Tesla bears endure document short-sale loss in 2020: S3 Companions

© Reuters. FILE PHOTO: People walk in front of the NYSE in New York

By Chuck Mikolajczak

NEW YORK (Reuters) – Short bets on Tesla (NASDAQ:) Inc were the most unprofitable trade in 2020, as the electric automaker saw its shares surge over 740% en route to becoming the world’s most valuable automaker.

In a note to clients, Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said mark-to-market short losses for Tesla totaled over $40 billion, as it was “far and away the most unprofitable trade in 2020 and had the largest yearly loss we have seen historically.”

Overall, shorts were down $245 billion, net of financing, in 2020 as the and Nasdaq rallied back from pandemic selling early in the year to near record highs as 2020 was closed out.

Investors who sell securities “short” borrow shares and then sell them, expecting the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference.

Dusaniwsky noted that most of the most unprofitable shorts of 2020 were technology or “stay at home” plays due to the COVID-19 pandemic. Apple Inc (NASDAQ:) was the next most unprofitable short play at about $6.7 billion in losses.

Rounding out the top five were Amazon.com Inc (NASDAQ:) at $5.8 billion, U.S. listed shares of Pinduoduo (NASDAQ:) Inc at $4.8 billion and Square Inc (NYSE:) at $4.7 billion.

On the flip side, there were only five short positions that drew over $1 billion in mark-to-market profits, according to S3. The top short play was Exxon Mobil Corp (NYSE:) as the oil major slumped more than 40% in 2020 in large part due to a plunge in oil prices caused mainly by a lack of demand during the pandemic.

Only four other short positions topped over $1 billion according to S3 – AT&T Inc (NYSE:), Raytheon (NYSE:) Co, which was acquired by United Technologies in April to become Raytheon Technologies (NYSE:) Corp, U.S.-listed shares of Luckin Coffee (OTC:) Inc and Wells Fargo (NYSE:) & Co.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Comments are closed.