold $3.6 billion worth of Tesla stock this year to fund Twitter operations as he tries to shape social media in his vision.
On Thursday, Musk said he would not sell any more Tesla shares for at least 18 months.