Short sellers who bet on a decline in Tesla (TSLA) stock are now getting crushed as the electric vehicle maker’s share price skyrockets following Donald Trump’s U.S. electoral win.
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TSLA stock is up another 9% today (November 11), bringing its gains over the past five trading sessions to 41%. That big gain is hurting short sellers who bet against Tesla’s stock in recent months and in the run-up to the U.S. presidential election.
Tesla CEO Elon Musk was one of Trump’s biggest supporters and financial donors during the election campaign and TSLA stock is now basking in the glow of Trump’s success at the ballot box. The post-election rally has pushed Tesla’s market capitalization above $1 trillion.
Pain for Short Sellers
Tesla’s stock has long been one of the most heavily shorted on Wall Street. Slowing vehicle sales, inconsistent financial results, and delayed product launches have led many traders and investors to bet against TSLA stock. Until the U.S. election on November 5, Tesla’s shares had been flat this year, with all their gains in 2024 coming in recent days.
About 3% of the Tesla shares available for trading, about 79 million shares outstanding, are currently sold short. That’s significantly higher than the 1% short-interest ratio for most large-cap technology stocks. The high short interest in TSLA stock has led to short-seller losses approaching $7 billion since the election less than a week ago.
The pain for short sellers may worsen as many analysts expect TSLA stock to rally and hit new all-time highs. Wedbush analyst Dan Ives recently boosted his target price on the stock to $400 from $300 and maintained a Buy rating on the shares.
Is TSLA Stock a Buy?
Tesla stock currently has a consensus Hold rating among 35 Wall Street analysts. That rating is based on 11 Buy, 16 Hold, and eight Sell recommendations made in the last three months. The average TSLA price target of $207.83 implies 41.16% downside risk from current levels.
