Dec 28 Reuters Shares of Tesla Inc snapped a sevensession losing streak on Wednesday, in their rare rise this month on the way to what will be the electricvehicle maker39;s worst year on record.

The stock gained 3.3 on the day. It is set to round off 2022 with a 68 drop the most among the big U.S. technology firms as fears mount over slowing demand in China and top boss Elon Musk39;s growing distractions with Twitter.

The shorts are piling on and the stock is way oversold here, which could drive a bounceback rally, Wedbush analyst Dan Ives said.

The company, whose meteoric rise over the last few years had burned many bearish investors, is the third most shorted stock in dollar value after Apple Inc and Microsoft Corp, according to financial analytics firm S3 Partners.

About 2.85 of Tesla shares, or 8.36 billion, are shorted, S3 Partners said, adding that short selling was up by more than 8.98 million shares this year due to a drop in the stock price, which was partly driven by Musk39;s share sales to fund his Twitter purchase.

Tesla short sellers stand to book a profit of 16.94 billion, their first gain since at least 2016, compared with a 10.26 billion loss last year.

When Tesla39;s stock begins to tick upwards there should be a flurry of short covering … as shorterterm short sellers look to realize their outsized marktomarket profits before they evaporate, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

Short sellers borrow…