Clash of the Titans: Elon Musk issued an ultimatum to Bill Gates

Elon Musk has once again called out Bill Gates, this time with what he describes as a final warning. Musk wants Gates to close his long-running short position against Tesla, a bet Gates openly admitted to Musk years ago. That confession has stayed a point of tension between them ever since.

Gates has never been fully convinced that Tesla’s stock deserved its rapid rise. Even during earlier talks about working together on charitable projects, he remained sceptical.

It was during those conversations that he told Musk he was shorting Tesla shares, something that reportedly angered Musk on the spot.

According to Walter Isaacson’s biography, Musk didn’t hold back his frustration once he learned the scale of Gates’ bet. Gates had put around 500 million USD into shorting the stock, expecting it to fall.

A short position only pays off if the stock drops. But Tesla has moved the other way. The price is up more than 6% this year and has climbed nearly 150% over the past five years. For someone holding such a large short, those numbers make the situation increasingly painful.

Musk’s warning comes at a time when Tesla is preparing for its next phase. At the company’s recent shareholder meeting, he talked at length about new projects that he says could reshape several industries.

He also secured approval for a massive new compensation plan worth up to 1 trillion USD. The payout will be divided into 12 stages, each tied to company value targets and performance goals.

His previous pay plan had met every requirement but wasn’t granted because of a court ruling in Delaware. Even so, the new plan passed easily, with more than 76% of shareholders voting in favour, another sign of how much support Musk still has with investors.

The tension between Musk and Gates has always centred on Gates’ refusal to back off the short position. What reignited the issue was news that the Gates Foundation recently sold about 65% of its Microsoft shares for nearly $9 billion. Soon after, Musk sent his blunt message saying, “Close your Tesla short now or deal with the fallout”.

While the message sounded harsh, some see a bit of restraint in it. If Musk wanted to let the market punish Gates on its own, he could have stayed silent. Instead, he chose to speak up, showing one last push before the consequences become unavoidable.