Tesla Becomes Most Profitable U.S. Short Bet as Bears Gain $2.75 Billion
Tesla Inc. Powerpacks and inverters stand at the Southern California Edison Co. Mira Loma energy storage system facility in Ontario, California. (Photographer: Patrick T. Fallon/Bloomberg)

Tesla Becomes Most Profitable U.S. Short Bet as Bears Gain $2.75 Billion

(Bloomberg) -- Tesla Inc. short-sellers have taken a decisive lead in the perennial tug-of-war between bulls and bears on Wall Street.

As the electric-car maker’s shares plunged 30% this year, the stock has become the most profitable short bet in the U.S., according to Aug. 9 data from S3 Partners. Bears have seen a whopping $2.75 billion of mark-to-market gains in 2019, according to the firm’s head of research Ihor Dusaniwsky.

It’s unlikely that short sellers’ newfound riches were what Elon Musk was envisioning during his long-running Twitter feud with skeptics. The chief executive officer took to social media several times to goad a group he’s called “value destroyers” in better times, such as when he warned them in May 2018 to prepare for the “short burn of the century.”

While Tesla shares have bounced back a bit from their lows in early June, they remain on pace for their worst annual decline on record. The downturn was precipitated by concerns about demand for the company’s vehicles and its ability to earn profits.

Short-seller gains for Tesla are more than triple this year’s second-most profitable bearish bet, drugmaker AbbVie Inc., which returned about $776 million. DuPont de Nemours Inc. was third, handing bears $631 million in mark-to-market gains.

Most Profitable Shorts YTDAvg. Short InterestNet Profit in Dollars
TSLA$8,797,580,733$2,745,431,489
ABBV$2,060,310,975$775,723,136
DD$814,644,073$631,202,422
KSS$1,561,952,240$541,330,967
BIDU$1,089,968,739$521,598,005
CTL$1,280,615,241$455,833,063
PFE$3,061,433,666$454,493,147
TWOU$498,116,773$414,361,191
JWN$889,537,233$402,044,252
OXY$1,333,086,333$401,345,938

Wondering about the worst-performing shorts? Surprisingly, one of the costliest bearish bets in the market this year, Beyond Meat Inc., is not on the top 10 list. Short-sellers got a boost after a surprise secondary offering last month sent the stock plunging. Beyond Meat is trading roughly 30% below its late July peak.

Depository receipts for Alibaba Group Holding Ltd. have yielded the largest loss for bears so far, reaching nearly $3 billion. That’s followed by Apple Inc. and Advanced Micro Devices Inc., which despite the trade war tumult, have been difficult to bet against.

The S&P 500 Information Technology Index, which includes half of the names in this list, has gained 28% in 2019 so far.

Least Profitable Shorts YTDAvg. Short InterestLoss in Dollars
BABA$16,543,430,055($2,995,756,825)
AAPL$9,781,335,483($2,675,903,296)
AMD$3,096,178,966($1,904,395,432)
MSFT$5,669,244,295($1,678,575,595)
AMZN$6,730,922,463($1,464,914,094)
SHOP$1,414,482,790($1,374,922,393)
V$4,489,846,832($1,338,763,361)
FB$4,048,279,519($1,303,996,878)
SNAP$1,111,659,426($1,236,951,555)
FISV$3,513,654,159($1,175,033,812)

©2019 Bloomberg L.P.

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