Also, short sellers do other shady stuff. Like intimidating friends and family of people who work at the companies they are shorting.
Look at what happened to Fairfax Financial and their CEO Prem Watsa. Short sellers mailed the pastor at Watsa's church, with a fake return address, claiming that he was a pervert and a fraud. They impersonated journalists, impersonated government investigators, and even harassed the dean of the business school at the University of Toronto.
They filed a lawsuit against the short sellers in 2006 detailing all these activities, and that's what caused the attacks to stop. Elon was correct to call out the short sellers spreading FUD at every opportunity.
A well-known fact in the industry is that most hedge funds (including shorts) don't actually know what they're doing, and rely on selling narratives so they can gamble with other people's money. The overwhelming majority can't even beat the S&P in performance. Short sellers are infamous for spreading massive FUD (Tesla was a prime target for years), and most continue their antics despite no longer having any credibility whatsoever.
Tesla short sellers were definitely silly. But, it's not fair at all to compare hedge fund performance to the S&P. They hedge their market exposure (after all, it's in the name), and most market neutral hedge funds end up with a beta of around 0.2, meaning that if the market goes up by 1%, the fund will go up by 0.2% on average (plus their alpha).
How are Tesla shorts silly? Can you name any other valuation of a company that is more detached from reality? People were clowning Gamestop when it was around $60-80 stock price (it has dropped below that now. Besides the pt) which gave it a market cap below $5B.
Tesla at $800B is more insane. You and all of us have just gotten used to it.
You're talking about the same Tesla that had funding secured at $420 a share. That is probably my favorite social media post of all time. I quote it all the time.
But only with hindsight 2.5 years later does that tweet look tame. Tesla's rise in valuation is something no one credible could have predicted. Tesla relies on selling a narrative for bulls.
Look at what happened to Fairfax Financial and their CEO Prem Watsa. Short sellers mailed the pastor at Watsa's church, with a fake return address, claiming that he was a pervert and a fraud. They impersonated journalists, impersonated government investigators, and even harassed the dean of the business school at the University of Toronto.
They filed a lawsuit against the short sellers in 2006 detailing all these activities, and that's what caused the attacks to stop. Elon was correct to call out the short sellers spreading FUD at every opportunity.