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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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      Trump’s First Cabinet Meeting Was a Display of Deference to Elon Musk

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      President Trump’s first cabinet meeting was a display of deference to Elon Musk.A couple of hours before President Trump convened his cabinet for the first time, he used his social media platform to declare that the group was “EXTREMELY HAPPY WITH ELON.”As the meeting began, it seemed to be the members’ job to prove it.The secretaries sat largely in silence behind their paper name cards, the sort of thing you need when, powerful though you may be, you are not a household name. And they listened politely as the richest man in the world loomed over them, scolding them about the size of the deficit, sheepishly admitting to temporarily canceling an effort to prevent ebola and insisting they were all crucial to his mission.“I’d like to thank everyone for your support,” Elon Musk said.In fact, Musk has not had the support of every cabinet secretary — at least not when he tried to order their employees to account for their time over email or resign. When a reporter asked about the obvious tension, Trump kicked the question to the secretaries themselves.“Is anybody unhappy with Elon?” Trump asked. “If you are, we’ll throw him out of here. Is anybody unhappy?”Nobody was unhappy. Nervous laughter rippled around the table as Howard Lutnick, the secretary of commerce, grinned and led a slow clap, which Tulsi Gabbard, the director of national intelligence, eventually joined before scratching her nose.Next to her, Kelly Loeffler, the small business administrator, applauded and attended to an itch on her ear. Secretary of State Marco Rubio offered up a single clap and gazed over at Musk, a fixed smile on his face. Robert F. Kennedy Jr., the health secretary, shifted in his seat.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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      Pushback to Latest DOGE Demand May Signal Limits for Elon Musk

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      Pushback against Elon Musk’s latest demand to government employees reveals potential limits to his harsh approach to management and cost-cutting.Federal workers are on edge over Elon Musk’s latest demand that they justify their employment.Eric Lee/The New York TimesA clash over Musk’s latest missiveMonday could bring a standoff between Elon Musk and huge swaths of the federal government, including Trump-appointed agency leaders.The fate of the latest example of Musk’s brutal management style — having government workers justify their employment by midnight or risk being fired — may reveal the limits of President Trump’s cost-cutter-in-chief’s efforts.“For now, please pause any response,” a top Pentagon official told employees this weekend, adding that the Defense Department “will conduct any review in accordance with its own procedures.” Similar messages went out from Tulsi Gabbard, the director of national intelligence; Kash Patel, the director of the F.B.I.; the State Department; and more.What’s notable is that Trump loyalists lead many of those organizations. But The Times reports that many agency leaders are “tired of having to justify specific intricacies of agency policy and having to scramble to address unforeseen controversies” raised by Musk, especially after the billionaire’s so-called Department of Government Efficiency gained unprecedented access to government systems.It raises the prospect that the Musk approach has its limits. Yes, Musk made a similar move at the social network once known as Twitter. But the federal bureaucracy moves much more slowly than a private company — and has unions who can push back.The president of the American Federation of Government Employees, the largest such union, declared Musk’s missive “plainly unlawful” and added that the Office of Personnel and Management was being directed by “the unelected and unhinged Elon Musk.”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 Tells Federal Workers to Detail Work in an Email or Lose Their Jobs

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      Elon Musk deepened the confusion and alarm of workers across the federal government Saturday by ordering them to summarize their accomplishments for the week, warning that a failure to do so would be taken as a resignation.Shortly after Mr. Musk’s demand, which he posted on X, civil servants across the government received an email from the Office of Personnel Management with the subject line, “What did you do last week?”The missive simultaneously hit inboxes across multiple agencies, rattling workers who had been rocked by layoffs in recent weeks and were unsure about whether to respond to Mr. Musk’s demand. Officials at some agencies, including the F.B.I., told their employees to pause any responses to the email for now.Mr. Musk’s mounting pressure on the federal work force came at the encouragement of President Trump, who has been trumpeting how the billionaire has upended the bureaucracy and on Saturday urged him to be even “more aggressive.”In his post on X, Mr. Musk said employees who failed to answer the message would lose their jobs. However, that threat was not stated in the email itself.“Please reply to this email with approx. 5 bullets of what you accomplished this week and cc your manager,” said the Office of Personnel Management message that went out to federal employees on Saturday afternoon. The email told employees to respond by midnight on Monday and not to include classified information.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

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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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      Banks Sell $4.7 Billion of X’s Debt, in a Sign of Investor Demand

