I am become meme,
Destroyer of shorts
— Elon Musk (@elonmusk) February 4, 2021
He has a lot of work in front of him to stake out territory on Mars, but Elon Musk’s weekly trips to the moon are becoming a regular thing. He tweets about a financial instrument, any financial instrument, and it immediately shoots up by double-digit percentages.
What’s going on here? A few possibilities come to mind, with potential overlap for some or all of them:
– Tesla is a big, juicy short target. By market capitalization Tesla has become the largest car company in the world. It’s not even close. Tesla is 20x a Ford or a General Motors, 8x Volkswagon, 4x Toyota, the next closest. Despite constituting nearly half of the world’s automobile market cap, Tesla accounts for around 0.01% of the world’s automobiles. There are a lot of speculators who’ve taken haircuts shorting Tesla. What goes up must not necessarily come down, but it probably will. Who wants to take that risk, though? Musk is signaling to future shorts that the path is perilous. Think the reddit raiders were bad? Musk is worth nearly $200 billion. He can remain ‘irrational’ far longer than Melvin Capital can remain solvent.
– Musk is passing comment on the reality that the global financial system exists in a post-fundamentals world. One guy’s tweets have more influence on a company’s stock price than the company’s quarterly numbers do. And what is said at an FOMC meeting has more influence on the broader market than any of the various economic indicators–jobs reports, manufacturing indices, inflation measures, trade balances, etc–do. Dogecoin was created as a lark. Musk pumping it for personal gain is possible but seems petty. Even with its two meteoric hops up, the entire market is one-half of one percent of Musk’s net worth.
– Musk wants to smack around the financial class. Much of what he’s done has been government-funded, particularly by NASA. There are more than a few members of Big Capital who have positioned themselves to profit from his demise. He enjoyed beating them before and he’s enjoying beating them now. Big Capital lost over $30 billion shorting Tesla last year. This wasn’t lost on the reddit raiders, either.
– He has fun poking sacred cows. While most of his class is worried about overpopulation, he’s worried about a population crash (he has six surviving children). When he should be doing corporate media, he goes on Joe Rogan. He’s South African and his brother and former business partner admires Charles Murray.