Check information and market trends on Eastmoney. Choose Eastmoney Securities for one-stop account opening and trading.>> Since the result of the US presidential election was announced and former US President Donald Trump declared victory, Elon Musk, the CEO of Tesla and a major financial backer of Trump’s campaign, has also won big. As of the close of the US stock market last Friday, Tesla’s stock price soared 8.
19% in a single day, and its total market value firmly stood above the $1 trillion mark again. Musk’s net worth also reached the $300 billion mark again after nearly three years. This has cost hedge funds that have been persistently shorting Tesla billions of dollars. Media calculations based on data compiled by S3 Partners show that in just a few days from last week’s election day to Friday’s close, hedge funds shorting Tesla suffered at least $5. 2 billion in paper losses. It is worth noting that Tesla’s performance and the entire US electric vehicle industry are not optimistic. Therefore, analysts believe that Tesla’s stock price recovery is only because Musk heavily bet on Trump’s presidential campaign. Data shows that during this election cycle, Musk provided over $130 million in funds to Trump and other Republicans. In addition, Musk frequently campaigned for the Republicans on his social media network X and attacked Democrats. Trump has repeatedly mentioned that he will appoint Musk to lead the “Government Efficiency Committee”. Some analysts say that the power Trump promised to Musk is very substantial, as the former clearly stated that he plans to reward loyal people. Edward Lees, a portfolio manager at BNP Paribas Asset Management, said that Musk “now has influence that serves as a bridge between the tech world and Washington. ” He said that he “has held Tesla shares at different times” but did not elaborate on his current position.Hedge Funds Hastily Reverse Course
Since the official election on November 5, Tesla’s stock price has risen nearly 30%, and its market value has increased by over $200 billion. Against this backdrop, hedge funds that previously shorted the company have since changed their direction. Weekly data provided by Hazeltree, which tracks the positions of more than 500 hedge funds, shows that as of November 6, only 7% of hedge funds were net short on Tesla, down from 17% at the beginning of July. Per Lekander, CEO of hedge fund management company Clean Energy Transition, said that he “slightly shorted Tesla before the election”.However, he later managed to reduce his position “quite a lot”, which meant his losses were ultimately “quite small”. “But we lost some money,” he said.
Lekander said he believes the Trump effect accounts for about one-third of Tesla’s current share price of over $300. He said, “So now Tesla’s stock is more like a gamble on how much Trump can help Elon.” Risks Remain As the market digested the news of Trump’s victory, renewable energy stocks from wind to solar began to decline, as people worried that Trump would fulfill his promise to cut clean energy incentives. Lekander said that more than a year later, he expects even Tesla to feel the sting of Trump’s anti-climate policies. He explained that despite the connection between President-elect Trump and Musk, “Trump’s victory is very negative for Tesla as an automotive company.” “Within about 12 to 18 months, the Trump administration will remove many of the subsidies that Tesla has truly benefited from,” he added. Brand new innovative investment research assistant, experience it now! (Article source: Cailian Press)
