Finance

Tesla stock crashes through $2,000 ceiling even as US$20 billion shares sold short

Some investors may regret betting against Elon Musk

by Charlie Smith on August 20th, 2020 at 1:02 PM
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      Selling stock "short" is not for the faint of heart.

      It occurs when investors borrows shares, sell them into the market, and then plan on buying them back later at a later day for less money.

      That's when they repay their shares, making oodles if the stock falls, as expected.

      "Short sellers bet on, and profit from, a drop in a security's price," according to Investopedia.

      But nowadays, the short sellers are being hammered when it comes to Tesla.

      MarketBeat reported last week that there were US$22.55 billion of these shares sold short.

      Today, that's down to around US$20 billion, according to short-selling expert Ihor Dusianiwksy.

      Tesla stock keeps going up. Today, it crossed the US$2,000 threshold for the very first time.

      Shares closed at US$2,001.83. on NASDAQ, a 6.6 percent rise on the day.

      That's a rise of 365 percent since the start of the year.

      If Tesla shares keep climbing, the short sellers are going to regret that moment they decided to bet against the stock.

      Last month, Tesla CEO Elon Musk started selling satin shorts on the company's website to poke fun at the short sellers.

      They were emblazoned in "radiant red satin with gold trim".

      They're selling for $69.420, a reference to Musk's famous 2018 tweet when he said he was considering taking Tesla private at $420.

      It was a joke, referring to smoking weed. But it attracted the attention of the Securities and Exchange Commission, leading him to lose his position as chairman of the company.

       

       

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