Tesla Shorts to Amass First-Ever $20 Billion Bet Against a Stock
Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., listens during a discussion in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Tesla Shorts to Amass First-Ever $20 Billion Bet Against a Stock

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Tesla Inc.’s skeptics are undeterred by Elon Musk poking fun at them over the carmaker’s stock surge, with the amount of shares being sold short heading for a milestone.

The Model 3 maker’s stock is poised to be the first to hit a short-interest level of $20 billion, according to research firm S3 Partners. The value of shares that have been sold short has climbed recently to $19.95 billion.

S3 said in a report Thursday that both Tesla and Nikola Corp. shares look like candidates for a short squeeze, referring to when short sellers are forced by a stock’s gain to close their position, which in turn drives the price even higher.

Tesla’s squeeze is more obvious -- its 233% gain this year likely is forcing out short sellers who’ve hit their limit for losses. The potential for a squeeze in Nikola, which is developing fuel-cell and battery-electric semi trucks, has more to do with high borrowing fees, S3 said.

©2020 Bloomberg L.P.

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