Short sellers with their sights on Tesla Inc. are holding onto bets that the electric car maker is running on borrowed time, despite the stock’s biggest one-day rally in years.
Investors who had placed wagers on Tesla falling had made about $10.5 billion in short interest—making Tesla the most shorted stock in the U.S. on a dollar basis, according to The Wall Street Journal. Short sellers pocket the difference after they borrow shares and then sell them, hoping to buy back the shares at lower prices.
On Thursday, Tesla showed it burned through less cash than investors expected, so those bets turned into a $1.7 billion loss. According to The Wall Street Journal, Tesla shares jumped 16% to $349.54. This was their biggest one-day gain since 2013. It also successfully wiped out all of short sellers’ profits for the year.
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