The hedge funds betting against Tesla suffered billions of dollars in losses because of the unique bond between Elon Musk and the president-elect. Acc
The hedge funds betting against Tesla suffered billions of dollars in losses because of the unique bond between Elon Musk and the president-elect.
According to Bloomberg calculations based on data compiled by S3 Partners, hedge funds that had short positions against Tesla between election day and Friday’s close suffered an on-paper hit of at least $5.2 billion.
Musk’s support of Trump on July 13 coincided with that shift in stance. Tesla’s chief executive has become Trump’s biggest admirer among the ultra-rich.
Musk is one of the largest donors to the 2024 election because he has boosted Trump’s campaign with his wealth as the richest person in the world. Musk positions himself for apolitical influence by siding with the president-elect since Trump has made it apparent that he intends to reward loyalists.
Musk has advocated for a position in Trump’s administration that would enable him to reduce waste and bureaucracy in what he describes as the government. Musk’s “position of influence now is sort of a bridge between, arguably, the tech community and Washington,” according to Edward Lees, portfolio manager at BNP Paribas Asset Management. Trump swiftly seized on the idea, openly teasing the idea of a position as “Secretary of Cost Cutting.”.
Musk has seen his fortune soar with the election outcome since he openly threw his support behind Trump after the then-presidential candidate escaped an assassination attempt in July.
Bloomberg Billionaires Index showed Elon’s net worth increased by over 480 billion in the days after the election due to the spike in Tesla’s stock price. This comes after Musk, the owner of an empire that includes X and Space X, spent over $130 million on Trump and other Republicans running in close House races.
The KraneShares Electric Vehicles and Future Mobility Index ETF’s performance indicates that the broader EV industry has lost over 12 percent this year. That comes after a roughly 9% drop in 2023. In contrast, after doubling its value last year, Tesla is up about 30% in 2024.
Tesla’s performance is particularly noteworthy when compared to other green stocks. Amid concerns that Trump would fulfill his pledge to reduce clean-energy incentives, renewables stocks, ranging from wind to solar, began to plummet as markets processed the news of Trump’s victory.
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