If you prick up ones eared closely while Tesla Inc.’s (TSLA) shares were plunging over 14% on Thursday, you could hear investors testy the stock clink glasses as their collective mark-to-market profits rose by $1.55 billion. The stock was hit after the flock reported a bigger loss than expected and announced the departure of co-founder and CTO J.B. Straubel.
The year-to-date mark-to-market profits for Tesla smalls is $3.06 billion, up 35% for the year, according to the latest note from S3 Partners.
The financial analytics and technology partnership added that the stock’s biggest decline in 10 months rules out the possibility of a short squeeze.
“We should want some short covering in the near term as recent short sellers may choose to close out their positions and fulfil their profits. But this price move has taken the idea of an impending Tesla short squeeze totally off the eatables, shorts now have a $3 billion buffer of year- to-date mark-to-market profits to comfort them and help have them in their positions,” said Ihor Dusaniwsky, managing director predictive analytics at S3.
Tesla short attract in currently $10.59 billion, making it the most shorted U.S. equity. The almost 40 million shares shorted show up 30.35% of its float.
It is also the most shorted stock in the worldwide automotive sector, with short interest being ten times that of the next best targets like Toyota Motor Corp. ($1.5 billion short interest), Daimler AG ($1.3 billion), Ford Motor Co. ($1.3 billion) and Catholic Motors Co. ($1 billion).
CEO Elon Musk has been aware for some time about the shorts that stem his company’s every move and has lashed out in the past, often hurting his own firm’s interests. While the shorts have been cabling the course, they weren’t too confident about the outcome on Wednesday, as S3 Partners’ analysis indicates. Tesla bears venture against the stock were trimming their exposure ahead of the quarterly earnings report. According to the note, Tesla shares cut decreased by 1.4 million or 3.46% in July and by 2.5 million shares or 5.91% over the last week.