Tesla Is The Most Shorted Automotive Stock, And It's Not Even Close

Tesla Is The Most Shorted Automotive Stock, And It's Not Even Close

Tesla’s stock has been a wild ride of ups and downs over the last twelve months, seeing a high value of just over $300 per share last September to a low value of $108.10 per share in January. Things have rebounded for the electric automaker with shares currently trading hands at $262.80. With little more than a disappointing Cybertruck and a barely facelifted Model 3 on the horizon, and delay after delay befalling the company’s semi truck and sports car efforts, many investors are actively betting against Tesla right now.

According to a report from Barrons and short-selling research firm S3 Partners, Tesla is the number one most shorted automotive stock. Some $22 billion in Tesla shares have been borrowed by short sellers and resold. With a market cap hovering around $828 billion, that’s just around 2.7 percent of the company’s total shares, but it adds up to a huge dollar figure and gives some investors pause.

The second-most heavily shorted stock in automotivedom is Rivian, with just over $2 billion in short sales out there. For those who aren’t great at doing math, that’s just around ten times fewer shorts than Tesla. RIVN is currently trading at $22.22 per share with a market cap of $21.05 billion, so the issue here is that a much greater percentage of Rivian’s stock has been shorted. Ford, likewise, sees around $1.9 billion worth of its stock borrowed and sold by the bears. Ford’s stock F is currently worth $12.32 per share with a cap of $49.29 billion. Again the dollar value of the shorted stocks is much less than Tesla’s, but Ford has a higher percentage of its shares shorted.

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Shorting Tesla is seen today as largely a good idea, as the company’s shares currently sell for about 58 times estimated earnings for the 2024 fiscal year. That’s not a healthy holding position for many investors to keep, and the shorts are looking to make a healthy profit as soon as Tesla tumbles into another of its frequent dips. Maybe after the CEO says something unhinged, for example.

High valuations — relative to other companies in the same industry — are typically seen as the stomping grounds of bearish investors. Is there a reason Tesla is ascribed a value of around seventeen Fords, despite being on track to sell just over one million cars this year?

By percentage of market cap Tesla is only slightly higher than average when it comes to short positions. Fisker’s short position is about 43 percent of its market cap, while Lucid’s is 23 percent and Nikola’s is 21 percent.