By Nell Mackenzie
LONDON (Reuters) - Tesla (NASDAQ:TSLA) topped a list of the most shorted large-cap U.S. stocks for a third consecutive month in August, securities lending data firm Hazeltree said in a report on Tuesday.
Tesla stock rallied over 5% on Monday after a Morgan Stanley (NYSE:MS) note suggested the automaker's Dojo supercomputer could bolster Tesla's market value.
A short bet expects a stock price to fall.
Hazeltree, which tracks 12,000 equities globally, said the second and third most shorted stocks last month were Charter Communications (NASDAQ:CHTR) and Apple (NASDAQ:AAPL) respectively.
Tesla, Charter Communications and Apple did not immediately respond to requests for comment.
Data compiled by research firm Whale Wisdom showed a range of different strategies underlying short bets against Tesla disclosed to the Securities and Exchange Commission on June 30.
Those included investors with funds taking long and short positions in stocks: Diamond Hill, Leuthold Funds and Forum Funds. A Blackstone (NYSE:BX) fund of funds contained the short positions of other hedge funds and investment managers.
Trades held by the hedge fund AQR Capital Management and the investment manager Federated Hermes aimed to avoid market risk by offsetting rising and falling prices on different asset classes.
Tesla's CEO Elon Musk on Monday posted on his social media platform X a reaction to the short position that Microsoft (NASDAQ:MSFT) co-founder Bill Gates has held against the firm, according to a recent biography of Musk by Walter Isaacson.
"Taking out a short position against Tesla, as Gates did, results in the highest return only if a company goes bankrupt!" posted Musk.
Hedge funds have been shorting U.S. stocks at a rapid pace in recent weeks, a Goldman Sachs (NYSE:GS) note this week showed, and total short bets reached their highest value in six months.
Hedge funds were net short consumer discretionary stocks, which would include Tesla, for the year ending Sept. 8, according to the Goldman note.
"If I'm honest, I've only lost money trying to short TSLA," said Dan Izzo, founder of the hedge fund Blackbird Capital, who did not disclose whether he currently had a position in Tesla.
"Not because I'm wrong about it, but because the market can be irrational for longer than I can afford to be proven right."