If Bill Gates Is Shorting TSLA Stock, He’s Making a Big Mistake

Today, the internet is buzzing over a leaked text conversation between Elon Musk and Bill Gates. On April 22, a popular Twitter (NYSE:TWTR) profile shared several screenshots of the alleged conversation between the two tech moguls. When Musk asked Gates if he still held a short position against TSLA, Gates admitted he did. Musk then declined to discuss climate change-focused philanthropic opportunities with Gates because of the position. He described Tesla as “the company doing the most to solve climate change.”

tesla car
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Ever since Musk began maneuvering to acquire Twitter, TSLA stock has faced some turbulent conditions. Today, however, the turbulence has culminated in a history-making moment. This afternoon, Twitter announced it had accepted Musk’s $44 billion bid.

This news sent TSLA stock down after an attempt to rally earlier today. Shares closed down less than a percent, likely due to concerns about potential restructuring plans.

So far, Gates hasn’t issued a statement regarding his short position on TSLA stock. However, his action toward the company is worth a closer look as Tesla prepares for a monumental shift.

What’s Happening with TSLA Stock?

From a purely financial standpoint, now is not the time to short TSLA stock. The company just reported impressive earnings for the first quarter of 2022, beating expectations on both the top and bottom lines. Shortly before, it also reported record-setting sales in the face of production and supply-chain constraints. Given where TSLA was trading a few months ago, the electric vehicle (EV) innovator has clearly come a long way.

Of course, there’s still a lot we don’t know about Gates’ alleged short position. We don’t know when Gates took it out, nor his justification for the decision. In fact, all investors know is that the position is supposedly for $500 million. In the texts, Gates did not deny this amount, instead confirming he had not closed it out.

Gates may be betting against Tesla, but plenty of other experts are not. Generally, Wall Street doesn’t see TSLA as a name to short. Analysts on TipRanks rate the stock as a “moderate buy,” with 15 out of 29 maintaining a “buy” rating. What’s more, although investor Michael Burry recently speculated Tesla may soon be buried by increasing competition, the stock’s recent performance does not support that view.

What It Means

When it comes down to it, shorting TSLA stock doesn’t really fit with Gates’ image as a climate change activist, either. After all, he has dedicated considerable time and resources toward addressing the crisis. Because of this, the fact that Gates is shorting the profitable growth stock suggests he may be betting against Elon Musk more than anything else.

Some critics have raised concerns as to how green Tesla’s technology really is. The company has drawn ire for its failure to report carbon emissions before. Still, recent performance proves TSLA stock shouldn’t be shorted, either.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/if-bill-gates-is-shorting-tsla-stock-hes-making-a-big-mistake/.

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