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    Musk’s Tweet-Fueled Bubble May Be About to Burst

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    Elon Musk’s business empire may be starting to wobble.Over the past six weeks, the value of Tesla’s shares has plunged about 40 percent, wiping out virtually all they had gained after the 2024 election. This reversal reveals Mr. Musk’s soft underbelly: His fortune depends heavily on the inflated expectations of his rabid following. As those expectations deflate so will his power, demonstrating that financial markets are an underappreciated guardrail against both Mr. Musk’s and President Trump’s agendas.It is tempting to compare Mr. Musk to the true business titans of the past quarter century such as Apple’s Steve Jobs, Microsoft’s Bill Gates, Amazon’s Jeff Bezos, Meta’s Mark Zuckerberg, Nvidia’s Jensen Huang, and Google’s Larry Page and Sergey Brin. But those individuals created genuinely huge businesses that eclipse anything Mr. Musk has built by any possible metric. While Mr. Musk has built a car company from the ground up — no easy feat — his wealth is largely thanks to a financial cult, one in which legions of dazzled investor-followers have enabled him to launch an ever-growing list of disparate initiatives and provided immunity from critics who question his operational decision-making, his corporate governance, his obscene pay packages, and now his migration into the political sphere.The high-wire act goes something like this: Dream up a business so ambitious that any setback is trivial and every accomplishment heroic. Identify yourself as the manic genius behind this ambitious business in order to personally capitalize on outsize returns from excited investors. Enlist social media to cement your iconic status, keeping your believers so enthusiastic that their fervor beats back any skeptics who dare to bet against your ventures, even as you pitch more and more fantastical ideas. At this point you hit the flywheel: Other investors, searching for outsize returns, flock to the shares of your other companies, pushing their valuations ever higher, thus fortifying your wealth and burnishing your reputation as a business mastermind.If you’re lucky, this happens when investors are dreaming of alternatives to the poor returns available when interest rates are ridiculously low; magical thinking about the power of technology suppresses any worry about the risks of problems down the line; and retail markets are turning stock trading into something more akin to online gambling.Understanding this cult requires one to rethink what one knows about finance. Financial purists like to think of financial markets as neutral arbiters that merely record the value-creating activities of entrepreneurs. Financial pragmatists understand that prices need not always reflect value, as behavioral finance has demonstrated. But what if entrepreneurs can capitalize on these dynamics to manufacture fortunes and political power?This trick is precisely what Mr. Musk has mastered. His messianic status, which was birthed in the explosion of social media, created a powerful cycle of outsize returns on ventures that lead to investors providing him with more and cheaper capital to diversify his empire that, in turn, attracts yet more investors fearful of missing out. Skyrocketing Tesla shares have made fans and investors so devoted that all he has to do is mention a new ambition to goad them into buying even more. And the larger the stated ambition, the more wealth and power they hand him. So why not try for Mars? The final step in this process is to consolidate power in the political sphere to ensure that the outsize ambitions can be nourished forever. If Mr. Musk had played it well, his empire may have been impregnable.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Comparing Elon Musk and Jack Welch as Influential Cost-Cutters

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      Elon Musk’s hyperfocus on the bottom line has made him influential in Washington and Silicon Valley. How does that compare with the last famous cost-cutter, Jack Welch?Elon Musk is perhaps the most influential corporate cost-cutter since Jack Welch led General Electric.Eric Lee/The New York TimesA tale of the cost-cutting tapeThere’s no disputing that Elon Musk is one of the leading businessmen of our era. He has a net worth of around $400 billion these days and leads prominent businesses including Tesla, SpaceX, X, Neuralink and xAI. And he has become known for moving fast, cutting costs and pushing the workers who remain beyond what they thought possible.In many ways, that recalls a previous titan of industry, Jack Welch, who 25 years ago was considered the greatest businessman of his generation. It raises an intriguing question: Is Musk as influential a business leader as the former General Electric chief? Are the two men even comparable?By some lights, the two aren’t remotely the same. Welch was no entrepreneur but instead was the ultimate corporate chameleon, the son of a train conductor who started his career in G.E.’s plastics division and spent his whole career at the conglomerate.Musk, on the other hand, hailed from a prominent South African family, before emigrating to Canada and then to the United States as a serial entrepreneur.And while the two were both politically conservative, Welch was more of a country-club Republican, partial to golf and no fan — at least earlier on — of Donald Trump. While a savvy political operator, Welch was unlikely to have decamped to Mar-a-Lago to personally and intensely cozy up to the president-elect, as Musk did. (In 2016, Welch withdrew his support for Trump as the Republican presidential nominee, writing on social media, “Unfortunately, wrong messenger…Party must change nominee now.”)But the two shared a common business philosophy: Cut as much fat as possible.Welch believed G.E. had become too bureaucratic and bloated. He slashed billions of dollars in costs, and prided himself on weeding out employees who just weren’t making it. He became an apostle of the Six Sigma approach, inspiring other C.E.O.s. Corporate profits — and G.E.’s stock price — exploded under his watch.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

    • 113 Shares131 Views

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      Elon Musk Is Focused on DOGE. What About Tesla?

