Shares in Tesla are heading for a sharp fall in the US as investors fear Elon Musk’s launch of a new political party will present further problems for the electric carmaker.
Tesla stock was down more than 7% in pre-market trading on Monday, threatening to wipe approximately $70bn (£51bn) off the company’s value when Wall Street opens.
If the shares fell by that much, the value of Musk’s stock would fall by more than $9bn to about $120bn. The Tesla and Space X boss remains comfortably the world’s richest person, with a wealth of about $400bn, according to Forbes.
Dammit. I actually thought there was a chance he might split the vote on the right. Now he’ll pussy out and walk the whole thing back to protect his precious share price.
I wouldn’t assume he’ll quit. He’s already got infinite money, and he and his tech multi-billionaire peers seem more interested in investing in political power nowadays.
I’m being somewhat facetious, obviously, but in all seriousness Musk’s infinite money is heavily dependent on Tesla’s share price, as it comprises the vast majority of his wealth, and Tesla’s share price is hilariously overinflated. By market cap they’re the 11th biggest company in the world, which is a fundamentally broken valuation for a perfectly average car manufacturer.
I mean, let’s put this in perspective; Tesla, by market cap, is worth thirty times as much as Hyundai. Tesla sold 1.8 million cars in 2024, Hyundai sold 4 million.
Nothing about that makes sense. Tesla’s share price is propped up by nothing but irrational, delusional belief. It’s not quite South Seas Company levels of bubble, but damn if it isn’t close. That creates a massive danger for Musk. If Hyundai’s share price dips, it climbs back up because they make cars people want, and they make a yearly revenue equal to three times their market cap. Those are solid fundamentals. If Tesla’s share price dips, it climbs back up because a delusional cult decides to keep digging deeper, but every time it does there’s always that danger that the cult might finally go “Hey, wait a minute?” If that share price crashes it will crash hard, and there’s very little reason to believe that it would ever recover. Tesla, by all means, could continue to be a $40bn company like Hyundai (and that’s frankly being generous), but their only hope of continuing to be a $1.2tn company is this weird investor Mexican standoff where the party keeps going as long as nobody blinks. This is some crypto bro diamond hands only HODL levels of insanity, and it cannot last forever.
Do I believe Musk absolutely will pussy out just because the Tesla share price gets yippy? No, I was being hyperbolic, I’m not actually putting money on it. But do I think he could? Absolutely.
The party could also split the Democrats, or at least split some of their billionaire patrons off, with “reasonable” “centrist” money no longer going to the “sensible grownup” corporate Dems.
Good. It will hurt at first but the Dems need that level of deep change and it won’t be started from within.
wouldn’t it be more of the same since the new party would siphon off democratic voters for the benefit of the american oligarchy?
Is he orchestrating a buyback or what?
Oh no
Anyway…
