Elon Musk has repeated the charge that Bill Gates has a short position against Tesla Inc. The vicious tussle between the two tech billionaires has worsened after they fought over climate and philanthropy months ago.
Musk said on Friday the Microsoft founder would need to shell out between $1.5 billion and $2 billion to close the short position on Tesla stock.
In a series of tweets Musk said Gates's original short position on Tesla stock was $500 million and Gates has suffered massive setback after the share price of the electric car giant spiked ever since.
Last year, Gates had publicly responded to the media's questions over his Tesla short position that he does not talk about his investments.
However, a text exchange between Musk and Gates that leaked online had confirmed the Microsoft founders short position on Tesla. Musk had confirmed the authenticity of the leaked exchange.
What is Shorting?
Shorting a risky investment tool wherein an investor borrows shares in a company from a broker and sells it, in the expectation that the price of the shares would fall in the future. If the investor's call is right and the share drops, he would buy them in the open market and sell it to settle the broker from whom he borrowed it. If the price goes up the short position will accrue losses.
Why Would Gates Short Tesla?
Musk says that taking up half a billion worth of short position on Tesla is a statement of ill will by Gates. In effect, Microsoft founder expects Tesla to do poorly in future so that its stock tumbles, enabling him to take profits, according to Musk.
While that may be a justifiable business move by Gates, what Musk has not taken kindly to is the fact that Gates has been preaching to him on climate and charity.
According to a Fortune report earlier this month, in the text exchange between the two Musk asked Gates was shorting Tesla stock. Gates, who answered in the affirmative, told Musk that he would like to talk to him about philanthropy.
"Sorry, I cannot take your philanthropy on climate change seriously when you have a massive short position against Tesla, the company doing the most to solve climate change," Musk said.
Musk tried to drive home the point that by betting against Tesla Gates was betting against the electric car industry. Musk asked how Gates's climate advocacy would sit well with the stand against Tesla, which has pioneered the shift globally away from the internal combustion auto industry that depends on fossil fuel.
Ongoing Rivalry
The relationship between the two tech titans has not been good over the years. Gates had openly spoken out against Tesla in the past, saying at one time that he was not happy with the range, price and performance of Tesla cars. Musk retorted, saying that all of his conversations with Gates was honestly underwhelming.
More recently, the two fought over coronavirus vaccine, with Musk calling Gates a 'knucklehead' after the Microsoft founder attacked Musk over his comments on the vaccine.
It was in 2020 that Musk surpassed Gates in the global wealth chart. Recently, Gates had heavily criticized Musk's plan to take over Twitter.
