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Investors selling shares of Tesla Inc. earn $ 500 million in paper earnings on Friday after Chief Executive Officer Elon Musk was shot in the US Securities and Exchange Commission and reiterated his criticisms of short sellers on tweets.
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TSLA, -7.05%
Shares ended down 7% on Friday, as Wall Street reacted to Musk's tweet apparently out of nowhere on Thursday night about the "shortseller enrichment commission." Musk also tweeted that short sellers were "valuable destroyers" and should be illegal.
See also: Tesla stock collapses after Musk's attempts at SEC, sellers in the open
Friday's losses for Tesla "have generated more than $ 500,000 in paper profit for short films," said S3 Partners LLC, which tracks short-term interest data in real time, in a note. Since the news of Musk's settlement with the SEC, shorts have increased by $ 941 million, S3 Partners said.
"It is clear that short positions are strengthening as a result of strong sales by long positions, while Musk is demonstrating its refusal to stay out of the controversy," the note said.
Musk and the regulators agreed Saturday on an agreement on charges. Musk had misled investors when he tweeted on Aug. 7, he had "secured funding" to take Tesla privately. The regulation has not yet been approved by the court.
Read more: "Think of the little people": Tesla fans beg Elon Musk to stop tweeting
The terms of the settlement included Tesla's obligation to control Musk's communications on social media, but it was not clear when Tesla intended to implement it. The company did not return a request for comment.
Related: Einhorn sees Lehman's tints at Tesla and says Musk knows deception catches him
Short sellers are betting on a stock price. They borrow the shares and then sell them, hoping to recover them at a lower price, return them to the original lender and pocket the difference.
Tesla shares rose 17% on Monday, but lost gains as the week progressed and ended the month down 1.1%. The title has lost 16% this year, contrasting with the 8% progress of the S & P 500 index
SPX, -0.55%
and 7% for the Dow Jones Industrial Average.
DJIA, -0.68%
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