Short sellers are waiting to make more than a billion dollars profit since Elon Musk gave a tweet about his intention to turn Tesla into a private company.
While Musk introduced a purchase plan on 7 August, the ability of short sellers to attack the company & # 39; to narrow, closed less than 4 percent of the short positions since the publication of that tweet.
While the actions of the electric car manufacturer initially increased, they quickly changed course and at the end of Friday, the operations were 19 percent lower than for the tweet. The market value of short positions rose to 1.2 billion dollars in that period, according to S3 Partners, a financial analysis company.
Tesla's actions became a battlefield between short sellers and people who believe in Musk's vision of reconfiguring automobiles and energy. According to S3, $ 11,200 million in shares, or more than a quarter of the floating capital of the company, is allocated to investors who bet that the price of the shares will be reduced, making it the company with the largest short position in the US market.
On a global scale, only Alibaba, the Chinese e-commerce group with US certificates active on the New York Stock Exchange, and Ping An Insurance, which is listed in Hong Kong, have attracted more interest in short sellers.
S3 said that several short sellers have raised their bets that the price of Tesla shares will fall, suggesting that they are still not convinced of Musk's ambition to buy their stake from some current shareholders at a price of 420 dollar per share.
Over the past ten days, doubts have arisen about Musk's claim that he "secured" the funding for the plan, leaving Tesla and his executive director in view of shareholders' demands and an investigation by the Stock Exchange Commission and US Securities (SEC, for its abbreviation in English).
Crispin Odey, a leading hedge fund manager in the UK and betting against Tesla, referred last week in a letter to investors the recent behavior of Musk to that of Donald Crowhurst, an amateur sailor who performed in 1968 a solo journey through the world but never returned.
"It was difficult to stick to short positions like Tesla's," wrote Odey in the letter, Bloomberg said. "However, it feels like Tesla is entering the final phase of his life."
Musk spent a lot of time, energy and Twitter messages that were pronounced against short sellers. He accused them of being saboteurs who "want the company to die" and in June he warned that their positions would soon "explode".
Investors and analysts encouraged Musk to spend less time conducting a fight on Twitter and concentrating on his business.
"As long as Tesla keeps its promises and continues to build great cars as a good company, the noise from short sellers will be that alone, if Tesla fails and does not keep its promises or reduces quality, sellers will be in shorts. justified, "said Gene Munster, a stock analyst who is now an investor in the technology sector and has no shares in Tesla.