Traders who have bet against Tesla Inc. are projected to earn approximately $1.4 billion due to a drop in the company’s stock. This comes after Elon Musk’s announcement of his plan to launch a new U.S. political party, which has sparked doubts about his focus on Tesla’s future.
What Happened
Musk’s political aspirations, combined with his public clash with President Donald Trump over the tax-cut and spending bill, led to a nearly 7% drop in Tesla’s shares during early trading on Monday. By the close of trading, Tesla’s shares had dropped 6.8% to $293.94, marking a total loss of 22.5% year-to-date.
Impact on Short Sellers
Those who bet against the electric vehicle maker are poised to make around $1.4 billion, according to data from analytics firm Ortex. This follows a $4 billion profit made by short sellers on June 5, after Tesla’s largest single-day market value drop, also due to the Musk-Trump social media spat.
Why It Matters
Musk’s political ambitions have been a point of concern for investors, with some suggesting that the lack of an alternative CEO could be detrimental to Tesla’s future. The company’s shares have been on a downward trajectory, with profits and deliveries hitting multi-quarter lows, leading to investor unease.
Reactions from Investors and Analysts
Veteran investors and analysts, including Ross Gerber and Dan Ives, have criticized Musk’s return to politics and questioned the Tesla Board of Directors as the company’s stock declined on Monday. President Donald Trump has also expressed his discontent with Musk’s political plans, describing them as a “train wreck” and suggesting that the U.S. system is not designed for third-party disruption.
Key Points
- Tesla short sellers are projected to earn $1.4 billion due to a drop in the company’s stock
- Elon Musk’s political aspirations have sparked doubts about his focus on Tesla’s future
- The company’s shares have dropped 22.5% year-to-date
- Investors and analysts are concerned about the lack of an alternative CEO and the impact of Musk’s political ambitions on Tesla’s future
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Disclaimer
This content was partially produced with the help of AI tools.