By Lucinda Shen
July 2, 2018

No matter how bizarre, Tesla CEO Elon Musk’s warnings to investors who bet against his company have been prescient.

The carmaker’s short sellers, those who put money on a stock declining in value, lost roughly $2.5 billion on paper in the month of June, according to data from Ihor Dusaniwsky, managing director of predictive analytics at financial technology firm, S3 Partners. The declines come due to a 18% increase in Tesla shares during the month.

That tally of short seller loses came before news that Tesla had reached its production target of 5,000 Model 3 vehicles a week in the final stretch of the second quarter. Investors have closely watched the Model 3’s development, considering it an important opportunity for Tesla to reach a broader market. Notably, its base price is $35,000, less than half of the Model X’s during its debut.

Tesla’s shares sank 1% on Monday amid the news about the production milestone, giving short sellers some modest relief.

“I think we just became a real car company….,” Musk wrote in an ebullient note to employees in response to increasing production.

The losses shorts have experienced seems to back up Musk’s threat mid-June on Twitter, in which he cautioned investors betting against his firm have “about three weeks before their short position explodes.” Critics have long questioned the company’s ability to reach its production targets, with investors growing even more concerned following a strange first quarter earnings call in May. During that call, Musk lashed out at Wall Street analysts who asked about the company’s quickly vanishing cash reserves, dubbing such queries as “boring, bonehead questions.”

Still, Tesla’s skeptics appear little moved by its most recent news that the carmaker had met production targets.

“Looks like the shorts who have had conviction all along are standing pat,” Dusaniwsky wrote in an email to Fortune, noting that about short interest in the company now accounts for 27.5% of the number of shares available for trading.

And there is basis for doubt. Though the company has managed to meet its production targets, investors still worry about the company quickly burning cash. As pointed out by New York University finance Prof. Aswath Damodaran, while Tesla’s revenue has grown in the last three quarters, “losses are growing proportionately,” placing its profit margin at about -23% during those periods. CFRA Research, an investment research firm, also questioned Tesla’s ability to maintain its rate of Model 3 production, downgrading the stock to “sell” from “hold.”

But Musk appears to be trying to turn that negative into a positive by slashing 9% of its workforce in June in an effort to cut costs.

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