Hedge fund managers are set to lose hundreds of millions Thursday because of their bet against Tesla, according to financial technology firm S3 Partners.

Tesla shares were up more than 6 percent in premarket trading Thursday following a narrower-than-expected second-quarter loss.

The electric car maker led by outspoken CEO Elon Musk is the most heavily shorted U.S. stock. Short interest, or the number of shares borrowed in hopes of buying them back at a profit after the stock drops, totals $9.03 billion for Tesla, according to S3 Partners. That’s $2.4 billion larger than second place AT&T’s short interest.

Source: S3 Partners Research

After Tesla popped 3 percent in after hours S3 on Wednesday evening calculated that shorts were down $286 million in their position. But with Tesla set to gain even more, those losses will be even bigger than first estimated.

Tesla bears were down $3.64 billion in mark to market losses in 2016 and the first half of 2017, as the total short exposure increased 49 percent, noted Dusaniwsky.

However, the July to August month to date time period was better for the skeptics as they were able to recover over $1.1 billion of their mark to market losses.

Source: Tech CNBC
Hedge funds set to lose hundreds of millions on wrong-way bet against Tesla