Short Sellers Are Down Billions Of Dollars On Tesla's Stock

Do Tesla Inc TSLA bears and short sellers know something the rest of the market doesn't? Tesla remains one of the hottest stocks to short, yet at the same time shares are higher by nearly 50 percent since the start of 2017 alone.

According to FIS Astec Analytics, Tesla is actually the hottest stock among short sellers and more than 77 percent of the available supply of Tesla's stock remains borrowed. For the time being, short sellers are on the wrong side of the trade and are losing a collective $3.7 billion this year.

Losing More Than Short Bets On Apple, Amazon, Netflix Combined

According to a Reuters report, short bets against Tesla soared from $8.7 billion at the beginning of April to $10.1 billion. But over a few short weeks, these short investors are on the wrong side of the trade to the tune of $1.4 billion.

Ihor Dusaniwsky, head of research for S3 Partners, a financial analytics firm credited with compiling some of the short data on Tesla, explained to Reuters that short sellers are betting Tesla's momentum can't continue indefinitely and are even adding to their short positions.

In fact, the cumulative loss among short sellers in Tesla's stock is greater than short bets against Apple Inc. AAPL ($1.5 billion), Amazon.com, Inc. AMZN ($1.1 billion), and Netflix, Inc. NFLX ($776 million) combined.

Meanwhile, short sellers have some support among Wall Street analysts. UBS analyst Colin Langan maintained a Sell rating and $160 price target on Tesla's stock ahead of its earnings report, scheduled to be released after Wednesday's market close.

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