People are not betting against Tesla (TSLA) anymore, short interest at all-time low

Tesla (TSLA) was once the most shorted stock in the NASDAQ as people were heavily betting against the electric automaker, but now it looks like most of them have given up as the short interest on Tesla hits an all-time low.

CEO Elon Musk has often warned people not to bet against Tesla on the stock market. He went as far as predicting a “‘next level short burn of the century,” and it sort of happened last year.

Tesla’s stock went on a massive run and people shorting the stock have cumulatively lost tens of billions of dollars.

Over the years, Tesla has been the target of some high-profile short-sellers like Jim Chanos, who made his name on shorting Enron, and David Einhorn, who made his name shorting Lehman Brothers before its 2008 collapse.

They have lost millions on their bets against Tesla, but until recently, they seemed to be holding on.

Now it appears to have changed, as the short interest on Tesla’s stock has crumbled to an all-time low.

Bloomberg reports:

“The percentage of stock borrowed by traders, a standard measure of short interest, has slumped to 1.1% of Tesla’s shares available for trading, according to IHS Markit Ltd. as of last Thursday. That’s the lowest since 2010, when the carmaker went public.”

This means that the amount of money being bet against Tesla, relative to the value of the company, is at all-time low.

It’s a massive change since up to 20% of Tesla’s entire float was shorted at some point last year – when it was the most shorted stock on the market – but the short percentage steadily fell over the last 12 months.

The latest drop happens as Tesla has managed to consistently increase deliveries every quarter this year and just reported its delivery numbers for Q3 2021 on Saturday – confirming a new delivery record of 241,300 electric vehicles.

Electrek’s Take

This is an interesting change. The fight between Tesla investors and shorts has been a big part of the company’s story, but investors have been winning most of the battles.

Now, have they won the war?

It looks like it for now, but of course, the shorts could always come back for another round.

It’s also worth noting that Tesla investors have benefited from the shorts as a result of short squeezes when the stock went up and short fees with them.

With the number of shares being shorted right now, TSLA investors can’t count on a short squeeze anymore.