While rocket enthusiasts were looking skyward as SpaceXâ€™s Falcon Heavy delivered a Tesla Roadster on a course to orbit Mars, Tesla Inc. (TSLA) investors are looking towards todayâ€™s earnings announcement to see if Model 3 deliveries inch closer to Elon Muskâ€™s already delayed production guidance of 5,000 per week by June and 10,000 per week in production by the end of the year. Investors will also be interested in the viability of Teslaâ€™s autonomous driving feature, international expansion, and its cash burn rate.
The conviction of Tesla short sellers has been commendable as they are not only down $4.96 billion in mark-to-market losses since 2016, they have paid $637 million in stock borrow financing fees in order to keep their positions on since 2016. Short sellers continue to press their â€śdonâ€™t passâ€ť bets even after being down a net $5.59 billion in mark-to-market net of financing losses, down 23.42% per annum since 2016. Teslaâ€™s short interest climbed to $10.9 billion in late January, but leading into todayâ€™s earnings announcement, we have seen a $624 million reduction in Tesla short exposure. Some of these buy to covers may have been by â€śnewerâ€ť shorts realizing some of Februaryâ€™s $604 million of mark-to-market profits prior to todayâ€™s +$10.25 price move which generated $340 million of mark-to-market losses.
(in $ millions)
|Average Short Interest||Year-to-Date|
Mark-to-Market P/L %
Tesla continues to be the largest short in the worldwide Auto Manufacturing Sector, the largest equity short in the U.S. market and the third largest worldwide short behind Alibaba Group (BABA) at $39.5 billion and Ping An Insurance Group (2318 HK) at $15.3 billion. Worldwide short interest in the Auto Manufacturing sector is $26.0 billion, down $949 million over the last week and U.S. short interest in the Auto Manufacturing sector is $13.3 billion, down $794 million over the same period. The Auto Manufacturing sector is down for the year, but has rebounded in February. The First Trust Nasdaq Global Auto Index ETF (CARZ) is down 2% year-to-date but up 2% in February.
|W.W. Auto Manufacturing|
(in $ millions)
|1 Wk Change|
|Tesla Inc||TSLA US||$9,898||-$624||-$1,260.1||+$164.1|
|General Motors||GM US||$1,658||-$30||+$10.0||+$21.6|
|Suzuki Motors||7269 JP||$1,492||+$25||+$56.1||+$33.5|
|Ford Motor||F US||$1,288||-$120||-$209.6||+$24.3|
|BYD Co Ltd||1211 HK||$1,076||-$107||+$28.9||+$99.6|
|Daimler AG||DAI GR||$916||-$52||-$44.4||+$34.9|
|Peugeot AG||UG FP||$843||+$8||-$40.5||+$4.5|
|Toyota Motor||7203 JP||$831||+$207||+$8.5||+$16.8|
|Volkswagen AG||VOW3 GR||$765||-$36||-$37.4||+$31.2|
|BMW AG||BMW GR||$700||+$35||-$37.4||+$18.6|
|W.W. Auto Manufacturing||$26,025||-$949|
|U.S. Auto Manufacturing||$13,257||-$794|
With Tesla short interest declining slightly prior to todayâ€™s earnings announcement some short sellers may be wary of another Elon Musk led rally. With nearly $10 billion of short interest in the stock, shorts are not shying away from their long term commitment to their trade.
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Managing Director Predictive Analytics, S3 Partners, LLC
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