A highly volatile month for Tesla (TSLA) stock may be about to get even worse.
The electric vehicle (EV) producer has struggled for weeks, failing to garner any serious momentum. Its problems can be attributed to both company-specific factors and broader macroeconomic trends that are pushing down many high-growth tech stocks.
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While Tesla is by no means the only tech sector leader who has struggled lately, the company’s performance has been particularly concerning for many experts. Some Wall Street analysts have reduced their price targets lately, often citing concerns about the trade war, specifically U.S. relations with China that may be impacted by the tariffs.
However, one expert just issued a much more damning take on Tesla stock, urging investors to take action immediately. As he sees it, simply avoiding the troubled stock is not the best course of action right now.
Wall Street sentiment toward Elon Musk is trending downward as critiques become more aggressive.
Image source: Apu Gomes/Getty Images
An analyst has some blunt advice for Tesla stock investors
Over the past few months, many people have criticized Musk, expressing concern that his lack of focus on Tesla has compromised share prices. This list includes Wedbush Securities analyst Dan Ives, a longtime TSLA stock bull who recently reduced his TSLA price target, shocking many.
Tesla investor Ross Gerber has called for Musk to step down as CEO of Tesla, arguing that it is in the company’s best interests. But one analyst thinks that market conditions are ideal for something that would have seemed absurd a few months ago: shorting Tesla stock.
Related: Prominent Tesla shareholder has harsh words for Elon Musk
In a report published April 17, Gordon Johnson, founder and CEO of GLC Research, issued a scathing take, stating that it is time to “aggressively short TSLA’s stock through 2Q25E.” In his firm’s view, concerns regarding Tesla’s Q2 deliveries and the impact of the trade war justify betting against the company, as shares continue to trend downward.
“The guy Wall Street uses for its auto delivery forecasts, TroyTeslike, is Projecting QoQ growth in 2Q25E of +27%, +25%, +15%, and +41% in Europe, China, the U.S., and RoW (rest of world), respectively, despite a raging global trade war, where reciprocal tariffs have been levied,” states the report.
It also highlights factors such as negative sentiment toward Musk in Europe, noting that data shows his favor among nations such as the United Kingdom and Germany has declined steadily since the year began.
GLC also compared the current trade war to that of 2018, noting that “with the U.S. upping its tariffs on Chinese imports to 145% for most goods, with some imports now facing rates as high as 245%, and China responding (last week) with a reciprocal tariff of 125% on most U.S. imports, the current U.S.-China trade war is far more severe than that seen in 2018.”
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The firm notes that while it typically opts against quarterly calls, “the (wide) spread between what Consensus/TroyTeslike currently expect for TSLA’s 2Q25E deliveries” and its own estimates has never been so large.
As such, it sees the stock as an example of “mispricing” and states that it would aggressively short Tesla, though it does not reveal a short position in the company.
Elon Musk’s prediction about shorting Tesla hasn’t come true so far
These claims may seem harsh, but Johnson isn’t the only one to recognize the benefit of shorting Tesla.
In 2022, Microsoft co-founder Bill Gates revealed a short position in Tesla, drawing ire from Musk. Two years later, in July 2024, Musk, mentioning Gates by name, posted to X that anyone who held a position against Tesla would be “obliterated” once the company perfected autonomous technology and got its Optimus robot into production.
Related: Key Tesla investor makes blunt prediction for the company’s future
However, recent data shows that this prediction hasn’t panned out. In March 2024, an analysis from S3 Partners showed that short sellers had netted more than $16 billion in profits by betting against Tesla. Since then, TSLA stock has fallen even more, declining an additional 3%.
Just before that, data from market research firm Hazletree showed that the number of short sellers closing in on Tesla appeared to be increasing.
“The most important takeaway from Hazletree’s data, ‘aggregated and anonymized from approximately 700 asset manager funds,’ is that although shares did rise slightly over the past few days, Tesla’s short crowdedness score has risen as well,” TheStreet reported. “This suggests that institutional investors are taking steps to profit from downward pressure on the struggling stock.”
Now, short sellers may start doubling down on their bets against Tesla as Musk’s questionable leadership and pressure from the trade war continue to push shares down. The report ends with an ominous turn of phrase: “To the TSLA bulls, we warn… caveat emptor,” a Latin phrase that translates to “let the buyer beware.”
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
