In early 2022, one of the most famous short positions in Wall Street history became public knowledge: Bill Gates, one of the world's richest people and a self-styled climate champion, had placed a roughly $500 million bet against Tesla. When Elon Musk found out, he didn't call his lawyers. He pulled out his phone and texted Gates directly.
What followed was a very public falling-out between two of the most powerful figures in tech — and a lesson in how shorting Tesla is never just a financial trade.
The short that broke the friendship: Gates reportedly shorted approximately 500,000 Tesla shares (around $500M at the time). When Musk discovered the position was still open, he made clear there was no coming back.
Bill Gates has been openly skeptical of Tesla's valuation for years. In a 2021 interview he questioned whether Tesla's stock price reflected fundamentals, and in investment circles he was known to believe the EV market would ultimately become commoditised — good for EV adoption, bad for Tesla's premium valuation. He wasn't alone in that view. Tesla's price-to-earnings ratio has at times exceeded 1,000x, making it one of the most richly valued companies in history by traditional metrics.
Shorting Tesla has historically been one of the most painful trades on Wall Street. Tesla's stock rose more than 1,000% between 2019 and its late-2021 peak, inflicting catastrophic losses on persistent bears. Short sellers lost an estimated $40 billion on Tesla positions in 2020 alone. Gates, with his enormous capital base and long time horizon, bet that discipline would eventually reassert itself.
In April 2022, texts between Musk and Gates leaked publicly — reportedly shared by Musk himself. The exchange was short and pointed.
Gates had apparently reached out to Musk to discuss potential philanthropic collaboration on climate issues. Musk asked whether Gates had closed his Tesla short. Gates replied that he hadn't fully. Musk responded with the above message and declined to meet.
The logic from Musk's perspective: you cannot simultaneously claim to care about climate change while betting money that the world's leading EV company declines. For Musk, the short position wasn't just a financial disagreement — it was a values contradiction.
Gates addressed the leaked texts in a CNN interview, confirming the exchange was real. He acknowledged the short position but pushed back on Musk's framing, arguing that his climate philanthropy through the Bill & Melinda Gates Foundation stood on its own merits regardless of any investment position. He also defended shorting as a legitimate market activity — noting that betting on overvaluation isn't the same as wanting a company or its mission to fail.
Gates's position: That a financial bet on Tesla's stock price is separate from views on climate change, and that the Gates Foundation's climate commitments speak for themselves. Gates also noted he has invested billions in climate technology through Breakthrough Energy.
Musk didn't stop at the private text exchange. Shortly after the leak, he posted a meme on Twitter/X: a side-by-side image of a pregnant man emoji and a photo of Bill Gates, implying a physical resemblance. The post went viral, adding a petty public dimension to what had begun as a private dispute about billions of dollars and the future of climate tech.
It was classic Musk: using social media to humiliate an opponent who he felt had crossed a line, amplified by tens of millions of followers. Critics called it childish. His fans loved it. Markets barely blinked.
The timing of Gates's short position matters. Tesla's stock peaked at around $400 (split-adjusted) in late 2021 and then fell sharply through 2022 as rising interest rates hit high-multiple growth stocks broadly. By late 2022, Tesla had lost roughly 65% of its value from its peak — meaning Gates, if he held the short, made significant money.
Gates reportedly has ~500,000 shares shorted near this level — near-perfect timing in hindsight.
Musk confirms he won't collaborate with Gates on climate. Gates confirms the short isn't fully closed.
Down ~65% from peak. If Gates held his position, the short would have been one of the most profitable in recent memory.
The stock bounces between $150–$270 range, making the final P&L on Gates's position unclear depending on when he covered.
The Gates trade illustrates something every TSLQ investor should understand: shorting Tesla is never purely a financial decision. It draws personal attention from Elon Musk — who has a long history of weaponising the "TSLAQ" short-seller community as a rhetorical foil — and it carries reputational dimensions that most stocks simply don't.
A few things to take away:
Musk and Gates have remained publicly antagonistic since 2022. Musk has repeatedly mocked Gates on X (formerly Twitter), and Gates has continued to publicly question Tesla's valuation in various media appearances. Gates has also made clear he sees Musk's acquisition of Twitter/X as harmful. Neither appears interested in reconciliation.
For Tesla watchers, the Gates short remains one of the most high-profile examples of a sophisticated investor betting against the company — and unlike many Tesla bears before him, one who at least partly got the timing right.
Likely yes, if he held through 2022. Tesla fell roughly 65% from its late-2021 peak to its December 2022 lows. The exact P&L depends on when he fully covered — which has never been publicly confirmed — but the timing of the entry was near-optimal.
Yes. Both Musk and Gates confirmed the exchange was real. Gates addressed it in a CNN interview in 2022 and acknowledged both the short position and the conversation about climate philanthropy.
Musk has been unusually combative with Tesla shorts throughout the company's history. He has publicly mocked short sellers, sent care packages to famous bears, and repeatedly used short-seller losses as a scoreboard. The Gates confrontation was an escalation of a long-standing adversarial stance toward anyone betting against the company.
TSLQ is the easiest retail way to make the same directional bet Gates made — that Tesla's stock will fall. Unlike a direct short (which requires borrowing shares, poses unlimited downside, and in Gates's case attracted a personal call-out from Musk), TSLQ is a straightforward ETF with capped loss and no margin account needed. See a full comparison of TSLQ vs shorting Tesla directly →
TSLQ and other leveraged or inverse ETFs are built to track a multiple of Tesla's single-day return and reset every day. Because of daily-reset compounding (volatility decay), results over any period longer than one day can differ dramatically from the stated multiple — and these funds can lose value even when Tesla is roughly flat. They are high-risk, short-term trading tools for sophisticated investors, and you can lose some or all of your investment. This page is for informational purposes only, is not financial, investment, or tax advice, and is not affiliated with any fund issuer. Always verify current figures with the issuer and consult a licensed professional before trading.