October 3, 2022

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Bets on Tesla's cracks will drop further this year - E24

Bets on Tesla’s cracks will drop further this year – E24

Fear of interest rates weighing on tech stocks means that speculators still betting on Tesla on the stock exchange are in the red for the year so far.

Over the past year, Tesla CEO Elon Musk has moved the stock price dramatically through various Twitter messages, including when he took a vote on whether he should sell the stock.

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Tesla has long been among the stocks with the highest bet on a lower price against them through short selling, but the situation has completely changed.

Now only 2.7 percent of outstanding Tesla shares are loaned out in free-flowing short sales, where investors make money if stock prices fall and vice versa lose if they rise, down from about 20 percent at the start of 2020.

It appears in figures from the US analysis agency S3 Partners, which indicates that the short level has been declining recently.

Given Tesla’s high market capitalization, sales of the shorts are still more than $20 billion, or more than $175 billion.

Short sellers of Tesla stock have seen a massive burn-out due to the company’s massive price increase in recent years.

However, since the turn of the year, the share of electric vehicles has fallen about 15 percent and caused current short seller deals to surge by more than $140 million, or about 1.2 billion kronor, according to S3 Partners figures.

The drop in price can be explained, among other things, by the growing fear of rising interest rates, which particularly affects stocks that have big profits in the future.

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Tesla has previously been referred to as the “mother of all shorts,” and on several occasions in recent years, shorts have been used to explain price increases in electric vehicle stock.

Short squeeze is something that happens in stocks where a large percentage of investors are betting on lower prices. When these stocks rise suddenly, the value of these investments drops, and this may result in short sellers either wanting to get rid of the position or being forced to get rid of it.

This creates an abnormally large positive pressure on the stock, which often leads to a significant increase in price.

Tesla CEO Elon Musk previously took a hard line against short-term speculators in the company’s stake, noting on Twitter that he believed they would “burn themselves out”.

Among the well-known shareholders of Tesla, fund profile Cathie Wood through ARK funds, which has also fallen significantly this year due to the technological turmoil on Wall Street.

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Record number of cars delivered in 2021

Both the fourth quarter and 2021 as a whole were a record year for the electric car maker, according to numbers released earlier in January.

Tesla delivered 308,000 electric cars in the last quarter of last year.

In the third quarter of last year, the company delivered 241,300 vehicles, which until the fourth quarter was the highest number for three months.

In total, the company delivered 936,172 vehicles in 2021, up from 499,550 in 2020, an increase of 87.4 percent.

This number is much higher than Wall Street analysts’ estimates. According to Facttest, analyst estimates range from 245 thousand to 292 thousand delivered cars, according to CNBC.

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