Traders have lost billions of dollars betting against Tesla

2017 has been a brutal year for traders betting against Tesla.

The stock has soared 46% so far this year, and has caused billions of dollars of losses for those who have bet against it.

The damage inflicted on short sellers has been especially pleasing to Tesla CEO Elon Musk, who earlier this month tweeted, “Stormy weather in Shortville …” on a particularly bad day for Tesla shorts.

The short trade in Tesla was supposed to be a slam dunk.

The company delivered
76,230 vehicles in 2016, well below the 80,000 to 90,000 that Wall Street was expecting.

“Our Q4 delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct,” the company said in a statement at the time of the release in an effort to deflect criticism surrounding the shortfall.

Additionally, Tesla was burning through cash at an alarming rate.

At the end of January, short interest made up about 35% of the float, or shares available for trading. They had already lost
$US2.3 billion when taking into account financing costs.

Since then, the stock has kept ripping higher and the shorts are still piling in.

Shares are up another 3% on Monday after Piper Jaffray called Tesla a growth stock “investors can’t afford to ignore” while upgrading the stock and slapping on a price target of $US368 a share. Monday’s gain made Tesla the largest US automaker by market cap, at least temporarily.

Data provided to Business Insider by Ihor Dusaniwsky, head of research at financial analytics firm S3 Partners, shows Monday’s gain has added to the misery of the shorts. They have lost more than $US261 million on Monday alone, upping their total loss to $US3.2 billion.

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