Zinger Key Points
- Tesla short sellers generated more than $15.7 billion in profits in 2022.
- Tesla shares declined 65% on the year.
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Tesla Inc TSLA was one of the worst-performing stocks in the market in 2022, but Tesla continued to be one of the best payoffs for short sellers.
ORTEX Analytics released its monthly Short Interest Insights reported this week and said Tesla was by far the most profitable stock in the market for short sellers in 2022.
ORTEX estimated Tesla short sellers generated $15.75 billion in profits last year. Tesla's stock price dropped 65% in 2022, and the selling pressure intensified in the fourth quarter as investors feared ongoing financial fallout from Tesla CEO Elon Musk's chaotic $44-billion takeover of Twitter.
Related Link: Is Elon Musk Really Done Selling Tesla Stock? He Has Said So 4 Times In The Past Year
Musk himself contributed to the selling pressure on Tesla in November when he sold $4 billion of Tesla stock, and a continued deterioration of Twitter's business could force Musk to unload more Tesla shares down the line.
Exxon Shorts Get Burned: While Tesla was a home run trade for short sellers in 2022, short sellers took a huge hit on their bets against U.S. oil major Exxon Mobil Corp XOM.
ORTEX reported Exxon short sellers endured $1.7 billion in losses last year after Russia's invasion of Ukraine sent energy prices soaring.
Heading into 2023, ORTEX stated short sellers became increasingly bearish on the consumer staples sector, increasing their aggregate short interest in the sector by 4.2% in December. At the same time, aggregate short interest in the financials sector decreased 5.8% in the month, suggesting short sellers may fear a better-than-feared earnings season from big bank stocks.
Benzinga's Take: Tesla has long been one of the most shorted stocks, and those bearish bets have cost short sellers a lot of money prior to 2022. Tesla short sellers likely took a particular satisfaction out of their big 2022 profits given Musk's track record of publicly mocking and taunting short sellers.
Read Next: Here's How Tesla Short Seller Stanphyl Capital's Fund Performed In 2022 As EV Maker's Stock Tumbled
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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