Tesla’s downfall fuels massive profits for investors, while Elon Musk watches his empire crumble.

Elon Musk, the South African centibillionaire and CEO of Tesla, has been facing a dramatic decline in his electric vehicle company’s fortunes, as its stock price plummets in financial markets. While Musk remains one of the wealthiest individuals globally, with a net worth exceeding $300 billion, his stake in Tesla is no longer his most prized asset.

The once-prominent electric vehicle giant is now a shadow of its former self, and many investors are finding themselves reaping massive profits at Tesla’s expense.

Tesla’s stock price has been in freefall, with the company trading at just over $225 per share as of Tuesday’s market close. This represents a staggering drop of more than 50% in value within the last three months. For Musk, this is a bitter pill to swallow, as his once-untouchable stake in Tesla has been overtaken by SpaceX, his other company.

According to reports, SpaceX’s value now stands at about $20 billion higher than his Tesla holdings. Musk’s gamble with Tesla is no longer paying off, and his financial empire is facing a significant shift.

However, while Musk suffers, a different set of investors is thriving. Hedge funds and investors betting against Tesla — known as “short sellers” — are now seeing incredible returns. In the past 90 days alone, these short sellers have amassed $16.2 billion in profits.

These investors had placed bets on Tesla’s stock continuing to decline, and their foresight has been rewarded as the company’s value crumbles. For these hedge funds, Musk’s missteps have been nothing short of a windfall.

One such investor, hedge fund manager Per Lekander, who oversees a $1.5 billion fund specializing in clean energy, has been vocal about Musk’s mismanagement. “Tesla had a very strong brand value, and Elon has managed to totally destroy it,” Lekander commented.

“Musk is on the wrong side of his buyership. It’s not people with cowboy boots who buy Teslas.” This reflects a growing sentiment among those who believe Musk’s personal actions and political affiliations are driving the company into a decline, distancing Tesla from its core customers.

The company’s downward spiral is expected to accelerate further, with major financial institutions like JPMorgan predicting that Tesla’s share price could fall to just $120 per share by late December. The reasons for this grim outlook are multifaceted. Tesla’s sales have stalled in Europe, partly due to Musk’s controversial endorsement of a far-right political party in Germany.

This move alienated a significant portion of the company’s European customer base, where Tesla had once enjoyed considerable success. Additionally, protests have erupted at Tesla dealerships across the United States, with Americans expressing their anger over Musk’s mass firings of federal workers. This public outcry has only added to the pressure on Tesla’s stock.

Musk’s political activities have become a major point of contention, with public outrage over his affiliations continuing to intensify. The impact on Tesla’s stock has been undeniable, as more investors bet against the company.

In fact, the number of Tesla shares being shorted has increased by over 16% in the past month alone, signaling a growing lack of confidence in the company’s future. As public opinion continues to sour, it’s clear that Musk’s personal brand is becoming intertwined with the company’s declining fortunes.

For many, Tesla’s stock was once considered a momentum stock, a high-flying asset that would continue to soar as long as Musk remained in the spotlight. However, as the company’s performance has faltered, investors have begun to see Tesla as little more than a glorified “memecoin,” a term used to describe assets driven more by hype than by solid fundamentals.

Short seller Marc Cohodes, who has no position in Tesla, summed up the situation: “A lot of these momentum stocks like Tesla have become glorified memecoins. When they went up, everyone buying thought they were smart. Now they’re falling, and they’re causing huge damage.”

The dramatic rise and fall of Tesla’s stock price have captured the attention of investors worldwide, and many are wondering how long this trend will continue. Tesla was once seen as a revolutionary company, a symbol of the future of transportation and sustainability.

However, the recent events surrounding Musk’s leadership, combined with external factors like political controversies and public protests, have tarnished the company’s image. With short sellers profiting from Tesla’s misfortune, the company’s stock may continue its downward trajectory for the foreseeable future.

Elon Musk, the visionary entrepreneur who once transformed Tesla into a global leader in electric vehicles, now faces the consequences of his actions. His involvement in politics, his controversial business decisions, and the negative publicity surrounding him have all contributed to Tesla’s downfall.

For the short sellers who bet against the company, this is a moment of triumph. But for Musk and Tesla, the road ahead looks increasingly uncertain as the company’s once-thriving empire continues to crumble.