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The stock market has long treated Tesla (NASDAQ:TSLA) less as a traditional automaker and more as a futuristic technology cult, with its valuation soaring on the gravitational pull of its CEO, Elon Musk.
This persistent "Musk Premium" has burned countless short-sellers.
Yet, when two figures as pivotal and philosophically distinct as Bill Gates and Peter Thiel make powerful bearish moves, the market must recognise the signal: the foundation of the Tesla narrative is cracking.
The feud between Elon Musk and Bill Gates over Gates’s rumored multi-billion-dollar short position on Tesla is now the stuff of legend.
This isn't just a day trade; it’s a deep, structural critique from one of the world's most disciplined minds in finance and technology.
Gates argues that Tesla, despite its mission to accelerate sustainable energy, is fundamentally overvalued.
It’s an assertion that the company’s price-to-earnings ratio is detached from its core business reality, which is now contending with flattening demand, aggressive price cuts, and intense competition from legacy automakers and Chinese rivals.
Gates is betting that the company will eventually trade like a highly profitable, but cyclical, manufacturer, not a perpetually exponential software firm.
Musk’s furious public response—issuing a direct warning to Gates to close his "crazy short position"—only amplifies the gravity of the bet.
It frames the trade as a high-stakes clash between the institutional guard (Gates) and the disruptive visionary (Musk) over the very definition of value in the modern tech economy.
Thiel: the insider’s vote of no confidence
The move by Peter Thiel, however, is arguably the most psychologically damaging to the Tesla faithful.
Thiel, a co-founder of PayPal alongside Musk and a long-term ideological ally, recently signaled his bearish view not by shorting, but by aggressively liquidating his firm’s long position, slashing its Tesla stake by over 76%.
Thiel’s divestment is a calculated retreat by an investor who understands the Musk playbook better than most outsiders.
It is a powerful vote of no confidence in the stock’s current risk-reward equation.
When an insider of Thiel’s stature ignores Musk’s pleas to "hold on" to the stock and instead chooses to consolidate capital into safer, proven giants like Apple and Microsoft, it signals a deeper shift in macro sentiment.
His action suggests that the AI bubble is tightening, and money is rotating away from speculative assets where the market is priced for perfection, and into safer harbours with clearer cash flows.
Thiel’s exit confirms the feeling that the risk of holding TSLA now outweighs the potential reward, even for those with a front-row seat to the promised future.
The verdict
The convergence of Bill Gates's long-term short and Peter Thiel's rapid liquidation creates a unified message for finance professionals: the 'Musk Premium'—that extra faith-based valuation layer—is rapidly deteriorating.
The Tesla narrative is facing intense pressure from both sides: the fundamental skepticism of the old money, and the valuation fears of the new money.
For serious investors, the question is no longer whether Tesla is changing the world, but whether its stock price reflects the world as it is, or merely the world Musk promises it will be.
The billionaire bears have made their bets; the market is now waiting to see whether their predictions will be realised.