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Tesla (TSLA) shorts have lost $2 billion in June as stock continues rise

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It is currently not a good time to be Tesla (NASDAQ:TSLA) short-seller. According to financial analytics firm S3 Partners, Tesla shorts have been hit by more than $2 billion in mark-to-market losses so far this June, as the electric car and energy company rides a wave of optimism in the weeks leading up to the end of Q2 2018.

Tesla stock has risen 20.5% so far in June, making the Elon Musk-led company on pace to hit its biggest monthly gain since August 2014. This sudden boost in the company’s stock has managed to hit short-sellers hard. After Tesla’s 2018 Annual Shareholder Meeting, shares rose 9.7%, and shorts lost $1.1 billion in a single day.  Just this past Monday, shorts lost another $549 million in mark-to-market losses, and as of Tuesday afternoon, bears were down an additional $278 million.

According to S3 Partners head of research Ihor Dusaniwsky, the massive losses incurred by Tesla short-sellers so far this month has made the electric car and energy company the worst-performing stock for short-sellers this year. In a statement to Reuters, Dusaniwsky noted that the recent blows received by Tesla shorts are among the biggest losses he has seen to date.

“In all of 2017, they (short-sellers) were down $3.4 billion. To lose $2 billion in a month stands out as one of the biggest losses for a stock that I have seen,” the S3 Partners head of research said.

Tesla shorts could have lost far more, however. During Tuesday’s intraday, Tesla shares rose by as much as 6.9% to a 3-month high of $354.97, before settling down to a 3.21% gain at $342.77 per share amidst news of the company’s restructuring efforts that cost 9% of its employees. By Wednesday’s pre-market, however, Tesla shares appear to have recovered, rising 1.38% and trading at 347.50 per share.

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Tesla remains as one of the most-shorted stocks in the market today, with short interest currently standing at $12.6 billion. That’s 37.9 million shares, or almost 30 percent of the share float sold short. Despite the recent losses incurred by Tesla short-sellers, however, Dusaniwsky noted that Tesla bulls’ anticipated “short squeeze” has not even started yet. A short squeeze happens when shares of heavily shorted companies such as Tesla rise as traders rush to buy stock to cover their short bets. This has not happened to date.

“With almost 80 million shares traded in June, this slight short covering did not move Tesla’s stock price. This is the biggest cry wolf on Wall Street – everyone says short squeeze, and it never is. They will be right one day, but not today,” Dusaniwsky said.

After Tesla’s successful 2018 Annual Shareholder Meeting, the Elon Musk-led company’s stock has seen a meteoric rise. Earlier this week, Berenberg raised its price target for Tesla to $500 per share, citing the company’s tech advantage and the Model 3’s positive gross margins. KeyBanc Capital Markets also sent out a note to clients on Monday, stating that Tesla could possibly deliver as many as 30,000 Model 3 for the second quarter.

As of writing, Tesla stock is trading up 1.38% at 347.50 per share on Wednesday’s pre-market.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla investors will be shocked by Jim Cramer’s latest assessment

Jim Cramer is now speaking positively about Tesla, especially in terms of its Robotaxi performance and its perception as a company.

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Credit: CNBC Television/YouTube

Tesla investors will be shocked by analyst Jim Cramer’s latest assessment of the company.

When it comes to Tesla analysts, many of them are consistent. The bulls usually stay the bulls, and the bears usually stay the bears. The notable analysts on each side are Dan Ives and Adam Jonas for the bulls, and Gordon Johnson for the bears.

Jim Cramer is one analyst who does not necessarily fit this mold. Cramer, who hosts CNBC’s Mad Money, has switched his opinion on Tesla stock (NASDAQ: TSLA) many times.

He has been bullish, like he was when he said the stock was a “sleeping giant” two years ago, and he has been bearish, like he was when he said there was “nothing magnificent” about the company just a few months ago.

Now, he is back to being a bull.

