Short interest exploded! Elon Musk angrily retorted: continuing to short Tesla will be very miserable, even for Gates

According to the Zhitong Finance and Economics APP, on Tuesday, Tesla (TSLA.US) CEO Elon Musk issued a stern warning to some investors, including Bill Gates, who continue to short Tesla, stating that they will be "eliminated."

Musk stated on the social platform X that once Tesla completely solves the autonomous driving issue and mass produces its Optimus humanoid robot, any short sellers holding Tesla short positions will be "eliminated," "even Bill Gates is no exception."

In fact, Musk has always been outspoken against short selling practices over the years. He stated that making money by betting on a company's failure goes against investment principles. In recent years, Tesla's poor performance has attracted many short sellers. Those who believe that Tesla is on the verge of financial collapse have always viewed Tesla as a fraudulent company that has been falsifying financial data for years.

Tesla Stock Rebounds, Short Sellers Lose $3.5 Billion in Two Days

Better-than-expected delivery data is a key reason for the recent rebound in Tesla's stock price. Data shows that Tesla delivered 443,956 vehicles in the second quarter, a 4.7% decrease year-on-year, but higher than the analysts' general forecast of 436,000 vehicles. According to FactSet data, this is the first time in the past four quarters that Tesla has exceeded expectations, and the magnitude of the beat is the largest since the fourth quarter of 2021. In addition, Tesla also plans to unveil its self-driving car Robotaxi to the public at the Robotaxi Day event on August 8, showcasing its full self-driving technology and autonomous driving future vision.

Tesla has risen for seven consecutive trading days, surging nearly 25% just this week, and skyrocketing 73% since hitting a low at the end of April. According to data from S3 Partners, since Tesla announced its second-quarter delivery data, the stock price has risen by 17% in two trading days, causing short sellers to lose about $3.5 billion in this rebound.

As the uptrend continues, Tesla's stock price is approaching this year's high. The better-than-expected delivery data has also won favor from Wall Street analysts. Analysts at Bank of America raised Tesla's target price from $220 to $260, while Wedbush analysts raised the target price from $275 to $300.

Although the second-quarter delivery data for Tesla indicates that demand for the company's electric vehicles remains stronger than feared, this data only provides a limited view of the company's performance. The quarterly earnings that Tesla will announce later this month will provide a clearer picture of the company's financial situation. According to data from LSEG, analysts expect Tesla's second-quarter revenue to decline by 2.9% year-on-year to $24.2 billion, a narrower decline compared to the 9% in the first quarter.

Due to an aging product line and unprecedented competition, Tesla's electric vehicle business has been caught in a sales slump. Over the past few months, Tesla has been using discounts, low or zero-interest loans, and other incentives to attract consumers to purchase electric vehicles Guggenheim Partners analyst Ronald Jewsikow said, "Clearly, the loan incentives for Model Y and Model 3 have driven a significant increase in sales. However, just like other significant price cuts and discounts we have seen, demand has been released ahead of time. Tesla must create new demand in the third quarter and beyond, which has proven to be challenging over the past 18 months." The analyst has a "sell" rating on Tesla's stock.

The Feud Between Musk and Gates

It is worth mentioning that Gates once shorted Tesla's stock, betting that Tesla's stock price would fall. This angered Musk because the short sellers had caused him a lot of trouble. Although Gates apologized for this, it did not appease Musk. Gates said, "I apologized to him. When he heard that I was shorting Tesla's stock, he was very harsh on me, but he is very harsh on many people, so you can't take it too personally."

Regarding Gates' shorting of Tesla, Musk criticized it as "hypocritical." Musk stated that a few years ago when Tesla was at its most vulnerable, Gates had bet a large sum that Tesla would go bankrupt, causing the stock price to fall every day at that time, and as far as he knew, Gates' short position on Tesla still existed. Musk added, "Gates' lack of self-awareness and hypocrisy is incredible. He actually had the audacity to ask me to donate to his mostly for-show environmental cause while planning to profit $500 million from Tesla's bankruptcy."

Musk once asked, "How can someone claim to be passionate about addressing climate change and then do the opposite, minimizing investments in companies dedicated to addressing climate change? This is pure hypocrisy. Why profit from the failure of a sustainable energy car company?"

Musk and Gates also have different views on charity. Gates is one of the world's largest philanthropists. He has donated billions of dollars to improve global health, education, agriculture, and other areas. He also advocates for other billionaires to join the donation ranks to collectively solve the world's most challenging problems.

Musk is skeptical of charity. He believes that most charity projects are inefficient and wasteful, and he prefers to invest his wealth in his own companies to change the world by creating more advanced products and services. Musk has rejected charity advice from Gates and even mocked some of Gates' charity projects