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      Mr. Musk, one of President Trump’s main advisers, has not outlined a plan to reverse falling sales at the electric car company of which he is chief executive.Elon Musk’s role as President Trump’s cost-cutting czar and his immersion in right-wing politics appears to be diverting his attention from Tesla at a perilous moment for the electric car company.Tesla’s car sales fell 1 percent last year even as the global market for electric vehicles grew 25 percent. Mr. Musk has not addressed that underperformance, and he has offered no concrete plan to revive sales. He has also provided no details about a more affordable model Tesla says it will start producing this year. In the past, Mr. Musk spent months or years promoting vehicles before they appeared in showrooms.And he has spent much of his time since the election in Washington and at Mr. Trump’s home in Florida — far from Austin, Texas, where Tesla has its corporate headquarters and a factory, or the San Francisco Bay Area, where it has a factory and engineering offices.In the past decade or so, Tesla went from a struggling start-up to upending the global auto industry. The company sold millions of electric cars and generated huge profits, forcing established automakers to invest billions of dollars to catch up. Tesla’s success has been reflected in its soaring stock price, which helped make Mr. Musk the world’s richest person.But now, he seems to have lost interest in the grinding business of developing, producing and selling cars, investors and analysts say. That could have serious ramifications for his company and the auto industry, which employs millions of people worldwide.Even before he joined the Trump administration as the head of the Department of Government Efficiency, Mr. Musk’s running multiple companies had led investors and corporate governance experts to wonder whether he was spread too thin. Besides Tesla, Mr. Musk controls and runs SpaceX, whose rockets carry astronauts and satellites for NASA and others; X, the social media site; and xAI, which is developing artificial intelligence. And he wants to colonize Mars.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump Urged to Halt Firings at the FAA

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      The Trump administration is facing pressure to protect the Federal Aviation Administration from further layoffs after hundreds of workers were fired over the weekend.The job cuts were part of a government restructuring under Elon Musk, an adviser to President Trump who is heading a cost-cutting initiative.Mr. Musk’s team has helped push through layoffs of thousands of workers across the government, including at the Transportation Department. But at the same time, the department’s secretary, Sean Duffy, has asked Mr. Musk, whose companies span the sectors of technology and transportation, to aid in addressing the agency’s aging air traffic control technology.The firings come at a time when the F.A.A., the nation’s premier aviation safety agency, is dealing with several deadly plane crashes across the country, including a midair collision between an Army helicopter and American Airlines plane that killed 67 people on Jan. 27. About 400 probationary workers — who were “hired less than a year ago” — were cut from the agency, according to Mr. Duffy, in a social media post on Monday responding to criticism from his Democratic predecessor, Pete Buttigieg.“Zero air traffic controllers and critical safety personnel were let go,” Mr. Duffy wrote.The Transportation Department added in a statement that the agency was continuing to hire and train air traffic controllers and aviation safety workers. However, union representatives say that some of the fired employees served in important support roles.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      State Department Revises Plan to Buy Armored Teslas

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      Tesla’s name was removed from a State Department document that listed planned vehicle purchases after the existence of the list was reported late Wednesday. The potential award raised questions about why the government was giving a lucrative contract to the company, which is led by Elon Musk, one of President Trump’s most important advisers.A department procurement forecast for 2025 detailed purchases the agency expected to make, including $400 million for armored Tesla vehicles. The document did not specify which Tesla model, but the electric Cybertruck, which has a body of high-strength stainless steel, would be the most suitable.Later on Wednesday, a different version of the procurement document appeared online. It referred to “armored electric vehicles,” omitting any mention of Tesla.Mr. Musk spent more than $250 million to help elect Mr. Trump, who then appointed him as the leader of a cost-cutting initiative that’s been called the Department of Government Efficiency, or DOGE.Plans to spend $400 million on Tesla pickups raised eyebrows given that Mr. Musk has been posting almost hourly on X, the social media site he owns, about wasteful government spending.Tesla and the State Department did not respond to requests for comment. On X, Mr. Musk shared a post from a supporter that said a report on the topic by Rachel Maddow of MSNBC was a “hit piece.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Elon Musk and Jeff Bezos Exchange Posts About Trump on X

