Short sellers profit billions from Tesla in 2025 as stock drops by 44%

Short sellers are cashing in on Tesla’s plunging stock value in 2025, with a significant 44% drop since the year’s outset, currently resting at $227.50. Consequently, the long-term shareholders are experiencing frustration while the short sellers are enjoying a profitable time.

Tesla has lost its stronghold in the top stock due to successfully shorted stocks as data from S3 Partners reveal a remarkable $11.5 billion profit has been made by Tesla short sellers this year. In the U.S, Tesla is now the third most-shorted stock, following Nvidia and Apple, with $17.6 billion in short positions.

The gears have shifted for those who have long bet against Tesla, with Wall Street critics now finding their predictions accurate as Tesla’s stock falls. With the reasons ranging from fierce competition in the electric vehicle sector to overall market pressures, critics against Tesla are now reaping the rewards of their foresight. The decline in the stock price has marked a highly profitable period for those short-selling Tesla.

Tesla’s CEO, Elon Musk, is infamous for his hostility towards short sellers, often ridiculing them with playful hostility. Musk’s taunting antics peaked in 2020 when Tesla’s stocks were rising, and he launched limited red satin shorts on the company’s website to prank those who had suffered significant losses betting against Tesla. Musk even directed his humor at David Einhorn, a hedge fund manager and known Tesla short, who admitted his losses from shorting Tesla were substantial. In response, Musk sent Einhorn a pair of the notorious red shorts, which he graciously thanked Musk for on Twitter.

This comical interplay between Musk and short sellers isn’t solely confined to online banter; it extends to the legal arena. The U.S. Department of Justice initiated an investigation in 2022 concerning allegations of market manipulation through short-selling Tesla stock. Musk stood behind this investigation, praising its initiation publicly. Musk has a talent for personalizing Tesla’s market-oriented stories, often positioning short sellers as adversaries to progress and retail investors.