Tesla's impressive rally in the stock market following the release of its Q2 2024 vehicle delivery and production report has led to significant losses for hedge funds that had short positions on the electric vehicle maker. In just three days, Tesla gained a staggering $150 billion worth of valuation, leaving short-sellers reeling from their failed bets.

According to a Bloomberg News report, at the end of Q2 2024, approximately 18% of the more than 500 hedge funds tracked by data provider Hazeltree held a short position in Tesla. This figure marks the highest percentage in over a year, showcasing the mounting skepticism surrounding the company. In comparison, during the first quarter of 2024, only 15% of hedge funds had a short position against Tesla.

The release of Tesla's Q2 2024 vehicle delivery and production report exceeded Wall Street's expectations, causing the company's shares, listed as NASDAQ:TSLA, to surge. Within just two trading days, the stock climbed by 17%, resulting in short sellers facing estimated losses of $3.5 billion on a mark-to-market basis, as reported by CNBC.

Elon Musk, the CEO of Tesla, couldn't resist a little gloating over the hedge funds' misfortunes. Taking to social media platform X, Musk posted a crying face emoji in response to the news of their losses.

In recent months, Tesla has faced its fair share of challenges. The company's Q1 2024 vehicle deliveries fell below market expectations, and it had to carry out significant job cuts during Q2, which led to the departure of key executives. Rumors also circulated that Musk would leave the company if shareholders did not approve the proposed CEO Performance Award. Given these adversities, it is not surprising that the short-sellers became increasingly interested in taking positions against Tesla.

Investors and analysts now eagerly await Tesla's Q2 2024 earnings call, scheduled for Tuesday, July 23, 2024, at 4:30 p.m. CT (5:30 p.m. ET). During the call, the company is expected to discuss the results of the Q2 2024 Update Letter, which will be released on the Investor Relations website after the end of trading on July 23. As the earnings call approaches, market participants will be closely watching to see how Tesla's success in the second quarter translates into the financials.

Despite the skepticism and challenges faced along the way, Tesla has managed to rally in the stock market, leaving hedge funds with significant losses. Whether this momentum will continue or not remains to be seen, but the electric vehicle giant has undoubtedly made its mark in the industry.