Elon Musk's stern warning to short sellers after Tesla Senior VP dumps 82% of shares: Here's what he said
This major sale by a top executive has raised questions about insider confidence in the company.
Amidst the news of the stock sale, Tesla CEO Elon Musk has issued a strong warning to short sellers. In a post on X (formerly twitter), he stated that short sellers would be 'obliterated' if they do not exit their short positions before Tesla reaches 'autonomy at scale.'
Musk's comment was a direct response to a list of current net short sellers of the Electric Vehicle (EV) manufacturer.
Short selling isa trading strategy where an investor profits from a decline in a stock's price. The process involves: Borrowing: An investor borrows shares of a company from a broker
Selling: The borrowed shares immediately sold at the current market price.
Buying back: Later, if the stock price drops, the investor buys back the same number of shares at a lower price. Profit: The shares are then returned to the broker and the difference between selling price and buy-back price is the investor's profit.
Short selling is considered a high-risk strategy because potential losses are unlimited if the stock price rises instead of falls, as the investor must still buy back the shares at a higher price to return them to the broker.
Elon Musk has a history of clashing with short sellers, including Microsoft co-founder Bill Gates. Their feud stems from Gates' reported short positions against Tesla stock. According to Walter Isaacson's 2023 biography of Musk, this short position has allegedly resulted in a $1.5 billion loss for Bill Gates.
In an earlier post on X, Musk had warned that 'If Tesla does become the world's most valuable company by far, that short position will bankrupt even Bill Gates.'
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