Elon Musk sends short shorts to detractor
Elon Musk and investor David Einhorn, one of Tesla’s toughest critics, ratcheted up the rhetoric Friday as the two billionaires traded jabs in a long-running battle of words.
The latest round started early Friday, when Musk posted a snarky tweet responding to earlier comments from Einhorn accusing him of fraud. In a shareholder letter last week, Einhorn–who has long bet against Tesla stock–said of the automaker that the “accepted reality appears to be that Elon Musk is above the law.”
In his retort, Musk addressed Einhorn as “Mr. Unicorn,” saying that the hedge fund manager’s letter contained “numerous false allegations,” and offered sympathies for losses Einhorn’s hedge fund have lost money on Tesla. In German, the word for unicorn is einhorn.
“It is understandable that you wish to save face with your investors, given the losses you suffered from Tesla’s successful third quarter,” he wrote, “especially since you’ve had several down years in performance” at Greenlight Capital.
“Please allow us to send you a small gift of short shorts to help you through this difficult time,” Musk wrote, invoking a jab he has used with Tesla short sellers, or investors who bet against a company’s stock performance.
Musk, who is known for publicly sparring with Tesla naysayers, previously sent Einhorn a box containing several pairs of short shorts, to which Einhorn responded with a sarcastic thank you via Twitter.
This time, Musk also invited Einhorn to tour the Tesla factory and learn more about the company, adding “I’m certain your investors would appreciate you getting smart on Tesla.”
Einhorn responded Friday, in an open letter challenging Musk to identify inaccuracies in Greenlight’s shareholder letter and accepting the invitation to visit Tesla factories, writing, “I think facility visits would be fun (can we start in Buffalo?). I might learn the difference between your alien dreadnought factory and cars made by hand in a tent.”
Tesla’s solar panel manufacturing plant is located in Buffalo, New York.
The tension between the two goes back years. Einhorn’s Greenlight Capital has long had a large short position in Tesla, meaning it loses money when Tesla’s stock performs well. Last month, Tesla posted a surprise profit, sending its share price up 30%, and Greenlight took a significant hit.
Einhorn’s letter states that despite losses on Tesla, his firm has returns of 24% year to date. (The S<><><><><><><><><&P 500 index is up 22%.) Even so, the hedge fund has shed more than half its value in recent years, largely due to bets the firm a href="https://www.cnbc.com/2018/02/01/david-einhorns-hedge-fund-greenlight-capital-is-getting-crushed.html" target="_blank"made against big tech companies, /aincluding Amazon and Netflix./ppFor years, Einhorn has decried Musk's controversial leadership style and called for him to be ousted from the CEO seat at Tesla./ppHis October 30 letter to shareholders rails against Musk's handling of the a href="https://www.vanityfair.com/news/2019/08/how-elon-musk-gambled-tesla-to-save-solarcity" target="_blank"SolarCity takeover/a, which Tesla a href="https://www.google.com/search?q=site%3Acnn.com+solar+cityoq=site%3Acnn.com+solar+cityaqs=chrome.0.69i59j69i58.4431j1j9sourceid=chrome><><><><><><><><><><><><><><><><><><><><>ie=UTF-8″ target=”_blank”acquired/a for $2.6 billion in 2016. SolarCity, which was run by Musk’s cousin, has been the target a href=”http://www.cnn.com/2019/09/27/tech/elon-musk-tesla-legal-woes/index.html” target=”_blank”numerous lawsuits/a and fraud allegations stretching back to before the acquisition./ppOne a href=”https://www.reuters.com/article/us-tesla-solarcity-lawsuit/teslas-musk-pushed-for-solarcity-deal-despite-major-cash-crunch-lawsuit-idUSKBN1W82R9″ target=”_blank”lawsuit/a filed by Tesla shareholders alleges Musk engineered the purchase of SolarCity, in which he was the majority shareholder, as a a bailout of the troubled solar panel company. That case is heading for trial in March./ppTesla has a href=”https://www.cnn.com/2019/09/27/tech/elon-musk-tesla-legal-woes/index.html” target=”_blank”said/a the lawsuit is “based on the claims of plaintiff’s lawyers looking for a payday” and that “they are not representative of our shareholders who support our mission and ultimately a href=”https://money.cnn.com/2016/11/17/technology/tesla-solarcity-merger/index.html” target=”_blank”voted in favor/a of the acquisition.”/ppOver the past two years, Tesla’s electric car business has been beleaguered with manufacturing problems related to its rollout of the new Model 3 sedan. The company’s latest earnings report signals the firm may be at a turning point. It posted a $342 million profit, indicating it’s making bigger margins on car sales./ppIn Einhorn’s letter to Musk Friday, he said Greenlight has “dozens of questions” about Tesla’s finances and questions why the carmaker is “owed over $1 billion by its customers.”/ppTesla did not immediately reply to a request for additional comment Friday afternoon./p