Tesla CEO calls for short selling ban
05 December 2019 Palo Alto
Image: Shutterstock
Elon Musk, the CEO of Telsa, an electric car maker and prolific short target, has waded into an online debate around the ethics of short selling by calling for the practice to be made illegal. Social media was abuzz yesterday following an announcement by the world‚ largest pension fund, the Government Pension Investment Fund in Japan, that it was shutting down the foreign equity portion of its securities lending programme.This was due to concerns around its compatibility with the fund strong environmental, social and corporate governance ethos. Musk quickly responded to the news via Twitter, posting: Bravo, right thing to do! Short selling should be illegal, to his 29.9 million-strong online following. The Twittersphere promptly erupted with those in agreement and those who see short selling as a legitimate business practice.Ihor Dusaniwsky, the managing director of S3 Partners, a data provider company, replied to Musk saying: Short selling is legit, needed and necessary to provide market liquidity and two-way trading in the market.Now spreading false info by shorts and longs should be illegal. By the way, as a percentage of trading volume, most of the downward stock price pressure comes from long selling not short selling.Tesla outspoken CEO has a reputation as a prolific social media user but he usually focuses his attention on the activities of his own ventures including SpaceX and the latest Tesla car model. However, this is not the first time that Musk has made his views on short selling clear. Just last month Elon Musk sent a public letter to David Einhorn, a hedge fund manager, mocking him for losses his fund had made relating to its significant short position in Tesla at the time.Prior to that, in August 2018, Musk took to social media to claim he was taking Tesla private and that he had already secured the funding for doing. Shareholders responded by saying that this was an attempt to manipulate Tesla stock price and ruin plans for short-sellers.Following this, shareholders filed a class-action lawsuit, claiming Musk tweet represented false and misleading information. The US Securities and Exchange Commission went on to charge Musk with a securities fraud charge and charged Tesla with failing to have required disclosure controls and procedures relating to Musk tweets.nTesla has been a popular short target over the years, and a year of turmoil led Tesla to rank as one of the top five earners for short sellers in 2018, according to DataLend.The data provider found that Tesla, along with the other top earners in 2018 (Celltrion, Ubiquiti Networks, Sharp and Sirius XM) short sellers banked $482 million in revenue.More recently, Musk is currently caught up in an ongoing defamation trial following Musk infamous pedo guy tweet which was aimed at the British cave diver Vernon Unsworth involved in saving the junior football team in Thailand that had to be rescued from a flooded cave in 2018. The trial began this week and is on-going.
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