Elon Musk's support for Trump has brought him both fame and fortune, significantly increasing his political influence and continuously appreciating his wealth, while Tesla's stock price has soared. In contrast, the hedge funds opposing Musk have suffered greatly.
On November 11, according to data from S3 Partners, from the U.S. election day (November 5) to last Friday's close, hedge funds shorting Tesla have incurred at least $5.2 billion in paper losses. Since election day, Tesla's stock price has risen nearly 30%, and its market value has increased by over $200 billion.
In light of this dramatic shift, hedge funds that previously shorted the stock are now withdrawing their short positions.
Data from Hazeltree shows that over the past four months, many hedge funds have closed their short positions on Tesla, a move that aligns with Musk's public endorsement of Trump on July 13. As of November 6, only 7% of hedge funds were net short on Tesla, down from 17% in early July.
Tesla's CEO Musk has become one of Trump's largest billionaire supporters. As the world's richest person, Musk has used his wealth to promote Trump's campaign, making him one of the largest donors in the 2024 election. Now he stands alongside the elected president, ready to seek political influence.
<h2>Overall Poor Performance of the Electric Vehicle Industry, Tesla Turns the Tide</h2>
The electric vehicle industry has performed poorly this year. According to the performance of the KraneShares Electric Vehicle and Future Mobility Index ETF, this sector has declined over 12% this year, and about 9% in 2023. In contrast, Tesla has risen about 30% this year.
Despite the electric vehicle industry facing adverse factors such as trade tensions, weak consumer demand, and intensified competition, Tesla remains a stock that is difficult to short. In July of this year, nearly one-fifth of the hedge funds tracked by Hazeltree held short positions on Tesla, but as the company's stock price surged, short sellers were caught off guard.
Tesla's performance has also significantly outpaced other green energy sector stocks. Following the news of Trump's victory, during the market's digestion period, stock prices of renewable energy companies, from wind to solar, began to plummet, as investors worried about Trump fulfilling his promise to cut clean energy incentives

TSLA

Trump's victory caught hedge funds shorting Tesla off guard, resulting in at least a loss of $5.2 billion in just one week. Hedge funds are also withdrawing their short positions, with Tesla's short interest dropping from 17% in early July to 7%

- Elon Musk's support for Trump has significantly increased his political influence and wealth, with Tesla's stock surging nearly 30% since the election day on November 5.  
- Hedge funds that shorted Tesla have faced substantial losses, totaling at least $5.2 billion, prompting many to close their short positions as the stock's value rose.  
- Despite a challenging year for the electric vehicle industry, Tesla has outperformed its peers, while concerns about Trump's potential impact on clean energy incentives have led to declines in renewable energy stocks.

Hedge funds shorting Tesla have already lost $5 billion in this wave