Tesla tops list of most shorted stocks for third month in August - Hazeltree (updated)

Federated Hermes

12/09/2023 13:53

By Nell Mackenzie
       LONDON, Sept 12 (Reuters) - Tesla  TSLA.O  topped a list
of the most shorted large-cap U.S. stocks for a third
consecutive month in August, securities lending data firm
Hazeltree said in a report on Tuesday.    
    Tesla stock rallied over 5% on Monday after a Morgan Stanley
 MS.N  note suggested the automaker's Dojo supercomputer could
bolster Tesla's market value. 
    A short bet expects a stock price to fall.             
    Hazeltree, which tracks 12,000 equities globally, said the
second and third most shorted stocks last month were Charter
Communications  CHTR.O  and Apple  AAPL.O  respectively.
    Tesla, Charter Communications and Apple did not immediately
respond to requests for comment. 
    Data compiled by research firm Whale Wisdom showed a range
of different strategies underlying short bets against Tesla
disclosed to the Securities and Exchange Commission on June 30. 
   
    Those included investors with funds taking long and short
positions in stocks: Diamond Hill, Leuthold Funds and Forum
Funds. A Blackstone fund of funds contained the short positions
of other hedge funds and investment managers. 
    Trades held by the hedge fund AQR Capital Management and the
investment manager Federated Hermes aimed to avoid market risk
by offsetting rising and falling prices on different asset
classes. 
    Tesla's CEO Elon Musk on Monday posted on his social media
platform X a reaction to the short position that Microsoft
co-founder Bill Gates has held against the firm, according to a
recent biography of Musk by Walter Isaacson. 
    "Taking out a short position against Tesla, as Gates did,
results in the highest return only if a company goes bankrupt!"
posted Musk. 
    Hedge funds have been shorting U.S. stocks at a rapid pace
in recent weeks, a Goldman Sachs note this week showed, and
total short bets reached their highest value in six months.  
    Hedge funds were net short consumer discretionary stocks,
which would include Tesla, for the year ending Sept. 8,
according to the Goldman note.
    "If I'm honest, I've only lost money trying to short TSLA,"
said Dan Izzo, founder of the hedge fund Blackbird Capital, who
did not disclose whether he currently had a position in Tesla.
    "Not because I'm wrong about it, but because the market can
be irrational for longer than I can afford to be proven right." 

 (Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and
Kevin Liffey)
 ((Nell.Mackenzie@thomsonreuters.com; https://twitter.com/nellmooney;))