Why is Bill Gates betting part of his fortune on Tesla crashing?

Charlie Taylor

The billionaire behind Microsoft, Bill Gates, holds a billion dollar bet against Tesla shares, according to Elon Musk. On Twitter, the current richest man in the world (a position that was long held by Bill Gates) revealed the bet against Tesla:

For Musk, Gates claims to fight global warming but bets against Tesla, which makes electric cars. Accordingly with Elon Musk, Gates’ short position started at $500 million, but grew to a multi-billion gamble when Tesla (TSLA) stock soared. In an interview with CNBC, Gates said who does not comment on his personal investments, but did not deny Musk’s claim. In exchange for messages between billionaires, whose leak was confirmed as real by Musk, Gates admits to having the short position against Tesla and apologizes for not having closed it.

In the exchange, Bill Gates wanted Elon Musk’s help in philanthropic projects related to global warming, but Musk dismisses Gates’ seriousness on this topic if he bets against his electric car company. “The company is doing a lot to solve global warming,” concludes Musk. Musk didn’t take the news so well, and mocked Gates on Twitter, suggesting that the “pregnant” emoji represented the billionaire’s belly, as well as calling him a “brochante”:

Should Tesla fall or is Bill Gates wrong?

But why is Bill Gates betting part of his fortune on Tesla’s downfall? Since he doesn’t talk about his personal investments, it’s difficult to answer this question precisely, but short on Tesla is a relatively common position. Due to the not so high profit from the sale of electric cars (Tesla’s main product), its valuation is considered stretched by many value investors, the so-called value investors, whose great part of the influence comes from Warren Buffett, who is close to by Bill Gates. Even Elon Musk once opined that Tesla’s stock price seemed to be too high. And that happened on May 1, 2020, when the price was still a fraction of what it is today.

To play with the fact that several investors bet against the company in short positions, Tesla even launched shorts. The product was priced at $69,420 and had “S3XY” written on the back.

However, the company continues to impress and show positive results on the stock market. Possibly, this is a bet by investors on the company’s future, which is seen with good eyes by the innovative creations. In addition, the very ESG agenda, sustainability and environmental concerns, fuels Tesla’s profit with the carbon credit market, which even brings more financial return than the sale of its cars. It is also worth remembering that, in this sense, Tesla was one of the pioneers in adopting bitcoin (BTC) as an alternative to compose the company’s cash. A brave move for one of the biggest companies on the S&P500. From 2020 to now, the TSLA has risen by more than 470%, but it has suffered from the market correction that several companies are feeling on the stock exchange. From January 1 to June 1 of this year, Tesla is down 37.7%. But what’s your take on Tesla’s stock and Bill Gates’ counter bet? Leave a comment below. Don’t forget that you can start investing in US stocks with Passfolio, just click here to create your account. See too:

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