Elon Musk @elonmusk on X said: "Bill Gates took a roughly 1% stake in Tesla as a big short position, and the unrealized loss may have exceeded $10 billion so far." He also warned: "If Tesla becomes the world's most valuable company, this short position could even bankrupt Gates." (However, this is more Musk's exaggerated statement; the actual risk mainly lies in the huge unrealized losses.)

The core of this story is not the personal feud between two tech giants, but the extreme danger of high-leverage trading. Short selling stocks essentially involves borrowing shares to sell, betting that the stock price will fall so you can buy back at a lower price for profit. But if the stock price rises against the trend, losses are theoretically unlimited—because the stock price can rise without limit. According to Musk, when Gates initially shorted (initial position reportedly around $500 million), Tesla was in a relatively low phase. Who would have thought that years of soaring stock prices would turn his position into a massive unrealized loss? By the end of 2025, Tesla's market cap had reached about $1.6 trillion, far exceeding the level at the time of the short, which also amplified the scale of the unrealized loss.

Many traders use margin financing or options to amplify their positions. A single misjudgment can trigger forced liquidation (margin call). Historically, there have been cases of huge losses due to high-leverage short selling: during the 2021 GameStop short squeeze, many hedge funds lost billions; even earlier, shorting Volkswagen led some short sellers to lose everything. Even the world's richest person, if heavily leveraged in a "crazy rising" stock, can see their wealth shrink significantly with one mistake.

In summary, this event also reminds us: in trading, always stay rational, control leverage well, or you might really face huge losses overnight.

$TSLA