Bill Gates Tries to Profit by Driving Down Tesla Shares and is Confused by Elon Musk Anger

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Bill Gates bet billions against Tesla in a method called short selling. Short selling involves borrowing a security from a broker and selling it on the open market. Short selling adds liquidity to a market by increasing the volume of buying and selling above normal levels. This volume would not exist without short sellers.

The Bill Gates position in the dispute is. I, Bill Gates, can bet billions against your company which could suppress the value of your company. If I kept rolling and increasing the short this could have the risk of bankrupting your company. If I make money on this bet, you might have less money. I also want you to donate some of your cash to my charities.

Elon Musk’s position is that Bill Gates is insane and an asshole to the core. Elon also thinks Bill Gates is a hypocrit.

Short Selling Explained

Everyone knows that basic economics is supply and demand. If supply is increased that will tend to drive the market clearing price down. Short selling can stress a company. It is possible for sustained short selling to suppress share prices over a time when a company needs to raise new financing, then it reduces the money that is raised and can prevent proper financing. Having a large percentage of short sellers in a stock can make it more difficult for the management of the company to operate the company. If Elon was needing cash around the time Bill Gates was shorting. Having a reduced share price would mean that Elon Musk would get less for any shares Elon sold. Share price manipulation could impact and delay when Elon might personally raise funds.

Walter Isaacson reports that by the time Bill Gates arrived in Austin to meet Musk, Bill had lost $1.5 billion shorting Tesla. This means Bill Gates had to have used about $3 billion to short Tesla.

It is likely that Bill Gates was also short Tesla stock in 2022 and into 2023 when the price of Tesla shares went down to $100 from a high of $400.

Gates said he was sorry [about shorting], but that did not placate Musk. “I apologized to him,” Gates said. “Once he heard I’d shorted the stock, he was super mean to me, but he’s super mean to so many people, so you can’t take it too personally.”

The dispute reflected different mindsets. When Isaacson asked Gates why he had shorted Tesla, Bill explained that he had calculated that the supply of electric cars would get ahead of demand, causing prices to fall. Isaacson nodded but still had the same question: Why had he shorted the stock? Gates looked at me as if Isaacson had not understood what he just explained and then replied as if the answer was obvious: He thought that by shorting Tesla he could make money.

Gates was truly puzzled about why Musk was upset that he shorted the stock. And Musk was just as puzzled that Gates could find it puzzling. “At this point, I am convinced that he is categorically insane (and an asshole to the core),” Musk texted me right after his exchange with Gates. “I did actually want to like him (sigh).”

Elon’s view is “How can someone say they are passionate about fighting climate change and then do something that reduced the overall investment in the company doing the most?” he asked me a few days after Gates’ visit. “It’s pure hypocrisy. Why make money on the failure of a sustainable energy car company?”

Here is More of Walter Isaacson reporting on Bill Gates Vs Elon Musk

“Hey, I’d love to come see you and talk about philanthropy and climate,” Bill Gates said to Elon Musk when they happened to be at the same meeting in early 2022. Musk’s stock sales had led him, for tax reasons, to put $5.7 billion into a charitable fund he had established. Gates, who was then spending most of his time on philanthropy, had many suggestions he wanted to make.

They’d had friendly interactions a few times in the past, including when Gates brought his son Rory to SpaceX. Musk could relate to a guy who had built a company by being hardcore and relentless. They agreed to set up a visit, and Gates, who has a team of schedulers and assistants, said he would have his office call Musk’s scheduler.

“I don’t have a scheduler,” Musk replied. He had decided to get rid of his personal assistant and scheduler because he wanted complete control of his calendar. “Just have your secretary call me directly.” Gates felt weird having one of his assistants call Musk, so he did so directly and arranged a time they could meet in Austin.

“Just landed,” Gates texted on the afternoon of March 9, 2022.

“Cool,” replied Musk, who sent Omead Afshar down to the Gigafactory entrance to meet him.

In the rarefied fraternity of people who have held the title of richest person on Earth, Musk and Gates have some similarities. Both have analytic minds, an ability to laser-focus, and an intellectual surety that edges into arrogance.

Musk began giving Gates a tour of the factory.

Gates argued that batteries would never be able to power large semitrucks and that solar energy would not be a major part of solving the climate problem. “I showed him the numbers,” Gates said. “It’s an area where I clearly knew something that he didn’t.” He also gave Musk a hard time about Mars. “I’m not a Mars person,” Gates later told me. “He’s overboard on Mars. I let him explain his Mars thinking to me, which is kind of bizarre thinking. It’s this crazy thing where maybe there’s a nuclear war on Earth and so the people on Mars are there and they’ll come back down and, you know, be alive after we all kill each other.”

Nevertheless, Gates found himself impressed by the factory Musk had built and his detailed knowledge of every machine and process. He also admired SpaceX for deploying a large constellation of Starlink satellites to provide internet from space. “Starlink is the realization of what I tried to do with Teledesic 20 years ago,” he said.

At the end of the tour, the conversation turned to philanthropy. Musk expressed his view that most of it was “bullshit.” There was only a 20 cent impact for every dollar put in, he estimated. He could do more good for climate change by investing in Tesla.

“Hey, I’m going to show you five projects of a hundred million each,” Gates responded. He listed money for refugees, American schools, an AIDS cure, eradicating some mosquito types through gene drives, and genetically modified seeds that will resist the effects of climate change. Gates is very diligent about philanthropy, and he promised to write for Musk a “super-long description of the ideas.”

