Elon Musk is in freefall

There is an old saying, often misattributed to various vastly wealthy men, which goes roughly like this – after a certain point, money is just a way of keeping score.

That’s certainly chimed with Donald Trump’s approach to life. The president is never happier than when he’s surrounded by fellow billionaires, but more significantly he has obviously derived great pleasure from boasting about stock market gains under his presidency, and America’s booming economy.

If Trump does indeed see market performance as a way of keeping score on his presidency, the last week has been especially brutal for him. Trump, who talked through the election about the huge boom Americans could look forward to from day one of his presidency, has had to uncharacteristically prepare the ground for tougher times. He’s even acknowledged a recession might be possible, if only by refusing to rule it out.

But if money keeps the score, government officials are usually out of the game entirely. Public officials tend not to be all that wealthy, and usual ethics rules require them to divest themselves of any financial holdings that might present even the perception of a conflict of interest with their government duties.

Evidently, the game has changed, as Elon Musk is in a role with unprecedented access and influence right across the whole scope of the government, while also serving as the CEO, chair, and often the main shareholder of multiple multi-billion-dollar companies. Because the largest of these, Tesla, is publicly listed, the stock market can keep score on Elon Musk in real time.

More than almost any other stock in history, Tesla stock is a bet on Elon Musk as an individual – it is certainly not priced like a car company. Even after its recent woes (of which more later) Tesla sells fewer than 1% of the world’s cars, and yet it is worth more than every other carmaker combined.

Some of this is because Tesla promises magical things, if only people will wait a few years. Full driverless operation has been supposedly imminent for at least five years now. Tesla claims to be launching driverless taxis in a few years. It has a range of humanoid robots apparently in development.

All of this has helped to uncouple Tesla’s stock price from the boring business of actually producing and selling cars. Even before Musk entered government service, Tesla’s range of cars was ailing, manufacturing was plagued with defects, its new model – the cybertruck – is not road legal in much of the world, and seems to occasionally self-immolate. Tesla was also beset on all sides from competition by ever-better electric cars from rival companies. It was no longer the cool kid on the block.

But Tesla was the only listed stock of an Elon Musk company. Musk tends to spin off every new initiative into a separate business. SpaceX is its own company, as is X (formerly Twitter). Elon’s AI effort is in a distinct corporate entity again, as is his human-machine interface company Neuralink.

The argument that investing in Tesla is investing in whatever Elon Musk does next doesn’t hold in practice – but that hasn’t stopped people doing it all the same.

Rational or not, the Tesla stock price is a direct reflection of the market’s confidence and belief in Elon Musk – and for a time after Trump’s victory, all he did was win.

Tesla, Elon Musk’s avatar in the marketplace, was worth about $750 billion the day before Donald Trump’s election win. If that was the market’s assessment of Elon Musk’s worth without Trump behind him, what would it mean for Elon and Donald to be taking the White House?

Suddenly, numerous obstacles in Elon’s way were simply not a factor – Musk’s companies were facing more than a dozen regulatory investigations or inquiries, all of which he would now be able to sweep aside. Musk receives billions of dollars in government subsidies and contracts – which he would now be able to arrange to his convenience. Musk would have access to sensitive government information of which contractors could usually only dream.

And Donald Trump, who was busily cashing in himself with the launch of a new cryptocoin, hardly seemed like the kind of president who would let legal niceties get in the way. So the market came to a new assessment of what Elon Musk might be worth under this new state of affairs, and Tesla’s valuation soared – reaching a pinnacle of around $1.5 trillion dollars, all but doubling Elon’s net worth in a few short weeks.

Today, all of that has disappeared once more. Tesla is worth less today than it was the day before Trump won the presidency. But the striking thing is that all of Musk’s unbelievable new advantages from his federal government job are still there.

Musk has taken over his regulators. He has swept out his enemies. He’s got access to unbelievably sensitive government data. He has managed to use the White House and the serving president for an extended Tesla infomercial – and despite all of that, the market still thinks he’s worth less now than he was before Trump got elected.

No verdict could be more damaging than that. Elon Musk is playing the game with every cheat code enabled, on the easiest setting, and with the president in his pocket – and his score is still falling. For now, at least, the magic is gone.

The story is getting harder and harder to tell. Even if Tesla’s valuation wasn’t really about the cars, the plummeting sales figures around the world start telling a story. The graffiti, protests and even firebombing of Tesla dealerships adds vivid detail. Unless MAGA can be persuaded to buy electric cars to “own the libs”, Tesla’s future as a car company looks doubtful.

Stocks rise and they fall, and Tesla’s has certainly been volatile enough. But a stock that for years has had far less to do with the actual business it’s supposed to represent – and a lot more to do with faith in its Elon Musk personally – is down when everything suggests it should be up.

If the money keeps score, then Donald Trump is struggling – but Elon Musk is in freefall, right when he should be riding high.

Elon Musk is a man vain enough to pay professionals to work for hundreds of hours just to burnish his “credentials” as a gamer. How is he going to take such an obvious loss in the only one that really matters?