Elon Musk fires back at Tesla detractor: 'Allow us to send you a small gift of short shorts'

Musk's tweet, posted early Friday, was a response to comments Einhorn made in a shareholder letter last week, in which he accused Tesla founder Musk of fraud and claimed the "accepted reality appears to be that Elon Musk is above the law."

In Musk's retort, he addressed Einhorn as "Mr. Unicorn," said the letter contained "numerous false allegations." In German, the word for unicorn is einhorn.

"It is understandable that you wish to save face with your investors, given the losses you suffered from Tesla's successful third quarter," he wrote, "especially since you've had several down years in performance" at Greenlight Capital.

"Please allow us to send you a small gift of short shorts to help you through this difficult time," Musk wrote, invoking a jab he has used with Tesla short sellers, or investors who bet against a company's stock performance.

Musk, who is known for publicly sparring with Tesla naysayers, previously sent Einhorn a box containing several pairs of short shorts, to which Einhorn responded with a sarcastic thank you via Twitter.

But Musk also invited Einhorn to tour the Tesla factory and learn more about the company, adding "I'm certain your investors would appreciate you getting smart on Tesla."

The tension between the two goes back years. Einhorn's Greenlight Capital has long had a large short position in Tesla, meaning it loses money when Tesla's stock performs well. When Tesla posted a surprise profit on October 23, sending its share price up 30%, Greenlight took a significant hit.

Einhorn's letter states that despite the losses on Tesla, his firm has returns of 24% year to date. (The S&P 500 index is up 22%.) Even so, the hedge fund has shed more than half its value in recent years, largely due to bets the firm made against big tech companies, including Amazon and Netflix.

For years, Einhorn has decried Musk's controversial leadership style and called for him to be ousted from the CEO seat at Tesla.

His October 30 letter to shareholders rails against Musk's handling of the SolarCity takeover, which Tesla acquired for $2.6 billion in 2016. SolarCity, which was run by Musk's cousin, has been the target numerous lawsuits and fraud allegations stretching back to before the acquisition.

One lawsuit filed by Tesla shareholders alleges Musk engineered the purchase of SolarCity, in which he was the majority shareholder, as a a bailout of the troubled solar panel company. That case is heading for trial in March.

Tesla has said the lawsuit is "based on the claims of plaintiff's lawyers looking for a payday" and that "they are not representative of our shareholders who support our mission and ultimately voted in favor of the acquisition."

Over the past two years, Tesla's electric car business has been beleaguered with manufacturing problems related to its rollout of the new Model 3 sedan. The company's latest earnings report signals the firm may be at a turning point. It posted a $342 million profit, indicating it's making bigger margins on car sales.