Elon Musk clashes with Bill Gates over $500m Tesla investment

There seems to be a silent feud between the owner of Tesla, Elon Musk, and Microsoft founder, Bill Gates, following the latter’s decision to hold a short position on the electric vehicle manufacturer’s share.

What you need to know about short investors or position

Short position is the purchasing of a company’s shares with expectation that the asset’s value would fall. Investors who buy short usually borrow the asset, and sell, while buying the shares back to hand it over to the owner.

During the period the short position investor sold the shares and buyback the assets, if the value of the stock falls in the capital market, the investor makes a gain.

Short position could weigh on an asset value, and slow its growth. This is opposite of an investor that buys for long position, with expectation that the value of the share would appreciate later.

How short position caused a feud between Musk and Gates?

With Gates holding a short position on Tesla shares, which is worth half-a-billion dollar ($500 million) according to a leaked chat between the duo, it means the former richest man in the world doesn’t believe Tesla’s share is worth the price it carries in the market.

So when Gates reached out to Musk for a climate change philanthropy investment via the chat, which the Tesla boss confirmed to be real, the current richest man in the world turned down the Microsoft founder.

Read also: Vanguard Group becomes Twitter’s largest shareholder, as Elon Musk losses spot amid ownership tussle

He asked Gates, “Do you still have a half billion dollar short position against Tesla”, with Gates responding, “Sorry to say, I haven’t closed it out”, in the chat leaked on Saturday via Twitter.

What Gates’ action means to Musk?

Both Gates and Musk are climate change philanthropists, and Tesla is a company also operating to reduce carbon in the air to protect the climate from fossil fuel – hence, Musk’s decision to stop accepting bitcoin as payment for Tesla’s cars.

So with Tesla having such a mandate, and Gates still investing in the company with believe that the firm’s stock is overpriced, that didn’t seat well with Musk, who thinks since the Gates Foundation boss is a climate change philanthropist, he should believe more in Tesla, and not hold a short position.

“Sorry, but 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 told Gates in the chat, which the former said wasn’t leaked by him.

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