Tesla: Not All Wolves of Wall Street Are Welcomed the Same

The battle for Tesla’s future is playing out like a high-stakes drama, with wolves of Wall Street divided over whether to bet against Elon Musk’s vision—or profit from its potential unraveling. As short sellers feast on the electric vehicle giant’s 50% stock plunge since late 2024, long-term investors cling to Musk’s disruptive legacy. The question remains: Can Tesla’s founder outrun the pack?

The Hunt for Tesla: Short Sellers Smell Blood

Tesla’s stock has been a magnet for bears in 2025, with short sellers pocketing $11.5 billion in mark-to-market profits by early this year. Short interest hit 81 million shares, with 20% of its float now held by bettors against its survival. Analysts at Wolfe Research labeled it a “best to short” stock, while hedge funds like Bridgewater doubled down on long positions, signaling a stark divide in investor psychology.

Musk’s Distracted Leadership Fuels the Bear Case

The largest single-day stock collapse in five years—triggered by insider sales from Tesla’s board—exposed investor anxiety over Musk’s priorities. Key insiders, including James Murdoch and CFO Vaibhav Taneja, offloaded $100 million+ in shares, signaling skepticism about Tesla’s ability to navigate its crisis. Musk’s 50% stake in the Department of Government Efficiency (DOGE) under Trump’s administration has diverted his attention, costing Tesla 50,000 units in missed sales in Q1 2025. Critics argue his far-right political entanglements and social media theatrics are alienating customers and regulators alike.

The Bull Case: Musk’s Moonshot Vision

Bulls like Ark Invest’s Cathie Wood still see Tesla as a $2,600 stock by 2030, banking on Musk’s AI and robotics ambitions. The 2025 Spring Software Update—touting customizable trunk heights and autonomous robotaxis—hints at innovation. Yet, execution risks loom large. The Cybercab’s delayed launch and 71% profit drop in Q1 underscore operational strains. Can Musk refocus on Tesla’s core before competitors like BYD (up 40% in China) outpace it?

Governance Woes and the “Key Person” Risk

Morningstar’s $250 fair value estimate hinges on Musk’s continued leadership, dubbing him a “key person risk.” Board tensions flared when reports emerged of a successor search, which Musk denied as a “deliberately false” media smear. Gerber Kawasaki’s Ross Gerber publicly called for Musk’s ouster, citing his Twitter acquisition as a governance failure. Meanwhile, lawsuits like Aaron Greenspan’s stock manipulation claim—still unresolved—add legal baggage.

The Bottom Line: A Stock Divided

Tesla’s fate hinges on Musk’s ability to balance his ambitions. With $17.6 billion in short notional value (third-highest among all stocks) and 25% of analysts advising sell, the bears dominate the narrative. Yet, Tesla’s $227.50 share price still commands a $100 billion+ market cap—a testament to Musk’s vision. The wolves are winning the short-term battle, but the war’s outcome depends on whether Tesla can revive its sales, stabilize governance, and outpace the pack.

Final Analysis: Tesla is a paradox—a company whose stock is both a symbol of innovation and a cautionary tale of overreliance on a charismatic leader. For now, the wolves of Wall Street are feeding on its struggles, but bulls bet on Musk’s next moonshot. Investors must decide: Is Tesla a diamond in the rough, or just another casualty of Musk’s multitasking? The answer lies in the next earnings report—and Musk’s ability to focus.

In a market where every move Musk makes ripples through the stock, the wolves have the upper hand—but the hunt isn’t over yet.