Elon Musk Is No Longer Scaring the Shorts With Tesla Tweet Saga

Posted On August 10, 2018 12:41 pm

If the goal was burying the short sellers, it hasn’t quite worked out.

As fast as Tesla shares surged after Elon Musk tweeted about going private, they’ve come back down. Mounting skepticism and an inquiry by the Securities and Exchange Commission have erased most of an 11 percent gain.

“It always ends poorly for companies when they’re trying to squeeze the shorts,” said Chris Brown, managing member at Aristides Capital, whose biggest position is a Tesla short. “The idea of a transaction itself is idiotic.”

As always, audacity is proving a double-edged sword for Musk, whose eight-year battle with public naysayers was a reason he gave for weighing the deal. After going public on Twitter without providing any financing specifics and igniting a frenzy of attention, the 47-year-old billionaire’s gambit has seen its market impact fade.

“I doubled my short position the morning after Musk’s original tweet,” Robert Chapman, money manager at Chapman Capital, said in an email. “The more one learns about this situation, the more this appears to be a fakeover vs. takeover.”

Continue Reading at Bloomberg.

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