San Francisco; New York: Tesla Inc’s Elon Musk is putting some money where his trash-talking mouth is. The chief executive officer bought about $9.85 million (Dh36.17 million) worth of Tesla shares on Monday, his biggest purchase since March 2017, according to a regulatory filing. Musk, 46, already was Tesla’s largest shareholder, and his stake is now approaching 20 per cent, according to data compiled by Bloomberg.
The purchase comes just days after Musk taunted Tesla short sellers in a series of tweets about his combative earnings call last week. He promised to “burn” those betting against the electric-car maker, which hasn’t earned an annual profit in its 15-year history and has blazed through more than $1 billion in cash during three of the last four quarters.
“The sheer magnitude of short carnage will be unreal,” Musk wrote in one of his posts Friday. “If you’re short, I suggest tiptoeing quietly to the exit.”
Tesla shares have more than recovered the loss sustained after Musk ranted against what he said were “dry,” “boring” and “bonehead” questions from analysts on the company’s earnings call last week. The stock rose 3 per cent on Monday, boosting Tesla’s market capitalisation to about $51.4 billion. The carmaker has again surpassed General Motors Co on that basis by about $190 million.
Short interest in Tesla has been unrelenting, increasing by almost 400,000 shares on Thursday, the day after the conference call, and exceeding 40 million shares for the first time, according to S3 Partners LLC.
“If short-selling demand continues to grow at this pace, short sellers will feel the angst that Tesla Model 3 buyers are feeling — with demand outstripping supply,” Ihor Dusaniwsky, an S3 Partners managing director, wrote in a report Friday.
“Lack of stock loan supply, increased stock loan costs and tapped-out risk limits will eventually curtail short selling in Tesla,” Dusaniwsky said. “As we get closer to this happening, Tesla’s stock price will be more and more dependent on long shareholder buying and selling — the shorts will be on autopilot and the longs will be in the driver’s seat.”
Brick-making business
Separately, Elon Musk tweeted out plans Monday for yet another side venture: alleviating the nation’s housing crisis.
“The Boring Company will be using dirt from tunnel digging to create bricks for low-cost housing,” he wrote in a tweet about his nascent tunnelling enterprise.
A company spokesman confirmed the plans, saying the bricks will come from the “excavated muck,” and that “there will be an insane amount of bricks.” Musk has also suggested he has plans to sell them, and the company said future Boring Co. offices will be constructed from the company’s own bricks.
How many affordable housing units those bricks will create, though, is a different matter, says Juan Matute, a lecturer at the University of California, Los Angeles, and associate director of UCLA’s Institute of Transportation Studies.
Musk’s tweet “assumes that housing costs are driven by construction materials, and particularly, construction materials that can be replaced by bricks,” Matutue said. “That’s not the case.” At least in California, the only state where Boring Co. has started digging a tunnel, land and labour drive prices more than anything else.
Going forward, a spokesman said, the company plans to make bricks out of excavated mud from all Boring Co. tunnels, not just the one currently under construction in Hawthorne, California, on land owned by Musk’s Space Exploration Technologies Corp.
When it comes to actual housing construction, bricks tend to be expensive, in part because assembling brick walls takes more work than other options, such as putting up panels. And because bricks don’t stand up well to earthquakes, a major concern in fault-riddled California, building codes typically require buttresses such as reinforced steel and rebar when bricks are used.
On its website, Boring Co. says bricks could potentially also replace concrete in a portion of its tunnels’ linings, which it says would help the environment as concrete production creates significant greenhouse gas emissions.
