Tesla shares have lost eight straight weeks and are on track to extend that streak to nine after Monday’s 4% decline. Analysts calculate that traders betting on Musk’s stock have made $16.2 billion on paper since Dec. 17 of last year.
Tesla shares fell 4.79% on Monday, March 17, extending a losing streak that began on December 17, 2024, when the company hit an all-time high of $479.96. Since then, the electric car maker's stock has fallen 50.41%. Monday's closing price was just $238.
Since mid-December last year, Tesla’s market capitalization has fallen by more than $700 billion, and the company has fallen out of the top ten most valuable public companies in the world. The declines have also reduced the estimated valuation of Elon Musk’s net worth, which has fallen by $100 billion.
Tesla Stock (TradingView)
As described by the Financial Times, hedge fund traders betting on falling stocks of companies could have made as much as $16.2 billion on the ongoing collapse of Tesla's prices. According to data provider S3 Partners, this is how much their paper profits amounted to since December 17. Currently, 2.6% of Tesla shares (71.5 million units) are covered by short selling. The number of shorts has increased by 16.3% in the past month.
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“Tesla had a very strong brand, but Elon managed to completely destroy it. Musk is on the wrong side of his model customer. It's not people in cowboy boots who buy Tesla,” Per Lekander, managing partner at the $1.5 billion Clean Energy Transition hedge fund, who first shorted Tesla shares a few years ago, told the Financial Times.
At the same time, it is worth noting that the recent run of traders betting on Tesla's declines is only a partial reversal of the severe losses it has suffered in recent years. According to S3 Partners, shorting Elon Musk's shares has brought hedge funds $64.5 billion in paper losses, and many of them were forced to abandon their positions.
Great hopes and disappointment
After Donald Trump won the presidential election in the United States, Elon Musk was seen by investors as the second biggest winner of the race. It was expected that the billionaire's businesses would gain easier access to federal funds and a protective umbrella from the new government. They were also supposed to be supported by the announced deregulation.
Investors did not anticipate Musk would become so involved in political activity that he would gain many opponents. Tesla’s fourth-quarter results, released in late January, fell short of market expectations. What’s more, the company warned in a letter to the U.S. Trade Agency last week that Trump’s trade war could expose it to retaliatory tariffs that would raise the cost of producing vehicles in the U.S.
JPMorgan last week lowered its year-end price target for Tesla from $135 to $120, writing in a note: “We are hard-pressed to think of anything similar in the history of the auto industry where a brand has lost value so quickly,” the Financial Times quoted the company as saying.
Poles are turning away from Tesla. Sales have fallen by half
The number of new Tesla registrations in Poland has fallen by over 50 percent year-on-year, according to data from the Polish Automotive Industry Association. Elon Musk's departing customers are being taken over by Romanians, Koreans, and Japanese.
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