Short sellers betting against Tesla Inc (TSLA.O) are expected to earn $1.4 billion in paper profits this week after the electric vehicle maker’s stock plunged 7.5% on Monday.
The decline followed CEO Elon Musk’s announcement of plans to launch a new U.S. political party, which rattled investor confidence and reignited concerns about his long-term focus on Tesla. The stock dropped to $291.50 in early trading, down from a previous close of $315, as traders reacted swiftly to Musk’s political ambitions and his ongoing feud with former U.S. President Donald Trump.
“This is not just market fluctuation, it’s a credibility problem,” said David Bahnsen, chief investment officer at The Bahnsen Group. “Investors are questioning whether Tesla’s leadership is being distracted from core operations.”
According to analytics firm Ortex, short sellers, those who profit from a stock’s decline, stand to gain nearly $1.4 billion at current price levels. The figure adds to over $4 billion in short-side profits recorded on June 5, when Tesla experienced its steepest one-day market value drop following Musk’s public clash with Trump.
Tesla has now shed more than 21% of its market value year-to-date, placing pressure on its reputation as a tech-driven automaker. The stock’s volatility continues to raise questions about governance, leadership stability, and its ability to navigate a competitive EV market while its CEO’s attention appears divided.
Read more on Tesla’s troubles deepen, deliveries down 14% in Q2
