Tesla Haters Lose $1.5 Billion In One Day, Elon Musk Proves Them Wrong

Tesla Inc. has long been waging a war against short sellers who continue to heavily short its stock in their quest to make tons of money out of Tesla's misfortunes. As a result, Tesla remains one of the most shorted stocks on Wall Street.

This war has seen Tesla win some and lose some. But Tesla won big Wednesday when it announced a surprising quarterly profit that left short sellers holding the bag big time. Short sellers took a huge beating from Tesla and suffered a $1.5 billion paper loss on Thursday alone after Tesla shares skyrocketed $45, or over 21%, on Wednesday.

Their losses will likely extend into Friday as Tesla's stock price ended Thursday at $299.68, or up 17.67%, in regular trading. The stock later dropped to $299 in after hours.

Short sellers are bearish investors betting a company's shares will fall and make them money. They borrow shares and then sell them in the hopes of buying them back later at a lower price. They make money off the difference. They can actually be called Tesla haters.

Tesla’s stock price jumped by over $50 to $308.25 at its height after Tesla reported it had posted a $342 million profit in Q3. Analysts had been expecting Tesla to lose $72 million, according to FactSet.

That surprising news carried over into Thursday and sent Tesla's stock soaring to its biggest increase since 2013. This stunning rally hammered short sellers.

The reason for short sellers underestimating Tesla is clear: Q3 2019 was only the fourth time Tesla has had a profitable quarter over the past 20 quarters, or five years. The odds looked good for them going into Wednesday.

They also know Tesla lost nearly $600 million in the first six months of the year, so the Q3 profit is an anomaly some analysts say was helped along by stringent cost cutting at Tesla.

Tesla is now expected to pull-off back-to-back profitable quarters in the second half. Analysts expect Tesla to another $200 million in Q4. But this won't stop the Tesla haters to do what they do best, and that's to keep on shorting.