Tesla shorts take $3.5B hit after post-earnings rally: report

As EV maker Tesla (NASDAQ:TSLA) posted its second-biggest one-day rally thanks to its better-than-expected Q3 earnings, short sellers betting against the company took $3.5B in paper losses, Bloomberg News reported, citing data from S3 Partners.

On Thursday, the Elon Musk-led company added more than $150B in market value, recording its biggest intraday gain in over a decade, as Wall Street welcomed one of its best earnings reports in years.

However, short sellers, who typically profit when stocks fall, had the opposite effect. Their estimated mark-to-market losses climbed to $3.5B by the end of the day, erasing the entire $1.7B profit made on TSLA stock during 2024.

TSLA short sellers are now down $1.8B for the year after the company shares bounced back with a nearly 22% gain on Thursday, ending four back-to-back sessions of losses.

Tesla (NASDAQ:TSLA), historically one of the most shorted names in the hedge fund space, has also seen its fortunes reverse after the rally. Compared to 3.5% in July, only about 2.9% of TSLA’s free float remains shorted currently, close to what S3 Partners identified as “historic lows” for the company.