Tesla (TSLA) has lost over 40% of its market value since December, driving a rebound in short interest to 81 million shares. Once at historic lows, short interest is now breaking out of a downward trend as bearish sentiment grows. Analysts have turned negative, and recent news, including a full Cybertruck recall, has added pressure.

TSLA has lost over 40% of its market value since hitting a 52-week high of $478/share on 12/17/2024.

The short interest notional is the fourth largest, after NVSA, MSFT, and AAPL.

Short interest as a percentage of float has increased by 20%, though total short interest is down.

Prior to the rapid deterioration in stock price, short sellers had been feeling the squeeze.

Short interest had flirted with all-time lows of 2% of float as recently as February, with short interest making lower highs and lower lows (as shown by the red trendlines).

However, recent activity shows shorts have added over 15MM shares to their positions, breaking short interest out of the downward trend.

Short interest has rebounded to 81MM shares, hitting the last lower high from mid-December, suggesting a bearish trend.

TSLA is more volatile than NVDA, AAPL, and MSFT, but its short value risk is not higher.

TSLA shorts have made $10B YTD, significantly more than NVDA, which is only down 10%.

Analysts are currently recommending to sell TSLA stock, with 20% of analysts supporting this view.

TSLA has faced bad news this year, most recently the recall of all Cybertrucks. Additionally, Chinese rival BYD has topped $100B in annual sales, a milestone TSLA has not yet reached.

Negative news sentiment (below 0.00) is positively correlated with rising short interest, as shown in the graph.

Tesla’s stock decline has reignited short interest, reversing a months-long downtrend in bearish positioning. While Tesla remains more volatile than its tech peers, short value risk remains stable. With analysts increasingly negative and competitive pressures mounting, TSLA bears appear to be in control as sentiment and fundamentals weaken.

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