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The magnificent rally of Tesla stock (TSLA) on Thursday, following the announcement of the company’s Q3 2024 earnings, completely overshadowed the gains made by short sellers in 2024. The electric vehicle manufacturer’s market capitalization soared by a staggering $150 billion in a single day, accompanied by a remarkable 22% increase in Tesla stock (NASDAQ:TSLA). This surge not only delighted analysts and investors but also delivered a swift and crushing blow to TSLA short sellers, who suffered a staggering $3.5 billion loss in just one day.
Expectations were low for Tesla’s Q3 earnings, with many anticipating underwhelming results due to a decline of approximately 14% in TSLA stock throughout the year. However, the actual results surpassed expectations, with Elon Musk hinting at a potential 30% increase in vehicle sales for the upcoming year during the earnings call. This optimistic outlook was a significant contributing factor to Tesla’s second-largest single-day rally since going public.
The sudden surge in Tesla’s market capitalization, coupled with the substantial increase in stock price, was a dramatic turn of events that caught many off guard. Short sellers who had been profiting from Tesla’s performance in 2024 saw their gains wiped out in a matter of hours. According to S3 Partners, the $1.7 billion profit accumulated by Tesla shorts throughout the year was completely eradicated, leaving them with a $1.8 billion loss by the end of Thursday’s trading session.
Steve Sosnick, chief strategist at Interactive Brokers, noted that Tesla’s optimistic guidance had truly changed the game for the company. He emphasized the market’s willingness to trust Elon Musk’s projections for sales growth, at least for the time being. Tesla’s exceptional guidance not only surprised short sellers but also caught analysts off guard. On average, analysts had expected Tesla to report a 10% decrease in quarterly profits. However, the company revealed a nine percent increase in revenue compared to the previous fiscal year, exceeding expectations across the board.
The aftermath of Tesla’s remarkable rally was felt throughout the market, with both bulls and bears reevaluating their positions in light of the company’s impressive performance. The swift and drastic turnaround in Tesla’s fortunes serves as a reminder of the volatility and unpredictability of the stock market. While some may bask in the glory of Tesla’s success, others are left reeling from the sudden and unexpected turn of events.
In conclusion, Tesla’s monumental rally on Thursday, fueled by its Q3 2024 earnings announcement, was nothing short of extraordinary. The company’s market capitalization soared, its stock price surged, and short sellers were left counting their losses. Tesla’s performance not only exceeded expectations but also defied predictions, leaving many scrambling to make sense of the rapid changes in fortune. As Tesla continues to navigate the challenges and opportunities of the electric vehicle market, one thing remains clear: the only certainty in the stock market is its inherent uncertainty.
