Although Tesla’s (NASDAQ: TSLA) stock has been dominated by bearish sentiments, not all investors have been impacted—some have leveraged the opportunity to rake in billions.
Specifically, while long-term holders mostly remain in the red, short sellers have been profiting, cashing in a massive $16.2 billion since TSLA’s peak on December 17, 2024, according to data from the Financial Times.
Tesla’s stock initially rallied in line with post-election momentum, thanks to the close ties between CEO Elon Musk and President Donald Trump, but it has since wiped out most of these gains.
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Since its December peak, the stock has plunged by over 50%, with its market capitalization dropping by $700 billion. The performance has also taken a toll on Musk’s fortune, which has declined by over $100 billion.
It’s worth noting that short selling is a strategy where traders bet against a stock by borrowing shares and selling them at the current price, hoping to repurchase them later at a lower price.
If the stock price drops, they can repurchase the shares for less, return them to the lender, and pocket the difference.
Short interest in Tesla has surged 16.3% in the past month, with 71.5 million shares—about 2.6% of the company’s outstanding stock—currently being shorted.
Tesla stock price headwinds
Tesla’s headwinds stem from several factors, including a backlash against Musk over his political views, which have impacted sales in key regions such as Europe.
Additionally, the company’s status as a pioneering electric vehicle (EV) maker is threatened by increasing competition, particularly from China’s BYD, which is eating into Tesla’s traditional market.
At the same time, Tesla is also a major casualty of President Trump’s controversial tariffs, with the automaker caught in the middle of retaliatory measures. Notably, after Trump imposed tariffs on Canada, the U.S.’s northern neighbor threatened to impose 100% tariffs on Tesla.
Amid these weak fundamentals, Finbold research indicates that global interest in selling Tesla stock has hit a one-year-high, with Canada leading the trend.
Tesla price analysis
Ahead of market opening on March 18, Tesla is extending its weakness, down 3.6% to $229 in pre-market trading. At the close of the last trading session, TSLA stock was valued at $238.01, down 37% year-to-date.
Indeed, the current pre-market losses can be attributed to investor reaction to Wall Street’s latest price target cut. Notably, on March 18, RBC Capital’s Tom Narayan reiterated an ‘Outperform’ rating on Tesla despite lowering the price target from $440 to $320. Although the cut is significant, the new target remains 36% higher than Tesla’s valuation at press time.
On the other hand, investment strategist Shay Baloor, as reported by Finbold, believes the market has “misjudged” Tesla. He argued that Tesla is more than an EV company; it’s an emerging AI and autonomy leader, with its full potential expected to unfold by 2026.
Featured image via Shutterstock
