DThis stock market story may not be that old, but it is actually a classic: the “short sellers” of Tesla shares, who are counting on the share price falling and have not yet given up in frustration. They continue to exist and the small group has recently expanded again. Because now the Briton Fraser Perring also holds short positions on Tesla. Others, however, have thrown in the towel.
The most famous towel thrower is probably Michael Burry. His work in the wake of the American real estate crisis and his big bets on the collapse of the American housing market were dealt with in the Hollywood film “The Big Short”. As the “Financial Times” reported, his investment company Scion Asset Management liquidated the short position on the Californian electric car manufacturer that had only been built up in May 2021 in October of the previous year.
Many short sellers have failed
Short seller Fraser Perring, on the other hand, explained in an interview with this newspaper why his company Viceroy Research remains firmly short in the case of Tesla (https://www.faz.net/aktuell/finanzen/finanzmarkt/shortseller-fraser-perring-wettet-gegen -tesla-bafin-ist-informed-17732032.html) He particularly emphasizes the growing competitive pressure, since every car manufacturer would now produce electric vehicles and Tesla’s market share would decrease. He also refers to the lack of quality in the cars and the high rating.
Christoph Scherbaum
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Image: Christoph Scherbaum
These criticisms are not particularly new or original. They’ve been put forward by short sellers many times in the past – these investors just got their fingers burned on a regular basis. Accordingly, the short positions have also decreased significantly in the past year. They were just 2.75 percent of free float at the end of December 2021, according to Morningstar data. Interestingly, however, Tesla stock remains one of the most shorted stocks in terms of market cap. The value of the shorted shares would currently add up to more than 22 billion US dollars. However, this is mainly due to the fact that the price of Tesla shares has increased by almost 50 percent in the past year and the group has broken the mark of 1 trillion US dollars with its market value.
Elon Musk and the tactical media presence
An important reason why the Tesla short sellers have always fallen flat on their faces is CEO Elon Musk. His media presence, especially on the short message service Twitter, ensures enough hype moments about the electric car manufacturer. Opinions differ on him. He is celebrated by some as a tech visionary who, with his ideas, should lead humanity into an era of zero-emission mobility – especially since he knows very well how to spark euphoria with some ambitious forecasts for his company. The fact that most of the forecasts issued are only realized with some delay has so far played only a minor role. This in turn is one of the criticisms of the Tesla skeptics.
One of the particularly ambitious goals is the forecast made by Musk in a tweet at the end of September 2020 of wanting to deliver 20 million cars to customers annually by 2030. The million mark could fall in 2022, after 936,172 cars of the higher-priced “S” and “X” models and the cheaper vehicle models “3” and “Y” were handed over to customers last year. Compared to 2020, this meant an increase of 87 percent, exceeding market expectations.