Tesla short-sellers have been getting creamed; why they're still betting against Elon Musk anyway

Darius Brawn, a hedge fund veteran who previously worked as a portfolio manager for SAC and Citadel, told CNBC he thinks $10 billion is a conservative estimate. He cites Tesla's plans to ramp up its Model 3 production, build new factories, make a new Roadster, Semi trucks and a Model Y vehicle, and to embark on large-scale production of its glass solar roof tiles.

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Brawn, who has shorted Tesla personally, points out that it's highly unusual for a growth company to cut its planned investment spending, as Tesla did last quarter from $3.4 billion to under $3 billion... Without raising additional capital, Brawn said, the electric vehicle maker has enough cash to last for only a few quarters.

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"I do not believe Wall Street investment banks are willing take the massive reputational, legal and financial risks associated with underwriting billions of dollars of new securities for [Tesla]" [Said Gabe Hoffman].

He and other bears also believe Tesla may not even be able to conduct an equity offering because of the existence of an undisclosed, and ongoing, enforcement action by the SEC. This action was discovered through FOIA research