Citron's Tesla U-turn dealt short sellers a $1.11 billion loss
NEW YORK (Reuters) - The sharp surge in Tesla Inc's share price on Tuesday slammed short sellers of the stock with $1.11 billion in losses for the day on paper, pushing their performance for the year into the red, according to financial analytics firm S3 Partners.
Tesla shares jumped 13 percent on Tuesday after long-time critic and short-seller Citron Research said it had a change of heart and is now betting the electric-auto producer's stock will rise.
Tuesday's sharply higher Tesla stock price turned what had been a profitable year for short-sellers into paper losses totaling $257.3 million so far in 2018.
Short-sellers aim to profit by selling borrowed shares with the hope of buying them back later at a lower price.
As of the close of trading on Tuesday, Tesla short interest stood at $9.94 billion, with 33.79 million shares shorted, or about 26.5 percent of the company's float, according to S3 data. That made it the most shorted U.S. stock, according to S3 data.
Tesla, which scheduled its earnings release earlier than usual, is expected to post third-quarter results on Wednesday.
Chief Executive Elon Musk has pledged to report quarterly profits in the second half of this year as the company gained traction with production, and deliveries, of its new Model 3 sedan.
On Wednesday morning, Tesla shares were 1.8 percent lower at $288.77.
Reporting by Saqib Iqbal Ahmed
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