Tesla rally hurts hedge funds that shorted EV maker before Q2 results

Tesla shares (NASDAQ:TSLA) saw some momentum last week following the release of its Q2 2024 vehicle delivery and production report, with the company gaining $150 billion worth of valuation in three days. Amidst this rise, Tesla shorts were stung, including hedge funds that bet against the EV maker in the lead up to the Q2 delivery report’s release. 

As noted in a Bloomberg News report, about 18% of the over 500 hedge funds being tracked by data provider Hazeltree held a short position in the electric vehicle maker at the end of Q2 2024, the highest percentage in over a year. In comparison, only 15% of the hedge funds tracked by the data provider had a short position against Tesla at the end of Q1 2024. 

Tesla shares surged following the release of the company’s Q2 2024 vehicle delivery and production report, which beat Wall Street’s estimates. In the two trading days since the report’s release, TSLA shares climbed 17%, leading to short sellers losing an estimated $3.5 billion on a mark-to-market basis, as noted in a CNBC report. It should be noted that since the start of June 2024, Tesla shares have risen about 40%. 

In a post on social media platform X, Elon Musk has responded to the news of the hedge funds’ losses with a crying face emoji.

Considering the past few months, it is no surprise that Tesla attracted substantial interest from short-sellers. Tesla’s Q1 2024 vehicle deliveries fell below expectations, and over Q2, the company initiated a major round of job cuts that saw the departure of some key executives. Tesla’s leadership also seemed to be in dire straits as rumors suggested that Elon Musk may leave the company if TSLA shareholders did not ratify this 2018 CEO Performance Award. 

Tesla is expected to hold its Q2 2024 earnings call on Tuesday, July 23, 2024 at 4:30 p.m. CT (5:30 p.m. ET).  Tesla is expected to release its Q2 2024 Update Letter, which will be available on the company’s Investors Relations website after the end of July 23’s trading day. The results of the Q2 2024 Update Letter, as well as other pertinent topics, are expected to be discussed in the earnings call. 

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