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      The world’s two richest men are longtime business rivals, but now one of them has the ear of the next president of the United States.A few months ago, a three-post exchange between Jeff Bezos and Elon Musk on Mr. Musk’s X would have passed for petty sniping between billionaire rivals.But times have changed.“Just learned tonight at Mar-a-Lago that Jeff Bezos was telling everyone that @realDonaldTrump would lose for sure, so they should sell all their Tesla and SpaceX stock,” Mr. Musk wrote Wednesday night, referring to two of his companies. He added an emoji for a snickering face, with a hand covering the mouth.“Nope. 100% not true,” Mr. Bezos responded on Thursday morning.“Well, then, I stand corrected,” Mr. Musk wrote back, with a laughing-crying emoji.With President-elect Donald J. Trump’s history of animosity toward Mr. Bezos, the posts carried an unspoken message about Mr. Musk’s growing power within the incoming administration.The exchange — brief, brassy and fairly typical of Mr. Musk’s overwhelming presence on X — could foreshadow a bumpy next few years for Mr. Bezos and the companies he started, Amazon and the rocket maker Blue Origin. It was also a reminder that the power dynamics in the longtime rivalry between the world’s two richest men changed on Nov. 5.Plenty of tech executives have drawn Mr. Trump’s wrath over the last few years. Perhaps none more than Mr. Bezos, largely because he owns The Washington Post, which has frequently written critically about Mr. Trump. (The Post did not endorse a presidential candidate this year, a decision that angered many of its readers and that Mr. Bezos publicly defended.)We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

    • 75 Shares169 Views

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      Tesla’s Stock Jumps After Trump’s Victory

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      Investors believe that the electric car company led by Elon Musk will benefit from his support of the president-elect.Elon Musk defied conventional corporate wisdom by committing wholeheartedly to Donald J. Trump’s presidential campaign, donating tens of millions of dollars and running a get-out-the-vote drive.Now that bet has paid off, giving Mr. Musk a direct line to the White House that he may be able to use to bend policy in ways that could benefit Tesla, his electric car company. Mr. Trump has even bandied the idea of appointing Mr. Musk to head a “government efficiency” commission.One indication of how much Tesla could benefit was evident on Wall Street Wednesday morning, when the company’s share price jumped about 10 percent.It is too early to say how much of Mr. Musk’s newly acquired political capital he will allocate to Tesla as opposed to his other businesses like SpaceX, a major government contractor, or xAI, an artificial intelligence start-up.But investors clearly believe that a Trump administration will be good for Tesla, despite the president-elect’s often-expressed disdain for electric vehicles and renewable energy.Mr. Musk’s top priority is likely to be easing regulations on self-driving software that he has described as pivotal to Tesla’s future. That could include pressuring the National Highway Traffic Safety Administration to be less aggressive in scrutinizing the company’s technology. The safety agency is investigating whether a Tesla system that the company calls “full self-driving (supervised)” was responsible for four collisions, including one that killed a pedestrian.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      F.A.A. Clears the Way for SpaceX to Hold Starship Launch on Sunday

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      The agency said the company had agreed to study the environmental impact of its launches in South Texas and ways to mitigate harm to wildlife.The Federal Aviation Administration issued a new license on Saturday allowing Elon Musk’s SpaceX company to launch its Starship rocket again from South Texas, and it included new requirements to limit the harm to birds’ nests and other wildlife in an adjacent state park and National Wildlife Refuge.The action by the F.A.A., which came after weeks of pressure by Mr. Musk on the agency to speed up its latest review, allows Mr. Musk to go ahead with his next test of Starship, with a launch now set to take place as early as 8 a.m. Eastern time on Sunday.So far, SpaceX has been required to obtain a license for each launch. With the latest license, the F.A.A. is allowing the company to launch more than once, unless it modifies its procedures.Starship, the largest rocket ever built, has not yet carried any humans into space, as its reliability is still being assessed. But this is the spaceship that Mr. Musk is under contract to use to land NASA astronauts on the moon — and that he hopes to someday use to take humans to Mars.But as prototypes and full-scale versions of the rocket have been tested at the company’s launch site at the edge of the Gulf of Mexico near the Mexican border in South Texas, there has been widespread evidence of environmental consequences to the region, as detailed in a New York Times investigation in July.The report in The Times examined, in part, damage that a Starship launch in June caused to the fragile migratory bird habitat surrounding the launch site, including destroying eggs in nearby nests.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      SpaceX to Launch Crew-9 Mission for NASA: How to Watch

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      Two astronauts — one American, one Russian — will launch on a flight that is set to bring the Boeing Starliner astronauts home next year.Eight times during the past four years, SpaceX has provided a regular astronaut transportation service for NASA from Kennedy Space Center in Florida.Its next flight to the International Space Station, scheduled to launch on Saturday, will not be like the previous eight.There will be two, not four, astronauts aboard. Two other astronauts who were assigned to the mission will remain on Earth. And the mission, named Crew-9, will launch from a different launchpad.The shuffling is a consequence of difficulties with a different spacecraft, Boeing’s Starliner, over the summer.“The word that comes to mind for this flight is ‘agility,’” Steve Stich, the manager for NASA’s commercial crew program, said during a prelaunch news conference on Friday.Here’s what you need to know about Saturday’s launch, and why it’s unlike other recent NASA astronaut missions.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More