Datastream
Tesla Bears: A Short Short Story
The Briefing
- Tesla, Inc has gained infamy for the sheer depth of short seller activity on its stock. At its peak in 2019, over 200 million shares were short
- However, short sellers have recently capitulated, thanks to Tesla’s monster year
- TSLA shares are up roughly 600% YTD
Tesla Bears: A Short Short Story
Short selling is often said to be the Wild West of financial markets. Where there’s a short seller, there can be whipsawing asset prices just around the corner. Tesla is no exception.
In some cases billions of dollars pour behind these short ideas—conducted by some of the world’s most sophisticated investors.
The efficient market hypothesis suggests short selling is a necessary evil that helps the market reflect on all the information of a given security and obtain its true market value. Yet most market participants are anything but receptive to short sellers.
The market—which tends to be long, often panics when a short seller enters the arena and takes the opposite stance. What typically follows is an avalanche of legal and regulatory action from corporate lawyers to the SEC.
In the case of Tesla, short sellers couldn’t have gotten it more wrong – at least for now. Some market commentators call it the most unprofitable short witnessed. The data shows that approximately 20% of Tesla shares have been held short since 2016. This year a reported $27 billion has been lost betting against Tesla.
| Date | Shares Sold Short | Dollar Volume Sold Short |
|---|---|---|
| October 30th, 2020 | 47,800,000 | $19 billion |
| October 15th, 2020 | 52,960,000 | $22 billion |
| September 30th, 2020 | 57,130,000 | $25 billion |
| September 15th, 2020 | 59,040,000 | $24 billion |
| August 31st, 2020 | 54,890,000 | $20 billion |
| August 14th, 2020 | 12,310,000 | $5 billion |
Tesla’s short thesis is often anchored around a few compelling narratives. The first is that Tesla’s present day fundamentals are poor—a $530 billion company delivered 139,300 vehicles in Q3’20 and turned a $331 million profit. That’s after government subsidy programs.
The second, the electric vehicle market is expected to be competitive with many players, and short sellers make the point Tesla is currently priced as the sole-winner in this space.
We don’t know how the future EV market will transpire, but with Tesla shares up 600% year-to-date, and with the company set to join the S&P 500, some bears look to be calling it quits.
Where does this data come from?
Source:Ycharts
Notes: Financial data is as of December 2nd, 2020
Datastream
Ranked: The Top Online Music Services in the U.S. by Monthly Users
This graphic shows the percentage of Americans that are monthly music listeners for each service. Which online music service is most popular?
The Briefing
- Two-thirds of music listeners in the U.S. used YouTube at least once per month
- 64% of music listeners use multiple music services per month
The Top Online Music Services in the U.S.
The music streaming industry is characterized by fierce competition, with many companies vying for market share.
Companies are competing on multiple fronts, from price and features to advertising and exclusive content, making it a challenging market for companies to succeed in.
YouTube (the standard offering and YouTube Music) has the highest amount of users, attracting around two-thirds of music listeners in the U.S. during a given month. This is largely due to the YouTube’s massive reach and extensive catalog of music.
Here’s a full rundown of the top music streaming services in the U.S. by monthly listeners:
| Rank | Music Service | % of U.S. Music Listeners Who Use Monthly |
|---|---|---|
| #1 | YouTube | 61% |
| #2T | Spotify | 35% |
| #2T | Amazon Music | 35% |
| #4 | Pandora | 23% |
| #5 | SiriusXM | 21% |
| #6 | Apple Music | 19% |
| #7 | iHeartRadio | 15% |
| #8 | SoundCloud | 10% |
| #9 | Audacity | 6% |
| #10T | TuneIn | 5% |
| #10T | Deezer | 5% |
| #10T | Napster | 5% |
| #10T | Tidal | 5% |
Two companies are in the running for second place: Spotify and Amazon Music.
Spotify leads in one important metric: number of paid users. Meanwhile, Amazon Music has a large user base since the service is bundled into Prime—however, recent changes mean that without a premium subscription, shuffled playback is the primary option. Time will tell what impact those changes will have on the service’s market share.
Prices for premium music services are beginning to creep upward. Apple Music and Amazon Music raised their prices, and it’s rumored that Spotify will not be far behind. This move would be significant because, in the U.S., Spotify hasn’t raised its prices in over a decade.
Rising prices and more aggressive promotion of premium subscriptions could be a signal that music streaming services are transitioning from a focus on capturing market share to monetizing existing users.
Where does this data come from?
Source: Activate Technology and Media Outlook 2023 by Activate Consulting
Data note: “Music services” include free and paid services used for listening to music through any format excluding terrestrial radio. “Music listeners” are defined as adults aged 18+ who spend any time listening to music.
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