Shulou(Shulou.com)11/24 Report--

On the morning of December 30, Beijing time, it was reported that after Tesla CEO Elon Musk (Elon Musk) became the new boss of Twitter, he and other henchmen were distracted, while investors worried that the global market demand for Tesla electric vehicles might be weak. Under various factors, Tesla's share price plummeted sharply in succession. However, such a slump makes short sellers "very happy".

According to data from S3 Partnership, the sharp drop in Tesla's share price has brought huge profits to short sellers, who have made a profit of about US $17 billion on Tesla's stock. Tesla became the most profitable short stock in 2022.

In December alone, Tesla's share price has fallen by as much as 37%, down nearly 2/3 this year, and the company's capital market capitalization has lost $670 billion.

Such a dilemma for Tesla this stock, is a U-turn. You know, Tesla used to be one of the highest-growing stocks during the COVID-19 epidemic in the world. Tesla's share price rose 740% in 2020 alone, spurred by rising demand for electric cars and low interest rates by the Federal Reserve.

These short sellers often buy a large number of Tesla shares, betting that Tesla's share price will fall, thus making huge profits. Tesla's return on shorting institutions is as high as 89 per cent this year, a rare victory for them against Mr Musk.

It is reported that at some point in 2018, about 1/3 of Tesla's total outstanding shares were held by short sellers. Well-known investors shorting Tesla include Jim Jim Chanos, David David Einhorn and Andrew Left.

The shorting and encirclement of Tesla's stock angered Musk, who vowed to let the short seller be retaliated by the market. later, Tesla's share price rose and the short seller suffered heavy losses. Musk quickly asked Tesla to make and sell underwear (priced at $69.240) and ridiculed short sellers ("underwear" and "shorting" are the same word).

Later, as Tesla's share price soared, some short sellers exited one after another. Today, only 2.9 per cent of Tesla's total outstanding shares are held by short sellers, according to S3.

'The best part of the short selling will continue until Tesla's share price creates a new bottom, 'said Ihor Dusaniwsky, an analyst at S3.

However, Wall Street analysts and investors are baffled by the question of where the bottom of Tesla's share price is. However, Tesla's share price is likely to face twists and turns, such as when the company will release electric vehicle deliveries for the fourth quarter of this year early next month, and Tesla recently offered discounts in markets such as the US and China to boost sales.

Tesla shares rose 8.1% on Thursday local time, rebounding for two days in a row. In the previous seven days, Tesla's share price plummeted 31%, but now there are signs of stabilizing the decline. The recent two days have also become a rare continuous rise in Tesla's stock for more than a month.

Recently, Adam Adam Jonas, an analyst at Morgan Stanley, an American investment bank, said in a research note that Tesla's stock price has plummeted recently, and there have been attractive opportunities for investors to take advantage of.

For Tesla stock, Jonas gave a buy rating. Taking into account the current decline in the stock price and the decline in the market value of the company as a whole, Jonas lowered Tesla's target share price. However, the analyst also stressed that Tesla will continue to expand his lead in the electric vehicle market in 2023.

Dusanisky, an analyst at the S3 company, said that although Tesla's share price showed signs of rebounding, the stock's "notoriously" unstable volatility would still exist in the future.

The analyst said that if Tesla's share price starts to rise, there will be intense short covering (short sellers buying stocks). Their aim is to lock in the short profits realized before the share price rises further. This operation will also cause the stock price to rise further.

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