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Cramer’s comments were related to two key points: how NVIDIA CEO Jensen Huang describes Tesla after working closely with the Company through their transactions, and how it is not a car company, as well as the recent launch of the Robotaxi fleet.

Jensen Huang’s Tesla Narrative

Cramer says that the narrative on quarterly and annual deliveries is overblown, and those who continue to worry about Tesla’s performance on that metric are misled.

“It’s not a car company,” he said.

He went on to say that people like Huang speak highly of Tesla, and that should be enough to deter any true skepticism:

“I believe what Musk says cause Musk is working with Jensen and Jensen’s telling me what’s happening on the other side is pretty amazing.”

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Tesla self-driving development gets huge compliment from NVIDIA CEO

Robotaxi Launch

Many media outlets are being extremely negative regarding the early rollout of Tesla’s Robotaxi platform in Austin, Texas.

There have been a handful of small issues, but nothing significant. Cramer says that humans make mistakes in vehicles too, yet, when Tesla’s test phase of the Robotaxi does it, it’s front page news and needs to be magnified.

He said:

“Look, I mean, drivers make mistakes all the time. Why should we hold Tesla to a standard where there can be no mistakes?”

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It’s refreshing to hear Cramer speak logically about the Robotaxi fleet, as Tesla has taken every measure to ensure there are no mishaps. There are safety monitors in the passenger seat, and the area of travel is limited, confined to a small number of people.

Tesla is still improving and hopes to remove teleoperators and safety monitors slowly, as CEO Elon Musk said more freedom could be granted within one or two months.

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Investor's Corner

Tesla gets $475 price target from Benchmark amid initial Robotaxi rollout

Tesla’s limited rollout of its Robotaxi service in Austin is already catching the eye of Wall Street.

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Credit: Tesla

Venture capital firm Benchmark recently reiterated its “Buy” rating and raised its price target on Tesla stock (NASDAQ: TSLA) from $350 to $475 per share, citing the company’s initial Robotaxi service deployment as a sign of future growth potential.

Benchmark analyst Mickey Legg praised the Robotaxi service pilot’s “controlled and safety-first approach,” adding that it could help Tesla earn the trust of regulators and the general public.

Confidence in camera-based autonomy

Legg reiterated Benchmark’s belief in Tesla’s vision-only approach to autonomous driving. “We are a believer in Tesla’s camera-focused approach that is not only cost effective but also scalable,” he noted. 

The analyst contrasted Tesla’s simple setup with the more expensive hardware stacks used by competitors like Waymo, which use various sophisticated sensors that hike up costs, as noted in an Investing.com report. Compared to Tesla’s Model Y Robotaxis, Waymo’s self-driving cars are significantly more expensive.

He also pointed to upcoming Texas regulations set to take effect in September, suggesting they could help create a regulatory framework favorable to autonomous services in other cities.

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“New regulations for autonomous vehicles are set to go into place on Sept. 1 in TX that we believe will further help win trust and pave the way for expansion to additional cities,” the analyst wrote.

https://twitter.com/herbertong/status/1938287117441855616?s=10

Tesla as a robotics powerhouse

Beyond robotaxis, Legg sees Tesla evolving beyond its roots as an electric vehicle maker. He noted that Tesla’s humanoid robot, Optimus, could be a long-term growth driver alongside new vehicle programs and other future initiatives.

“In our view, the company is undergoing an evolution from a trailblazing vehicle OEM to a high-tech automation and robotics company with unmatched domestic manufacturing scale,” he wrote.

Benchmark noted that Tesla stock had rebounded over 50% from its April lows, driven in part by easing tariff concerns and growing momentum around autonomy. With its initial Robotaxi rollout now underway, the firm has returned to its previous $475 per share target and reaffirmed TSLA as a Benchmark Top Pick for 2025.

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Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake

A Swedish pension fund is offloading its Tesla holdings for good.

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tesla
(Credit: Tesla)

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.

The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.

Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.

However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:

“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”

Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.

Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

tesla employee

(Photo: Tesla)

There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.

Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.

AP7 did not list any of the current labor violations that it cited as its reason for

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