Short-sellers have made $8.2 billion betting against Tesla this year as tech stocks tumbled, according to new data. Investors racked up $62.5 billion betting against Nasdaq 100 companies in general, Ortex research found. It’s a turnaround for short-sellers, who were burned by the surge in Tesla among others in 2020 and 2021. Loading Something is loading.
Short-sellers have made around $8.2 billion betting against Elon Musk’s Tesla in 2022 so far, after years of bruising losses when the electric-vehicle maker’s stock confounded expectations.
They’ve also reaped rewards from this year’s market sell-off more generally, making $62.5 billion in realized and unrealized gains on stocks in the tech-heavy Nasdaq 100 index. That’s according to figures shared with Insider by data provider Ortex.
Stock markets have tumbled in 2022 as inflation has soared and central banks have hiked interest rates, while Russia’s invasion of Ukraine has added to the volatility .
Technology stocks — which soared on the back of coronavirus-era stimulus — have been hit particularly hard. The Nasdaq 100 index had fallen 22% as of Friday’s close, while Tesla was down around 28%.
The drop has provided opportunities for short-sellers — investors who bet against companies by selling borrowed shares, before buying them back later and pocketing the difference between the prices. Many investors also short stocks to limit the risk in their portfolio.
Besides the profit on Tesla, short-sellers made $3.8 billion betting against Amazon; $3.7 billion on Facebook; and $3.5 billion on Apple, according to the Ortex data.
The data was correct as of Thursday’s close, and covers both realized and unrealized gains. Tesla jumped 7.3% on Friday as the Nasdaq 100 rose 3.3%, likely eroding short-sellers’ profits somewhat.
“There’s more interest in shorting in this market because it pays now for the first time in a long time,” Ben Laidler, strategist at trading platform eToro, told Insider.
However, Laidler said a multiyear bull market had led investors to dramatically reduce their bets against stocks. “All the indicators I look at say those numbers are still very low,” he said.
Tesla has tumbled this year as investors have balked at the high share prices of technology companies, as rising bond yields made more-expensive names look less attractive.
The EV company was once heavily shorted, but investors have gone off the bet over the last two years as the stock has massively outstripped analysts’ expectations. Tesla’s price has shot up more than 1,000% over the last five years, making Musk the world’s richest person.
Short interest in Tesla — the amount of stocks sold short — has fallen to around 3% from roughly 20% in early 2020.
Read more: Morgan Stanley’s Mike Wilson says the S&P 500 will fall by another 14% into a bear market. He recommends buying these 15 stocks to weather the plunge and outperform peers when the bull returns.
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