Short sellers have made a $16.2 billion profit betting against Tesla (NASDAQ:TSLA) as the company’s stock has lost half its value in the last three months, according to Financial Times, citing S3 Partners.
Tesla has long been a tough stock to short, but recent challengesincluding falling demand in China and Europe, intensifying competition, and pricing pressureshave reversed the trend. Shares slid another 5% Monday and were down 3% in premarket trading Tuesday.
The latest hit comes as Tesla ramps up incentives in China, offering free trials of its Full Self-Driving (FSD) software and extending zero-interest credit deals after slashing Model Y prices. The company’s China-made EV sales plummeted 49% year-over-year in February. Meanwhile, European sales dropped 71% in Germany and 44% in France in the first two months of the year.
Amid these headwinds, analysts are revising expectations. Mizuho cut its price target to $430 from $515, citing geopolitical risks, brand perception issues, and slowing demand. RBC Capital also lowered its target to $320 from $440 but maintained a Buy rating, warning against overreacting to short-term demand swings.
This article first appeared on GuruFocus.
