“There’s a perniciously false effective markets argument made for shorting,” says Tesla CEO Elon Musk. “It is vice disguised as virtue. Short selling is frankly used against the public. We don’t have shorting in private companies. The vast majority of companies, over 90 percent are private, and you cannot short them. Yet somehow, private companies get things done.”
Elon Musk, CEO of Tesla, explains in an interesting interview with Sandy Munro, why short selling is an attack on the people and is actually vice but described by its greedy advocates as virtue:
Short Selling Is An Attack On The People
There are very few areas in life where you can sell things that you don’t own. Short selling, where you can sell shares that you don’t own, when I said it was vestigial I meant it came from an era when stocks were traded by people traveling on horseback to exchange stock certificates. In order to have the transaction speed not take weeks, somebody would say well the stock certificate is coming on that horse. I don’t have the stock certificate right now but I promise you that I’m getting the stock certificate and the rider is going to be here in New York from Chicago in three days and then I’ll be able to give you the stock certificate.
That’s where this whole silly thing arose. But then the problem is like the way short selling is used today is it’s frankly used against the public. Most people aren’t aware that short selling even exists. Then the ones that are aware very few of them know actually how to use it. It’s basically like .01 percent of stockholders know how to use short positions to get ahead. I think it is effectively an attack on the public.
It Is Vice Disguised As Virtue
Tesla was under a massive attack by the short and distort, where they take a short position and then they do everything possible to trash the company six ways to Sunday, and they were successful. This has now happened to Tesla twice. It happened in 2013, and it happened in 2017 through 2019. The intensity of the attack was crazy. I was like man, it would cause you to lose faith in humanity, the extent of the greed of this that went on.
We don’t have shorting in private companies. The vast majority of companies, over 90 percent are private, and you cannot short them. Yet somehow, private companies get things done. There’s a perniciously false effective markets argument made for shorting. It is vice disguised as virtue.