November 13th 2024.
Elon Musk, the wealthiest person in the world, has taken on a new role in an effort to assist President-elect Donald Trump in streamlining the government's operations. This additional responsibility adds to Musk's already extensive list of tasks as CEO and business leader, making it challenging for him to stay focused.
Musk is known for his various ventures, such as Tesla, SpaceX, X, and other companies like Neuralink, xAI, and the Boring Company. With all of these responsibilities, he is constantly on the go, and adding a role in the Trump administration is no small feat. However, despite the potential distraction, Musk's recent endeavors have not hindered his businesses. In fact, there is a strong argument to be made that they have actually benefited investors.
Tesla, Musk's most valuable company, has faced some struggles in recent years. As other electric vehicle companies emerged in the market, Tesla saw a decline in sales and was even surpassed by Chinese competitor BYD. In addition, the company has faced federal investigations regarding its self-driving technology. Musk's long-awaited announcement of an autonomous "Cybercab" last month was met with skepticism, as some saw it as another one of his ambitious promises.
But despite these challenges, Tesla's stock has soared by 31% since Election Day. This significant increase is due to investors' belief that Musk's involvement in the Trump administration will lead to deregulation, particularly in industries and technologies that could benefit Tesla. This has been a cause for excitement among investors, with analyst Dan Ives from Wedbush Securities stating that they want Musk to have more influence in the White House.
As Tesla's largest individual shareholder, Musk has personally reaped the rewards of this surge in the company's stock. His net worth has increased by $55 billion since Election Day, according to Bloomberg's Billionaires Index. While President Trump has expressed his dislike for electric vehicles, this may not have a significant impact on Tesla. In fact, the removal of tax credits could benefit the company by reducing competition.
Furthermore, the multiple federal investigations of Tesla's self-driving technology may no longer be an issue under the Trump administration. This could be another advantage for Tesla, as they continue to lead the way in this field. Similarly, Musk's other company, SpaceX, could also benefit from the era of deregulation under Trump. With a valuation of over $200 billion, SpaceX is already ahead of its competitors. Recently, the company even came to the rescue of astronauts stranded by its rival, Boeing.
However, Musk's involvement in X, his social media platform, has not been as successful. The company has lost 80% of its value as advertisers have pulled out due to the platform's tolerance for hate speech and conspiracy theories. Ironically, Musk's purchase of Twitter in 2022 has been attributed to his descent into the "MAGA rabbit hole," leading to his increased involvement in Trumpworld and ultimately landing him a role in the administration.
This has had a positive impact on Tesla, which now has a valuation of over $1 trillion and is one of only nine companies on the stock market with a 13-figure valuation. Ives describes Musk's journey as a "Twilight Zone jigsaw puzzle," and believes that this is just the beginning.
However, there is always the chance that Trump and Musk may not remain on good terms. The President has a history of turning on former allies, and despite Musk's influence and power, Trump ultimately holds the trump card. He will be the President, and that always takes precedence.
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