Just weeks before Elon Musk became the richest man in the world thanks to the soaring Tesla stock value, the eccentric billionaire has reflected on the fickle nature of the mass market.
“The stock market is an odd thing,” Musk said in an interview with Business Insider in December. “It’s like having a manic depression constantly telling you the value of your company is. how much. And sometimes they have a good day, and sometimes they have a bad day, but the company is basically the same. The public markets are crazy.
A month later, Musk threw himself into one of the most noisy stock-market dramas in years – a multibillion-dollar battle over GameStop waged between elite hedge funds and Retail investors communicate on Reddit.
On Tuesday, when GameStop’s stock skyrocketed, Musk weighed in with a one-word tweet – “Gamestonk !!” – and a link to the Reddit forum, where the majority of the discussion took place. Musk’s message is seen as an endorsement from one of the most powerful figures on the internet, and in the days that followed, investors raised the price of GameStop to new highs.
It was a scene tailored for Musk’s online character. He was once a capitalist hero, a flashy magazine celebrity and a bomb-bombing juggernaut with 44 million followers on Twitter, serving as the CEO of two big companies with a brave that most company leaders do not dream. The richest man in the world is, somehow, also a hero of the anti-founding crowd, which has roused the digital masses tweet by line.
- Shares in GameStop, the video game retailer, soared because amateur investors, starting with Reddit, have staked heavily on the company’s stock.
- This wave has created momentum as large hedge funds short-sell GameStop stock – they are essentially betting on the company’s success.
- Sudden demand saw the share price rise from below $ 20 in December to almost $ 200 on Thursday. On paper, anyway.
- It’s not just GameStop. Amateurs have backed other companies that many major investors have shunned, such as AMC and BlackBerry.
- The bubble around this GameStop could force large investors to raise money to cover losses or dump the shares of other companies.
As a master of self-promotion, Musk regularly posts serious messages about Tesla, his electric car company, and SpaceX, his private space flight company. At the same time, he went out with Kanye West, dated a pop star and named his most recent child X AE A-Xii. And he seems to have the internet in his veins – he’s mastered meme culture, mingles with brain neurons on the web, quickly answering to most people and happily throwing Digital detractors on detractors.
His jarring combination of immense success and his willingness to wander online made him a good outsider. On Wednesday, Mr. Musk, who is worth around $ 180 billion, tweeted that Discord, a free media app that closes a popular forum with GameStop traders because of offensive language, would be “corpo” or company.
“In many ways, he reminds me of Steve Jobs,” said Walter Isaacson, who wrote a book about Mr. Jobs, the outspoken Apple co-founder. “He has an absolute passion for his products and he takes great care. He doesn’t polish himself up for public service, especially when he communicates on the web ”.
GameStop saga is a generational clash and a referendum about who controls the market, piling up retail investors – many of them young digital natives. – against hedge fund short sellers, who have bet that GameStop’s stock will fall. And in this fight, Musk most certainly doesn’t take Wall Street roots.
As a self-made billionaire, Musk has a special interest in short sellers. For years, powerful investors bet that Tesla’s stock would fall. In 2018, that pressure, production malfunctioning at Tesla and turmoil in his personal life pushed Musk to the brink of abyss. He said on Twitter that he is considering buying Tesla privately for $ 420 a share and going against the short sellers in an emotional interview with The New York Times.
On Thursday, when some trading platforms restricted investors from buying GameStop stock – a move that helped short sellers – Mr. Musk tweeted that “short selling is only legal fraud for vestibular reasons”. A Musk representative declined to give him an interview.
In other tweets, he favors calls to illegal short selling and is behind Agent Alexandria Ocasio-Cortez’s call to investigate Robinhood, one of the apps that restrained investors. buy stock GameStop.
“Here are 30 people apologizing,” he added message. “Disrespect them Get Shorty.”
Most executives dislike a slick prose, but Musk speaks the language of the web.
“Twitter algorithms love one-word responses that inspire a lot of rage or affection,” said Scott Galloway, professor of marketing at New York University. “Elon Musk is the master of that.”
His interest in selling online has left him in legal trouble. After his tweet about putting Tesla private, the Securities and Exchange Commission sued him, and as part of the settlement, he agreed to let his tweets be transmitted by experts. check information. Months later, Musk sent unsupervised tweets about critical information and the SEC ordered him to be detained by the court with disdain.
In another episode, Mr. Musk was sued for $ 190 million by a cave explorer Musk labeled a “pedo guy” on Twitter, after the diver, who helped save Thai students trapped in a cave, criticizing Musk’s plan to use the submarine as part of a rescue effort. Mr. Musk testified and is not expected to defame the explorer.
And at times, Mr. Musk has been against the media, causing his followers to attack his opponents. In 2018, he used Twitter to scorn several news agencies including Reuters and CNBC, and personally assaulted a Business Insider reporter, who was later harassed by an army of followers. follow Mr. Musk.
David B. Yoffie, a professor at Harvard Business School, said: “He likes to shock people and say outrageous things. “And at least until today, he has proven that these outrageous actions can be paid off, so he clearly feels encouraged.”
Musk doesn’t seem to be one of the GameStop auctioneers. He told Business Insider that the only public company stock he owns is Tesla, and that he plans to use his assets to dominate the universe.
“I think it’s important for humanity to become a space civilization and a species of multiple planets,” he said. “I want to be able to contribute as much as I can to the city on Mars. That means just a lot of capital ”.
Musk now has more capital. The value of Tesla’s stock has skyrocketed in recent months, with the company’s market cap seemingly decoupled from modest real-world financial activity, a force no different from what’s on. out at GameStop.
Musk himself in May tweeted that Tesla shares “too high.” And while stocks fell low after those comments, they have steadily risen since then, allowing Musk to overshadow Jeff Bezos, the founder of Amazon, into the richest man alive. (The two men are now switching back and forth for that position.)
Tesla’s rise has another impact: Last year, short sellers who bet on Tesla lost about $ 38 billion.
When Tesla’s rally soared in July, Musk was unable to contain his joy, and lashed out at his doubters and chief executives with one breath.
“Tesla is going to make awesome bright red satin shorts with gold trim,” he said tweeted, announced on a limited edition apparel from the electric automaker. “Will send some to the short-term Seller’s Wealth Commission to comfort them through these difficult times.”