Tesla stock (TSLA)'s monster rally erases shorts' 2024 gains in one day
Yesterday at 07:07 PM
Tesla stock’s (NASDAQ:TSLA) 22% rise on Thursday following the release of the company’s Q3 2024 earnings resulted in the electric vehicle maker adding $150 billion to its market cap in a single day. At the same time, Tesla’s 22% rise also resulted in TSLA short sellers receiving a $3.5 billion blow in one day.
Tesla’s Q3 2024 results were pleasantly surprising, both for analysts and investors alike. As noted in a BNN Bloomberg report, expectations going into Tesla’s Q3 earnings were low. TSLA stock was down about 14% for the year. Tesla beat expectations, however, and Elon Musk noted during the Q3 earnings call that the company could see a 30% growth in vehicle sales next year.
Tesla’s upbeat results resulted in the electric vehicle maker’s second-largest single-day rally since it went public. By the end of Thursday’s trading day, Tesla stock was up 22%, its market cap was up $150 billion, and TSLA shorts took a $3.5 billion blow. As per S3 Partners, this meant that Tesla shorts’ $1.7 billion year-to-date profit was erased in a single day. Not only that, TSLA shorts were down $1.8 billion for 2024 by the end of Thursday’s trading.
In one day, Tesla shorts saw their YTD profit of $1.7 billion vanish, and flip to a loss of $1.8 billion for 2024 https://t.co/Hvpa0D94TD
— zerohedge (@zerohedge) October 25, 2024
Steve Sosnick, chief strategist at Interactive Brokers, noted that Tesla’s optimistic guidance was a true difference maker. “Tesla’s guidance was extraordinary. At least for yesterday, the market was willing to trust Elon Musk’s assertions about sales growth,” he said.
Interestingly enough, it was not just Tesla short sellers that were caught off guard by the company’s Q3 results. As noted by Bloomberg, analysts on average were surprised by Tesla’s Q3 numbers as well. On average, analysts were expecting Tesla to report a 10% drop in quarterly profit. Instead, the company reported a 9% rise in revenue from the previous year period. Tesla’s automotive gross margin excluding regulatory credits was also beyond expectations.
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