25 thoughts on “Bill Gates Tries to Profit by Driving Down Tesla Shares and is Confused by Elon Musk Anger”

  1. Just wondering – what if Gates is using MSFT stock to cover his short, and some billionaire sees that and decides to short MSFT and go long TSLA. TSLA stays steady or rises, MSFT falls, Gates has to come up with more collateral or close his TSLA short at a loss, possibly selling MSFT for that and driving down its price. Other billionaire covers his short at a profit, closes most of his long TSLA position at break even while keeping the extra stock.
    Not a financial guru, but that seems like a possible gamble someone really rich might take?

  2. I consider Elon Musk is the best person in technology creating the world 🌎 better place for humanity….in the future.

  3. Is Gates really personally shorting Tesla, or is he simply agreeing with his money managers but not getting his hands in deep with the money management though?

  6. Went to get a rental car at an airport last week and they were out of gas cars. They offered me a Tesla and, with some reservations (I’d never driven anything other than a golf cart that was all electric), I took it. It was actually rather nice and I was even able to recharge it at my uncle’s house on a 110 volt one night. It’s not smoke and mirrors.

  7. It’s akin to investing in Tobacco companies and saying you are working to reduce tobacco use. I stand with Elon on this.

  8. Musk should challenge Gates to a fight. I don’t fancy his chances against Zuck, but reckon he might take down Gates.

  10. Elon’s view is “How can someone say they are passionate about fighting climate change and then do something that reduced the overall investment in the company doing the most?”

    I’m not so sure Gates is actually passionate about fighting climate change, as opposed to having calculated that it was a very good idea to have a reputation of being passionate about fighting climate change.

    It buys him an awful lot of immunity from the left’s depravations.

    • Sorry, but Elon is NOT fighting climate change. He doesn’t give a damn about it. He pretends to though and sheep believe it.

  12. Nothing wrong with short selling. Short selling a company for billions and asking the founder and CEO for money for your charities is the tech mogul illustration of chutzpah

  14. Disagree with musk on short selling
    But I agree with musk that much (but not all) of philanthropy is bs and a waste of money. Better to put that cash into a productive enterprise that is tackling a big problem.

  15. I can see why he would be confused at Elon being angry.

    After all, driving the stock down to profit from it was exactly what Elon tried to do when he led on the Twitter board about an acquisition he never intended to make.

    • Well — it’s certainly how people who start by assuming bad faith interpret that series of events.

      I’ve yet to see receipts that actually convince me.

  16. I don’t really see how passive short selling is a problem. It’s basically a bet on shares going down. It shouldn’t have any impact on a stock or company.

    (Short term it might cause a dip because of increased borrowed shares on market but those have to be covered in the future which can cause a short squeeze and a jump in the stock price – so long term the net effect should be 0)

    The only problem is aggressive short sellers who short a stock, then spread misinformation to drive the price down. This can create a negative feedback loop that can hurt a company.

    As far as I understand gates was simply making a bet that Tesla was overvalued. Musk is being unreasonable in his criticism.

    Gates is not the bad guy. (In this case!). It’s the aggressive short sellers who were putting out Fud and lies against Tesla.

  17. Market capitalization 09/12/2023:
    Tesla: $838B
    Honda: $63B
    GM: $46B
    Ford: $50B
    Fiat: $30B

    Just take Honda! Honda even makes airplanes – beautiful airplanes. Tesla is all hype, and surprisingly that doesn’t make the stock any less of a store of value than bitcoin or gold.

    I wouldn’t bet against Tesla. That is like betting against stupid, and I don’t have Michael Burry’s huevos (Big Short).

    My mind used to be cluttered with thoughts of what *should be* based on my understanding of the first principals and *what is*. Tesla is over-valued. Period. Does that mean that all the suckers will sell off their shares? No way! This is 2023. Stock price been more about HODL than balance sheet for a decade now.

    • The problem with tesla is that you buy into elon and all his great ideas, the average stockbuyer cant buyin to spacex, nor the boring company so he puts all his effort in tesla, its all in the mind, they have great ideas but indeed the stock is overvalued, so is nvidia but they dont have the star ceo like elon is. Im a big fan of elon btw, read his biography etc but i would never buy into tesla. Im short nvidia for a while now.

    • So do you think APPL is just a phone company?

      I don’t think you understand ecosystems and technology lock-in.

      Tesla’s value is in AI, DOJO, subscriptions, Teslabots, Megapacks, charging stations, etc.

      Anyone who views TSLA as just a car company, and compares it to other car companies, is woefully and willfully uniformed.

      Or as you say, a ‘sucker’.

      • Sorry, yer right. It’s definitely a trillion dollar company worth 8x GE.

        I do take back the suckered comment. You’re all invested in a culture of personality.

        You’re all ahead of the game, just like having tattoos makes you an individual in 2023.

      • I concur with Iceman.
        Tesla looks out years, GM (etc) only look to the next quarter.
        Tesla is an innovative company, with a genius behind the wheel. People that think Elon is an over-hyped bafoon are lost.
        Elon is the reason why the world is switching to EV’s.
        Elon is the reason we launch our own astronauts & not the Russians.
        Elon is the reason Starship exists, and will change the game on space innovation, from moon habitats, giant telescopes, huge space stations, 3D printed organs, etc.

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