- Investors made $15 billion by betting that shares in Tesla would fall this year, per S3 Partners.
- The value of Elon Musk’s company has sunk by almost 70% from its November 2021 peak.
- Musk has refused to draw a link between Tesla’s decline and his takeover of Twitter.
Short-sellers made $15 billion this year betting that shares in Tesla would fall, as about $800 billion was wiped off its value, new research shows.
Analysis by S3 Partners showed bets against Tesla shares proved to be the most profitable of 2022, with shorts against Amazon shares making a return of $6.2 billion.
S3 said interest in betting against Tesla started falling in April as the stock began declining, reducing potential returns, but ramped up again in September as Elon Musk’s acrimonious acquisition of Twitter entered its final stages.
About 3% of Tesla shares are being shorted, making it the second-largest US short after Apple.
One of those betting against the company is reportedly Microsoft founder Bill Gates, who Musk said earlier this year had a short of up to $2 billion against Tesla.
Tesla’s value has fallen by more than $800 billion this year. The company was worth $1.24 trillion at its peak in November 2021, but shares closed on Friday at $123, leaving it worth $385 billion. The stock began the year at almost $400, which equals a decline of about 70%.
Musk’s holding in Tesla means his wealth has fallen by $132 billion this year, per the Bloomberg Billionaires Index, and he is no longer the world’s richest person after being overtaken by Bernard Arnault.
Tesla has not been immune to a wider market selloff amid high inflation and rising interest rates that has seen the S&P 500 sink by nearly a fifth this year.
But Musk has consistently refused to draw a link between his work at Twitter and Tesla’s declining fortunes, even though several high-profile investors have begged him to bring his attention back to the carmaker.
He has instead sought to blame the Federal Reserve’s regime of interest rate hikes, which he argues make all stocks — not just Tesla’s — less attractive to own.
The Twitter CEO has sold $3.6 billion worth of Tesla shares this year to fund operations at Twitter while he seeks to shape the social media site in his vision.
On Thursday, Musk said he wouldn’t sell any more Tesla stock for at least 18 months.