Tesla rally hurts hedge funds that shorted EV maker ahead of Q2 results

Tesla (NASDAQ:TSLA) shares saw some momentum last week following the release of its Q2 2024 vehicle deliveries and production report, with the company gaining $150 billion in valuation in three days. Amid the surge, Tesla shorts were placed, including hedge funds that bet against the EV maker ahead of the release of the Q2 deliveries report.

As noted in a Bloomberg News report, about 18% of the more than 500 hedge funds tracked by data provider Hazeltree had a short position in the electric vehicle maker at the end of Q2 2024, the highest percentage in more than a year. By comparison, just 15% of hedge funds tracked by the data provider had a short position in Tesla at the end of Q1 2024.

Tesla shares surged following the release of the company’s Q2 2024 vehicle delivery and production report, which beat Wall Street estimates. In the two trading days since the report was released, TSLA shares have surged 17%, resulting in an estimated loss of $3.5 billion on a market value basis, as noted in a CNBC report. It should be noted that Tesla shares have risen by about 40% since the beginning of June 2024.

In a post on the social media platform X, Elon Musk responded to the news of the hedge fund losses with a crying emoji.

Given the past few months, it’s no surprise that Tesla has attracted significant interest from short sellers. Tesla’s Q1 2024 vehicle deliveries fell short, and in Q2 the company began a major round of layoffs, with several key executives leaving. Tesla’s leadership also appeared to be in deep trouble, as rumors suggested that Elon Musk could leave the company if TSLA shareholders didn’t ratify his 2018 CEO Performance Award.

Tesla is expected to hold its Q2 2024 earnings call on Tuesday, July 23, 2024 at 4:30 p.m. CT (5:30 p.m. ET). Tesla is expected to publish its Q2 2024 Update Letter, which will be available on the company’s Investor Relations website after the close of business on July 23. The results of the Q2 2024 Update Letter, as well as other relevant topics, are expected to be discussed on the earnings call.

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