The so-called shorts – people who speculate on the decline of stocks – are having a great day right now. So far, they have made over $100 billion on Tesla's decline.
The so-called shorts have recently made significant – even enormous – gains on the decline in Tesla shares.
According to American media such as the Financial Times, the biggest shorts – those willing to put a lot of money at risk – have raised over 100 billion kroner on the decline in Tesla shares.
To go short is to borrow a share. The value of the share must be repaid to the person you borrow the share from at some point. But if the value has since fallen, it is the shorter who profits from it.
Tesla stock has been under pressure and has experienced a significant decline in the stock market. A decline that has now lasted 9 weeks in a row.
The Financial Times writes that large short sellers at the largest hedge funds have scored over 100 billion Danish kroner on the decline.
After several years of decline, the downturn is now paying off
A decline that really began to pick up speed on December 17th of last year, and since then Tesla's share value has fallen by more than 4,700 billion kroner. At least on paper.
Per Lekander, managing partner at the hedge fund Clean Energy Transition, does not hide from the Financial Times what he believes is the explanation: namely, Elon Musk's actions and laziness.
– Tesla had a very strong brand value, and Elon has managed to completely destroy it. Musk is on the wrong side of the buyers. It's not people with cowboy boots who buy Tesla.
These gains come after a period of significant losses for shorts. During Tesla's previous increases since 2010, short sellers lost about $440 billion on the stock.
Many have tried to speculate on a decline, but the stock has previously proven to be resilient to that kind of thing. But now it's going the way of the shorts.
On Tuesday alone this week, the car brand's value fell by another 4 percent on the stock exchange. However, that largely did not change the fact that Tesla is still among the world's most valuable car brands.
