For almost three years, Tesla was consistently the most shorted stock on Wall Street. The electric carmaker recently yielded that position to Apple, the world’s most valuable public company, according to S3 Partners, a financial data analytics firm.
Investors who short a stock expect it to decline in value. A strong short interest usually reflects investors’ anticipation of a company entering a difficult period or a sentiment that its share price is too high. As of Sept. 13, Apple had $18.4 billion in short interest, or stock sold on borrowed shares, while Tesla had $17.4 billion, according to S3 Partners data. Both companies are well ahead of third-place Microsoft, which had only $11 billion in short interest on Sept. 13.
The reason behind the change in ranks between Tesla and Apple was not short sellers raising bets on Apple, but them reducing exposure on Tesla, S3 Partners’ research found http://gty.im/1241013534 http://gty.im/1241013534 . In the past 30 days, “we’ve seen short covering (short sellers buying back shares to reduce a short position) in Tesla but short selling in Apple,” Ihor Dusaniwsky, S3 Partners’ managing director of predictive analytics, wrote in a research note on Sept. 14.
Both Apple and Tesla stocks have outperformed the Nasdaq index this year, but Tesla has fared worse than Apple. Apple stock is down 18 percent in 2022, while Tesla is down nearly 26 percent.