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Elon Musk promises that Bill Gates will be “annihilated” if he doesn’t stop selling Tesla shares short

Written by Noel Budeguer
Published 09/07/2024 às 17:23
Elon Musk - Tesla - Bill Gates
Elon Musk promises that Bill Gates will be “annihilated” if he doesn’t stop selling Tesla shares short

The war between Elon Musk and Bill Gates intensifies with the short sale of Tesla shares. What does this mean for investors?

It is not the first time that sparks have arisen between Elon Musk and Bill Gates due to the Microsoft founder's investments. As Walter Isaacson reports in Elon Musk's biography, both billionaires were involved in a tense dispute over Tesla's short investment held by Bill Gates.

Again, a post on your profile on X lit the fuse between both billionaires, who have remained distant since that incident.

A free warning

Just like that, the founder of Microsoft found himself involved (again) in Elon Musk's conversation against investors who were betting against Tesla. The spark came when a user dedicated to investment analysis made a reference to Tesla's short investors who bet on the downward trend in the company's shares run by Elon Musk.

The South African billionaire's response was quick: “Once Tesla completely solves autonomy and has the Optimus in volume production, anyone who still has a short position will be wiped out. Even Gates”, published the Tesla CEO on X.

Investments in what?

Short positions or short investments are a type of investment that bets on a value falling. What is common on the stock market is for an investor to buy shares in a company hoping that its price will rise. This way, he receives more money for each share when he puts them up for sale. However, it is also possible to make money by betting on this stock falling.

First, a company's shares are “borrowed” from a broker who offers this service. The investor sells this share with the commitment to recover it within a certain period of time and return it. If the investor sells that share for 100 euros and, after a few days, those shares lose 50% of their value, when they buy them back, they will pay half of what they obtained when they sold them. In this way, the investor returns the shares to their owner and obtained 50% profitability in the process.

If instead of falling, the share rises in price, this is bad news for this type of investor, as they will have to pay more for it when they recover it, taking money out of their own pocket. The more the share price (and the company it represents) drops, the greater the benefit.

Bill Gates' short position

As the biographer said on CNBC, the conflict between Bill Gates and Elon Musk arose in 2022. Musk wanted to increase his philanthropic contributions, and Bill Gates wanted to show him some projects from his foundation. During his visit to the Austin gigafactory, Musk chided Gates for keeping $500 million worth of Tesla shares short. This outraged Musk, who broke off any negotiations with Gates.

“Sorry, but I can’t take your climate change philanthropy seriously when you have a massive short position against Tesla, the company doing the most to solve climate change,” Musk wrote in text messages to Bill Gates, according to your biography.

Bill Gates' support for Tesla continues

Despite the confrontation, Bill Gates maintained in several interviews his support for Tesla and praised the company's work in the electrification of automobiles. However, Fortune's investigations were unable to uncover whether the Seattle billionaire still maintains his short position in Tesla.

However, Elon Musk's response suggests that, in fact, despite his public support for the company, Bill Gates may have made a lot of money in recent months from the drop in Tesla's share price caused by poor sales data in recent quarters. last year, beginning of 2024.

Bill Gates made money from Musk's salary

Bad sales data and the fierce civil war between investors over Elon Musk's billion-dollar bonus caused the company's shares to fall by up to 32% on the stock market. This implies that, if Bill Gates maintained his short position, he would have obtained an interesting gain in recent months.

Annihilate are bigger words

Elon Musk's message referred to two specific milestones to be able to “annihilate” those who bet against Tesla: the resolution of the autonomy of its batteries and the production of its Optimus android. The threat is not trivial.

According to the CEO's estimates, each humanoid robot would leave a profit margin of 50%, which would translate into 1 trillion dollars annually. On the other hand, calculations published by Fortune indicate that the robotaxi fleet, which currently has autonomy as its main obstacle, would provide Tesla with a profit of over 5 trillion. With these numbers, Tesla would become the most valued technology company on the planet, ahead of NVIDIA, Apple or Microsoft. Sounds great, but these are estimates. Reality sometimes follows another path.

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Noel Budeguer

Of Argentine nationality, I am a news writer and specialist in the field. I cover topics such as science, oil, gas, technology, the automotive industry, renewable energy and all trends in the job market.

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