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Tesla short sellers expected to earn nearly $1.4 billion due to stock decline.
ByAinvest
Tuesday, Jul 8, 2025 11:01 am ET1min read
Tesla short sellers expected to earn nearly $1.4 billion due to stock decline.
Tesla (TSLA) short sellers are poised to make significant profits following the company's stock decline, which was exacerbated by CEO Elon Musk's political moves. According to data analytics firm Ortex, short sellers are expected to earn about $1.4 billion from their positions on Monday, July 7 [1].The company's shares slumped 7.5% in early trading, falling to $296 per share. This decline follows Musk's announcement of plans to launch a new political party, the American Party, which has heightened concerns about his commitment to Tesla's future [2].
This latest stock drop is part of a broader trend. Tesla's shares have lost more than 21% so far this year, with short sellers making over $4 billion in profits on June 5 due to Musk's social media feud with President Trump [1].
Musk's political involvement and the loss of EV tax credits and regulatory credits stemming from Trump's "One Big Beautiful Bill" have been major factors in the stock's decline. The bill eliminated the EV mandate and reduced fines for not meeting fuel economy standards, which significantly impacts Tesla's regulatory credit revenue [2].
The stock's decline has also had a substantial impact on Musk's net worth. According to the Bloomberg Billionaires Index, Musk's wealth has dropped by over $86 billion year-to-date, with the latest stock price decline resulting in a loss of $15.3 billion [3].
Analysts are concerned that Musk's political involvement and the loss of regulatory credits will continue to put pressure on Tesla's stock and bottom line. Wedbush analyst Dan Ives warned that the Tesla board might need to intervene if Musk does not prioritize the company's growth strategy [2].
References:
[1] https://www.businesstimes.com.sg/companies-markets/tesla-short-sellers-set-pocket-about-us1-4-billion-profits-after-stock-slump
[2] https://finance.yahoo.com/news/tesla-stock-drops-on-musks-latest-battle-with-trump-loss-of-ev-and-regulatory-credits-140258240.html
[3] https://www.ibtimes.co.uk/tesla-short-sellers-make-14b-profits-stock-price-crash-musks-net-worth-drops-153b-1737763
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