Elon Musk: It’s “Probably Unwise” To Short Tesla Shares

Tesla Motors CEO and visionary Elon Musk has warned investors against shorting his company, a bold statement amid the recent sharp downturn in Tesla’s share price.

Musk – a South African-born Canadian-American business leader known for his outside-the-box thinking and incredible work ethic – was recently asked on Twitter what he would say to someone shorting his stock.

“Probably unwise,” Musk responded in a tweet that has since been favorited over 500 times.

Tesla’s share price is down over 7% since the beginning of the year. Tesla plunged over 35% through the first six weeks of 2016 – a period known as the worst start to a year ever for Wall Street.

Musk, who has made several bold claims throughout his illustrious career, is obviously standing behind his company at a time when short interest for Tesla is at the highest level since its initial public offering (IPO) in 2010. Short-selling essentially refers to the practice of selling shares on the expectations that the price will fall, enabling it to be bought back for cheaper at a later date.

Not so fast, says Musk, whose company recently announced advanced sales of 325,000 new Model 3 cars in the last quarter alone. That’s the biggest consumer product launch ever, affirming that the electric car market has huge potential upside. Musk later told analysts that Tesla was planning to ship 500,000 cars by 2020. If those projections hold (and there’s strong reason to believe they certainly could), Tesla still has a lot of room to grow.

Tesla’s upside is tied to the firm’s expectations for delivering stylish electric cars at affordable costs. In its recently released first quarter update, Tesla said it is aiming to make the Model 3 one of the world’s most affordable electric automobiles. 

“Our objective with Model 3 is to create the world’s best car with a base price of $35,000, before any incentives, with a range of at least 215 miles on a single charge, and with strong gross margins. We plan to incorporate our best technology into Model 3, yet keep it relatively simple to build at high volume and with high quality,” Tesla said in its quarterly report.