Tesla short-sellers are getting hammered by Donald Trump's election win
As Tesla stock continues its rally on the heels of Donald Trump’s election win, short-sellers are feeling the pain.
Hedge funds betting against Tesla (TSLA) stock, also known as shorting, lost at least $5.2 billion, Bloomberg calculated using data compiled by S3 Partners. That comes as the electric vehicle maker, helmed by billionaire and staunch Trump ally Elon Musk, sees a renewed surge that helped its market capitalization once again pass $1 trillion last week.
Since Election Day, Tesla stock has risen almost 28%, with shares up almost 7% in pre-market trading Monday. As of last Friday, shares of the EV company were up 44% over the prior 12 trading days, far outpacing the Nasdaq’s 4% gain during the same period, according to Gene Munster, managing partner at Deepwater Asset Management.
Musk has become a close ally of Trump’s over the past several months, even spending election night with him at Trump’s Mar-a-Lago resort in Florida. Earlier this year, Musk founded a super PAC in support of Trump’s re-election bid, and donated at least $80 million.
This could give Tesla a significant advantage under the new Trump administration — including some influence on the regulation of driverless vehicles, while at the same time putting its competitors at a disadvantage.
The CEO, who leads a number of other firms including SpaceX, is poised to have some level of role or influence in the upcoming Trump administration, including perhaps leading a newly proposed Department of Government Efficiency (or DOGE, after Musk’s favorite cryptocurrency).
As part of that job, Musk has said he would advocate for a national approach to regulating driverless vehicles — a key market for Tesla — and cut regulations, which he has repeatedly criticized as holding his companies back. SpaceX, Neuralink, X, and Tesla are collectively the subject of at least 20 recent investigations or reviews.
While Trump’s victory is good for Tesla, it’s expected to be less friendly to other automakers with EV plans. He’s expected to freeze provisions of President Joe Biden’s Inflation Reduction Act of 2022, which provided $7,500 tax credits for American-made EVs. Musk has supported ending the tax credit, believing it would help Tesla sales while hurting itsrivals.
