Short Sellers Flee As Tesla Prepares For S&P 500 Debut

Published on
  • Ortex Analytics data shows the number of Tesla shares held in short positions is at a record low this year
  • Short sellers have lost $28.5bn on short bets against the company in 2020 so far
  • Ortex has previously estimated that Tesla’s entry to the S&P 500 would trigger $40bn of buy orders

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q3 2020 hedge fund letters, conferences and more

Tesla Shorts Hit A Record Low Before S&P 500 Debut

London, 21st December – The number of Tesla shares currently held in a short position has hit a record low for 2020 as traders prepare for the company to join the S&P 500.

Data provided by Ortex Analytics shows that the number of shares being shorted dropped to 31.4m in December, considerably lower than the peak of 93.6m recorded in January of this year.

Often referred to as the world’s most shorted stock, Tesla’s performance has defied its critics with short sellers losing $28.5bn on bets against the company so far this year, according to Ortex.

A Much Anticipated Debut

Commenting on the data, Peter Hillerberg, co-founder of Ortex Analytics said: “Tesla’s much anticipated entry to the S&P 500 has been closely watched by traders this year. After a number of false starts, it now looks set to happen and that will be a significant moment. Our analysis suggests that entry alone could trigger $40bn of buy orders from tracker funds.

“As a result, a large number of short sellers have closed their positions, wanting to avoid the “hype premium” that is so often associated with Elon Musk’s company. However, the battle is far from over, we expect many to be waiting on the side lines looking to pounce when the hype dies down.”