Short-sellers are again at the short end
Finweek English|24 September 2021
Short-sellers have hoped that a tighter US monetary policy would pull back equity shares, but to no avail. Why is a long view the better option for now?
Maarten Mittner

The latest signals from the US Federal Reserve have reassured equity markets that the central bank will not act rashly with its tapering objectives.

Disappointing US job creation numbers has resulted in further caution, while the Delta variant of the coronavirus could cause further disruption over the Northern winter.

The Fed’s message was that monthly bond purchases may be reduced at year-end, but it will be gradual and must not be seen as indicative of any imminent hiking of interest rates. Large tech companies’ stocks surged on the development, presenting another blow to short-sellers, who hoped that a tighter monetary policy would pull back equity shares, mostly Big Tech, from their present highs.

Apple reached new heights, increasing its market cap to $2.6tr, while Microsoft, Amazon and Tesla all gained ground on the pronouncements from Fed chair Jerome Powell.

Short-selling is a way of making money when stocks appear to be overvalued and could be due for a downward correction. Some analysts regard Tesla as way too expensive, as its intrinsic value is calculated at about $150 per share. But it is now trading at upwards of $700. Should it dip and fall to a value more closely correlated with its intrinsic value, short-sellers are set to make big money by buying shares at cheaper levels, like buying a house at R1m that previously cost R5m.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM FINWEEK ENGLISHView All

Delay, Save, Buy, Repeat

Take a journey to see how delaying big purchases can impact a person’s financial wellbeing.

8 mins read
Finweek English
8 October 2021

SA's Top Equity Funds

Generating alpha amidst a market-wrenching pandemic has been a challenge and a half for many fund managers.

9 mins read
Finweek English
8 October 2021

Behind South Africans' ability to save

Poverty should be considered when discussing South Africa’s saving culture.

6 mins read
Finweek English
8 October 2021

Estate headaches

It’s not always easy to wind up an estate. Sometimes problems and disputes arise, and according to experts, most of them can be prevented.

6 mins read
Finweek English
8 October 2021

It's not about you!

Why we need a broader lens to address the issue of debt in individuals.

7 mins read
Finweek English
8 October 2021

Combing through the financial results

The balance sheets, income statements and cash flow statements of companies are key documents to gain insight into their health and future.

3 mins read
Finweek English
8 October 2021

Exxaro's new strategy

The coal producer has announced that the group would target acquisitions in bauxite, manganese and copper.

3 mins read
Finweek English
8 October 2021

The battle between active and passive

Some considerations in the decade-old debate remain important.

4 mins read
Finweek English
8 October 2021

Showing signs of an exhausted run

Clicks is a provider of health and beauty merchandise and is the largest retail pharmacy chain in South Africa. The company also owns the pharmaceutical wholesaler United Pharmaceutical Distributors (UPD).

2 mins read
Finweek English
8 October 2021

Will taxing chrome ore backfire?

David Kovarsky, spokesman for ChromeSA, answers questions on government’s proposed chrome ore tax.

3 mins read
Finweek English
8 October 2021
RELATED STORIES

US REGULATORS SEEK ANSWERS FROM TESLA OVER LACK OF RECALL

U.S. safety investigators want to know why Tesla didn’t file recall documents when it updated Autopilot software to better identify parked emergency vehicles, escalating a simmering clash between the automaker and regulators.

4 mins read
Techlife News
October 16, 2021

Down to Their Last Dollar

Businesses fail every day, from world-beaters (like TWA and Lehman Brothers) to sexy high-fliers (DeLorean, Enron) to Steady Eddie, old-school icons (Toys “R” Us, Sears). Sometimes, of course, market conditions simply turn Sisyphean. But often, when that boulder starts to roll backward, a leader’s grit, imagination, resourcefulness, and ability to conjure a little luck can mean the difference between a brave new chapter and, well, Chapter 11. Here, four businesses that went from nearly bust to total gangbusters.

3 mins read
Inc.
October 2021

TESLA REPORTS STRONGERTHAN-EXPECTED Q3 SALES

Tesla says it delivered 241,300 electric vehicles in the third quarter even as it wrestled with a global shortage of computer chips that has hit the entire auto industry

1 min read
AppleMagazine
Ocotber 08, 2021

HOW TO INVEST IN CRYPTOCURRENCY WITHOUT BUYING ANY

Cryptocurrencies are inherently cryptic — it’s right there in the name. And if you follow Warren Buffett’s advice to never invest in businesses you can’t understand, it may be hard to justify investing in a currency made of math instead of gold.

3 mins read
AppleMagazine
Ocotber 08, 2021

El futuro es eléctrico

Una revolución ecológica en los viajes ha comenzado: los automóviles con baterías modernos se venden con rapidez y los aviones de cero emisiones están a punto de llegar.

10+ mins read
National Geographic en Español
Octubre 2021

Keep Current with Facts About Electric Cars

13 THINGS

4 mins read
Reader's Digest US
October 2021

TESLA BUILDS 1ST STORE ON TRIBAL LAND, DODGES STATE CAR LAWS

Carmaker Tesla has opened a store and repair shop on Native American land for the first time, marking a new approach to its years-long fight to sell cars directly to consumers and cut car dealerships out of the process.

3 mins read
Techlife News
Techlife News #516

FORD HIRES EXEC FORMERLY IN CHARGE OF APPLE'S CAR PROJECT

Ford Motor Co. has hired a former executive from Apple and Tesla to be the company’s head of advanced technology and new embedded systems, a critical post as the auto industry moves to adopt vehicles powered by electricity and guided by computers.

1 min read
Techlife News
Techlife News #515

US ASKS TESLA HOW AUTOPILOT RESPONDS TO EMERGENCY VEHICLES

The U.S. government’s highway safety agency wants detailed information on how Tesla’s Autopilot system detects and responds to emergency vehicles parked on highways.

2 mins read
Techlife News
Techlife News #514

TESLA ROBOT

THE NEXT BREAKTHROUGH FOR AI HAS BECOME REAL

6 mins read
AppleMagazine
August 27, 2021