There's $10B in TSLA short positions, when the numbers get this big its not unthinkable.
If anything, with such a large volume short, a short squeeze is a serious likelihood in the near future.
Yes, it's unthinkable. If a $10 billion short were to even marginally pay off, regulators would dig deep. Anyone with that kind of cash on hand is savvy enough to know that. Sabotaging a visible company, with lots of stockholders and lenders and bankers standing to benefit from the company's success, to pay off a short is something that sounds plausible in fiction but is boneheadedly moronic in real life.
If you're curious, read Fooling Some People All of the Time by David Einhorn, who ironically, is short Tesla.
Whenever an outsized high-risk position pays off, multiple regulators--at the SRO, state and federal levels--investigate. Mostly for insider trading. Sometimes in response to investor complaints or broker arbitration proceedings.
These are well-paid professionals at the SEC, CFTC, FINRA, state financial services regulators, Federal Reserve, OCC, Treasury, and a bajillion other acronym agencies. Some of them are there while they wait for something better in industry. Many eye an administration appointment or political office. These are motivated people with comprehensive data across multiple markets, all tied to the natural persons behind accounts.
Corollary: One will notice that most insider trading busts happen to mid-level employees at publicly-traded companies. Not traders or hedge fund managers. A large part of this comes down to the general public having no idea how competent securities regulators are. So while someone in the industry would never e.g. text about insider trading before buying out of the money options in a relative's name, Midwestern CFO's daughter sees nothing risky about that.
I originally criticized the notion of a short seller sabotaging Tesla to make money. The moment you reach the scale where it makes sense, it also becomes easily discoverable.
Not sure. My point is one's odds of being caught go way up if the sabotage is twinned with securities transactions.
Nobody scans for sabotage. Many agencies scan for insider trading. After a corporate event, e.g. an earnings revision or surprise, thousands of automated systems look for trades that were unusually (a) profitable and/or (b) large.
To make sabotage worth it, one would need to enter into trades that are (a) small and unusually profitable or (b) large and usually profitable. Those trades will get flagged by systems designed to catch insider trading. That, in turn, will result in a human trained to spot unusually-clairvoyant trades reviewing the case.
There are many reasonable motivations for sabotage. But for all of them, the gains must outweigh the operation's cost and risk. Short-selling gains don't make the balance.
Once again, much of the short interest is not naked shorting, but is in fact people and institutions hedging their long bet on a stock that is very volatile.