Tesla Shorts Cut Position by 11%. Profit Booking or Avoiding Q2 Earnings Call?

Tesla, one of the most shorted company in United States may be heading for some relief as shorts have slashed their position by nearly 11% in the last three months.

Tesla shares shorted is now 35.4 million, a sharp decline from the 40 million range it reached on April 26 when the stock was trading around $286. Tesla stock price surged to over $370 in June before declining to $306.30 at yesterday’s close.

#Tesla shares shorted is 35.4 million, 27.9% of float, short interest is $10.93 billion. $TSLA shorts are up $107 million in mark-to-market profits on today’s 1% decline bringing July’s profit to $1.26 billion but down $435 million year-to-date. Shares shorted up 814k in July pic.twitter.com/28XhCMESIC

                           — Ihor Dusaniwsky (@ihors3) July 26, 2018

It’s quite possible that the surge and subsequent decline helped Tesla shorts to book some profits and reduce their holding. But its also possible that the shorts want to reduce their exposure before Tesla releases its second quarter earnings report on August 1, 2018.

Screenshot from Tradingview

Tesla shorts have lost money in 2016 ($866.4 million), 2017 ($3,566.57 million) and despite booking $1.26 billion profits in July, the shorts are still down by $435 million since the start of the year.

“Tesla has been one of the top two U.S. equity shorts for several years as its stock price continued to surge – with way over twenty years in stock loan, I’ve never seen a stock so immune to a short squeeze. Tesla is the ultimate Teflon Short.” –  Ihor Dusaniwsky,  Managing Director of Predictive Analytics. S3 Partners LLC tweeted in May.