Thursday 14 September 2017

Tesla Stock and Rocket Man's Incentive

At some time, 28.7M shares of Tesla common stock (TSLA) must be purchased in the open market by the short interest, which is ~$10,390,659,760 of buying power. If Rocket Man shorted $1B worth of TSLA at today's close and put the price up 10 by bidding to cover, he would lose $28M on the trade, however, his total net worth would increase by $382M, and presto: a $354M net profit or >1,200% risk adjusted return, by shorting your own stock. A thing of beauty.