Tesla’s short sellers lost $ 40 billion in 2020. Elon Musk made more than triple that

by



[ad_1]

His personal net worth has skyrocketed like one of his SpaceX rockets, growing by more than $ 100 billion. And its loudest critics, aka the investors who bypassed You’re here (TSLA) on the assumption that the share price falls, has lost a record $ 40.1 billion by betting against it, according to analysis by S3 Partners.

These critiques, which Musk has had a very harsh and very public war of words with over the years, stood to make a healthy comeback if Tesla’s shares fell in value, but risked big losses if the stock continued to gain. .

And, boy, has he won, increasing 743% over the year.

S3 chief executive and subject matter expert Ihor Dusaniwsky said the $ 40.1 billion in losses suffered by short investors in Tesla shares was different from losses suffered by short investors in other companies – the year last or never -.

In fact, the losses suffered by the Tesla shorts were more than the short losses of the next nine companies – combined. Losses on n ° 2 Apple (AAPL) in 2020 it was $ 6.7 billion, slightly more than the Tesla shorts lost in December alone. Amazon (AMZN) cost shorts $ 5.8 billion, according to S3.
Tesla has long been a favorite game of short investors, who controlled around 19% of the stock at the start of 2020. For anyone who believes the company is a paradigm-shifting clean energy leader with unlimited potential, others investors argue that it is an overrated niche player that will soon be overwhelmed by larger and more established automakers.

Many shorts were forced to admit defeat last year. About two-thirds of short positions were unwound in 2020, which in itself was a factor that helped push Tesla shares up as short investors were forced to buy more expensive shares to exit their markets. positions.

“There was a slight tailwind in Tesla’s price movement throughout the year,” Dusaniwsky said.

But the year ended with short investors still holding around 5.5% of Tesla’s shares, which equates to a $ 31 billion bet against the company’s future prospects. By comparison, $ 13.3 billion and $ 10.2 billion are currently wagered against Apple and Amazon respectively, with shorts controlling less than 1% of the shares of each of those companies.

Musk’s very lucrative year

Musk has regularly wrestled with short sellers, taking photos of them on Twitter and in public comments. But beyond the joy he feels over their losses last year, their collective pain doesn’t compare to his own personal gains.

Musk’s stake of 170 million shares grew by $ 106 billion in 2020, and that’s just part of the gains he earned from Tesla’s performance. He entered the year with options to purchase an additional 22.9 million shares, after adjusting for the company’s stock split by five for one. These options have increased by $ 14.2 billion.

Tesla hits half a million cars target by 2020
During 2020, Musk also qualified for options to purchase an additional 33.8 million shares, part of his option compensation package only that he receives when the company hits certain market values. and operational objectives. He qualified for four separate option tranches in 2020, which ended the year at $ 21.5 billion after taking the exercise price into account.

And he’s set to qualify for two more options rounds to buy an additional 16.9 million shares at the start of the year, given the company’s recent financial and market performance. These additional options would be worth $ 10.7 billion based on the year-end share price.

In total, Musk is expected to soon control enough options to buy an additional 73.5 million Tesla shares at an average price of around $ 50 per share. It is currently trading above $ 700.

Musk has yet to exercise any of the options he currently holds, which is not unusual. Executives who have been granted stock options rarely exercise them until they are ready to sell the stock or the options are about to expire.

All of this made Musk the second richest man in the world, with a net worth that Forbes estimates at $ 162 million, behind Amazon CEO Jeff Bezos, who has a net worth of $ 187 billion. Bezos’ current holdings in Amazon only increased by $ 75 billion during 2020.

[ad_2]

Source link