- Billionaire businessman Mark Cuban offered up some advice for embattled Tesla CEO Elon Musk.
- Cuban told Business Insider that Musk should view Tesla short-sellers as “his friends.”
- “It creates demand for his stock and that’s always a good thing,” Cuban said.
Billionaire businessman Mark Cuban reacted to the series of controversies Tesla CEO Elon Musk finds himself in the midst of while also offering up a bit of advice for the fellow billionaire in an email exchange with Business Insider on Thursday.
Cuban, the owner of the NBA’s Dallas Mavericks and star of ABC’s “Shark Tank,” called Musk “a unique entrepreneur.”
“When you invest in one of his companies you are investing in him,” Cuban said. “He isn’t going to be traditional and it’s worked for him so far.”
As for what advice he would offer, Cuban said he would tell Musk the short-sellers “are his friends.”
“It creates demand for his stock and that’s always a good thing,” Cuban added.
The practice of short-selling involves borrowing shares and selling them with the hope that they could later be bought back at a lower price, allowing the seller to profit off of the difference. Short-sellers find themselves on the short-end of the stick if the share price increases, however.
Musk has openly taunted Tesla short-sellers in recent months, even tweeting that “Short shorts coming soon to Tesla merch.” In his much-maligned “Funding secured” tweet last week, Musk wrote he is “considering taking Tesla private at $420.”
Musk also said via Twitter that shareholders could either “sell at 420 or hold shares & go private.”
Tesla, one of the most shorted stocks on the S&P 500, jumped in the aftermath of Musk’s tweet, even as the company has continued to lose money.
The company is under scrutiny from the Securities and Exchange Commission, which is reportedly investigating Musk’s tweet about taking the company private. Separately, two former Tesla employees have filed whistleblower complaints with the agency. The second former employee, Karl Hansen, alleged Musk authorized spying on his employees and that the company did not tell federal authorities about information Hansen provided regarding alleged drug trafficking at Tesla’s Gigafactory in Nevada. Tesla did not respond to multiple requests for comments about these claims.
Musk’s tweet about taking Tesla private wasn’t the only controversy he stirred on Twitter. The billionaire also found himself in hot water after claiming that one of the Thai cave rescuers was a pedophile, and Musk became the subject of intense criticism for his proposal to start a website for the public to rate the trustworthiness of individual journalists.
Cuban told Business Insider he does not own any Tesla shares and never has. In an interview with CNBC earlier this week, Cuban said he owns two Tesla vehicles.
In that CNBC interview, Cuban likened Musk to the late Apple CEO Steve Jobs and Amazon CEO Jeff Bezos.
“Everyone complained at one point or another about Steve. He got fired,” Cuban said. “You look at Amazon. Everybody complained about Jeff [Bezos]. ‘He’s not trying to make any money. He’s not giving guidance. He’s not doing this, he’s not doing that.'”