Yes, I understand (in theory only) how one can profit in a well-timed short-term "short" investment in a stock.
What I do
not understand is those short-sellers who treat TSLA as a long-term investment. Maybe there are not a lot of those, but they seem to be a large proportion of the loudest voices among the anti-Tesla crowd, because we see the same comments being repeated under the same screen names for years, both at investor sites such as Reeking Alpha and Yahoo Finance, as well as on EV forums like this one. Well, not so much on this forum; I think so-called "TeslaInvestors" is the only long-term Tesla basher who still posts regularly here. The others disappeared shortly after Tesla started showing strong quarterly profits.
But in comments to InsideEVs news articles, atho the volume of Tesla hater comments certainly has dropped after Tesla started showing strong net profits, we still see the occasional serial Tesla basher posting. In fact, the professional Tesla basher who goes by "tftf", one of the most long-term and most prolific posting to Reeking Alpha, posted multiple anti-Tesla FUD comments just today.
But back to the subject at hand: Isn't a long-term "short" investment in TSLA guaranteed to lose money? I'm not an investor myself, but what I've read is that there is literally no limit to the amount of money one can lose in a "short" investment, while the amount of money one can win most definitely is limited.
Maybe some of those short-sellers who regularly parrot anti-Tesla pravduh do regularly cash out and then buy back in on borrowing Tesla shares to bet against. But their monotonous drumbeat of "Tesla is on the verge of failing" seems to indicate otherwise. If they cashed out, wouldn't they then want the stock price to go up again before buying it, in the hope it would then go down? So why don't they flip-flop, alternating between Tesla cheerleaders and Tesla bashers?
It would make financial sense if they were to have two screen names; one used for cheerleading and the other for bashing. But they don't; they just keep bashing all the time. Some on Reeking Alpha posts dozens or scores of Tesla hater posts every day, almost without fail! And some of them have been doing that literally for years.
I just don't get it. Maybe they are getting paid to shill for those with financial interests in seeing Tesla fail, such as Big Oil and its "think tank" propaganda mills. Russian troll farms are a possibility, too; unfortunately, those working for Russian troll farms are increasingly seen posting on just about any controversial or divisive issue.
Or... perhaps I'm trying to find a rational motive for irrational actions; maybe they (or some of them, anyway) really are as far removed from reality -- clinically insane -- as some of their comments suggest.
I don't know the personal philosophies or psychology of professional shorts. The most notorious that I know of Chanos is short specific to China, and has been for years and years, so long so it defies any rational basis. On the opposite side long, is a guy who is all in on gold, long gold, and has been for almost the same amount of time. A particular psychological type seems to be found in both, short and long holders. They both act the same in their approach and manner. Differing entirely in specific, one is long gold and the other short China, but they both psychologically seem the same is my point. Talking head shows in the industry trot out these guys if their play seems to make sense for a brief moment or two. Mostly they are all known as jokes though both rich and successful at times.
Is there a industry bias against tesla...certainly there has been. That is a known proven. Now I think it has by system devolved, it is more company against company, as all are into electric.
Shorts tend to specialize in shorting, not going long nor appreciating stock valuation. It is just not what they do. Regular investors go both short and long and have all sorts of variance. Sans a dividend paying stock there may be no real loss to a short holder. Put dividends into the mix and it curtails the duration of the hold immensely. Someone has to cover the dividend.
There may be motives that are not known by us and are remote from normally considered rational. Not related at all but it serves as example. A company such as soda stream, which in the past used settlers, lands occupied by israelies as part of their workforce, may attract a short interest that defies logic, as its basis is not of the economic but political. Those against the occupation and thus the stock(I think they are not doing that now). Things from some past or some past history of the particulars involved may hold burdens some think need to be paid.
Why back in the day has Microsoft always been the subject of hackers and all that, and apple not so much. Is it that MSFT is so much worse at things, or is it as internet parlance has it, Gates back in the day used common technology on a open, (back in that day) university forum connected medium for his own patentable interest. And thus since this community was also that of the hackers, the subject of their hacking. This from the day he announced his intention and was informing all to cease and desist as he now was furthering patent claim. And then Steve Jobs and the creation of apple as well as result. True or not the idea of that persists.
Again not related, but related in a way. Shorts may have some things known of or suspected to be true, as motive, we just are not purview to and they will hence fighting for in their eyes truth justice and the American way, never stop.
Match that with a psychological type and I think that is it. Since you asked, I again am no authority in this at all. I have traded a lot and still hold things, but in general these are not nice people to my opinion and the investments are very difficult to isolate from environment degredation or other nefarious result. . So I try not to look at them at all, nevertheless find out why they do what they do.
Shorts ultimately they aim to devolve a stock value to bankruptcy. That is typically their ultimate aim with most corporations. I think most justify that by saying...look they did this or that plainly false information they must be punished killed off. That to my opinion is often rationalization for wanting to kill completely a thing in this specific, a corporation or other.
Stocks are reflective of business and even the best of players does things not right at times. So they are found and then they are used to justify action. I guess they just enjoy it. But it is a guess I am not one. Things used to be in place which required moving out of a short hold when certain limits were reached. Now short holds may go all the way to the state of bankruptcy.
Reeking alpha, that reminds me of a company that acts in concert with one of the talking heads who appreciates stock prices for specific companies, before they come in for the strike and act with some specific knowledge discloseur which will result in a known stock drop price. Improving their profit margin. The drop is often pretty close to the recent appreciation. The whole thing being orchestrated in a way. But that one company is not just shorting.
So it is if such things were occurring would make it a veritable cesspool. I do not claim to know if they are or not but to state I suppose they are and that mention only brought up that memory not that it is that nor similiar.
The whole industry is corrupted and completely to my opinion. I endure it as I have had to at times.
With so much short interest Tesla is risky, has to be. Great gains may be in the offer but really it is with such a degree at great risk. It is not a car company as its valuation speaks not of any car production numbers. Like amazon was as well not a book company, but that is as it was thought for quite a while. So is misread to my personal opinion.
So on your example.... a company who is in the business of shorting would be using other mean to appreciate stock value of intended targets which are not them nor can be traced to them. I would approximate legal hazard may present if one just used different names perhaps to present opposing views and reap consequent profit.
I have five completely filled envelopes on my desk right now, all of which are in relation to potential law suits against one corporation I have held. I get such every year, for various reasons and all sorts of cause. So those in this field may have to be quite attentive as to how they do things to not threaten legal course.
I throw them away as if the company treated me well they deserve not that. But most do not. So cautions are endeavored.
I will add a tiny bit of political here. I have personally used litigation having appeared in court once thirty years ago. Corporation utilize our legal system at least annually, formally, all of them the big ones. Taxes fund our legal system completely and equal tax rates for the general public and corporation make no sense at all.
It is amount of use is the thing and we are not equally using that and similar things. Like justification for those of differing income is also presently found always. Involved in stocks commodities, you are involved in litigation always.
