Short sellers of Tesla saw a decrease of $3.5 billion in value over a span of two days following Q2 deliveries.

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An electric car model Y is showcased during the commencement of production at Tesla’s “Gigafactory” on March 22, 2022, in Gruenheide, southeast of Berlin. – US electric auto pioneer Tesla received approval for its “gigafactory” in Germany on March 4, 2022, finally paving the way for production to commence shortly following an approval process plagued by delays and setbacks.

Tesla’s exceptional deliveries report this week has been unwelcome news for traders expecting a fall in the electric vehicle manufacturer’s stock. With shares surging by 17% in the two trading days since the second-quarter report, short sellers have faced an estimated $3.5 billion hit on a mark-to-market basis, as per data from S3 Partners.

Short interest in Tesla currently sits at 3.5% of float, equating to 97 million shares shorted, with a notional value of $22.4 billion.

Tesla disclosed second-quarter deliveries on Tuesday of 443,956, surpassing Wall Street estimates of 439,000. Despite deliveries dropping by 4.8% from a year earlier, the decline was less steep compared to the 8.5% year-over-year drop in the first quarter.

Moreover, Tesla’s revenue report later this month is anticipated to offer a clearer picture of the company’s financial well-being. Analysts predict a 2.9% revenue decline to $24.2 billion following a 9% decrease in the first quarter.

Tesla CEO Elon Musk, whose net worth surged by approximately $15 billion in the past two days, hailed the blow that short sellers are enduring, including a personal jab at Microsoft co-founder Bill Gates, a historical shorting opponent of Musk.

Musk has put forth a vision where Tesla’s humanoid robot, Optimus, currently under development, will revolutionize the company and lead it to a valuation worth tens of trillions of dollars. Tesla’s current market cap falls below $800 billion.

On another note, Tesla’s hurdles in its core automotive business persist. The company recurrently introduces enhancements to its in-vehicle software; a new update is expected to introduce YouTube, Amazon Music, as well as weather and air quality apps to drivers’ infotainment systems.

Meanwhile, a recent Axios-Harris poll uncovered that Tesla is facing brand deterioration attributed, at least partly, to Musk’s “antics” and “political rants.” A survey by The New York Times also revealed that Musk’s “polarizing statements” and “political activity” are repelling some “left-leaning consumers.”

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