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      The social media company is attracting investor interest because of Elon Musk’s close ties to President Trump and a recent jump in revenue.When Elon Musk bought X for $44 billion in 2022, more than a quarter of that was financed by loans from banks including Morgan Stanley. Banks normally quickly sell off such loans, but in this case they kept much of that debt because investors were reluctant to bet on the social media company’s floundering business.Mr. Musk’s newfound power in President Trump’s administration has helped change investors’ minds.On Thursday, the banks sold roughly $4.7 billion of X’s debt, according to two people familiar with the transaction, more than the $3 billion that they had originally intended to sell. Mr. Musk, who has become a close adviser to the president and is running a government efficiency initiative, has faced increasing questions about whether the companies he leads — including the electric automaker Tesla and the rocket company SpaceX — are benefiting from his position as Mr. Trump’s right-hand man.X has become a go-to platform for information on the administration’s plans, which Mr. Musk broadcasts to his account’s more than 217 million followers. Advertisers have returned in droves to X, people familiar with the deals said, fueling a boost in revenue. The company told investors that its revenue in December jumped 21 percent from a month earlier, a person with knowledge of the finances said.An X spokesman and Morgan Stanley declined to comment. Bloomberg previously reported the jump in revenue and details of the transaction.Selling the debt — which totaled $12.5 billion at the time of the acquisition — helps Mr. Musk and the banks, which have been saddled with it for two years. Just two months ago, investors were negotiating to buy that debt at a loss of 10 percent to 20 percent for the banks, one person involved in the discussions said.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’s X Settles Trump Lawsuit

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      X has agreed to pay in the range of $10 million to settle a lawsuit brought by President Trump over the 2021 suspension of his account on the social media platform, according to a person briefed on the matter.The company, then known as Twitter, removed Mr. Trump from its platform after the riot at the U.S. Capitol on Jan. 6, 2021, citing his inflammatory posts and arguing they could lead to more violence. Mr. Trump sued, claiming Twitter and other tech firms that removed his accounts had wrongfully censored him.Elon Musk, now X’s owner and a close adviser to the president, reinstated Mr. Trump’s account shortly after acquiring the company in 2022. Mr. Musk has thrown his support behind Mr. Trump, donating more than $250 million to his campaign, and is now running a government cost-cutting initiative called the Department of Government Efficiency.The settlement further cements the relationship between Mr. Musk and Mr. Trump. Details of the agreement were not made public in court filings, but X and Mr. Trump notified the Ninth Circuit Court of Appeals on Friday that they had agreed to dismiss the lawsuit. Both parties agreed to pay their own costs, according to a court filing.The settlement amount was previously reported by The Wall Street Journal. A spokesman for X did not respond to a request for comment. It was not immediately clear what entity would receive the money.Mr. Trump sued Twitter, Facebook and Google, the parent company of YouTube, after the platforms suspended his accounts in the wake of the attack on the Capitol. After the riot, Mr. Trump had used his Twitter account to praise his supporters, calling them “patriots.”Mr. Trump also posted that he would not attend the inauguration of Joseph R. Biden Jr., which Twitter’s safety teams said at the time could have signaled his supporters to stage another attack on that event. Twitter said it suspended Mr. Trump’s account “due to the risk of further incitement of violence.”Meta, the parent company of Facebook, Instagram and WhatsApp, settled its lawsuit last month, agreeing to pay the president $25 million. Mark Zuckerberg, Meta’s chief executive, has also courted Mr. Trump in recent months, donating to his inauguration fund and making sweeping changes to Meta’s policies to allow for more types of speech across the company’s apps.In December, ABC News agreed to pay $15 million to settle a defamation lawsuit by Mr. Trump. ABC News said it would donate the money to Mr. Trump’s future presidential foundation and museum.Meta agreed to similar terms in its settlement with Mr. Trump. About $22 million will finance Mr. Trump’s presidential library, with the remaining $3 million set aside to for Mr. Trump’s legal fees and other plaintiffs who joined the lawsuit. More

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      PlayStation Network Is Working After 24-Hour Outage, Sony Says

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      Users on social media had complained that they could not access their games after the unexplained outage began on Friday night.The PlayStation Network, which users of the Sony PlayStation platform rely on to play games, download content and access apps, started working again on Saturday night after a 24-hour outage that left customers frustrated.“All services are up and running,” PlayStation announced on its website around 7 p.m. on Saturday. The problems, which prevented many customers from “launching games, apps or network features,” were first reported at 7 p.m. on Friday, the company said.“PSN has been restored,” the company’s support team posted on X at 6:58 p.m. on Saturday. “You should be able to access online features without any problems now.”The company did not explain the cause of the outage and did not immediately respond to an email seeking more information.The issues affected users of PlayStation’s most popular offerings, including its console and web products. Account management, gaming and social, PlayStation Video, PlayStation Store and PlayStation Direct were among the impacted services.PlayStation creates software and hardware, including hugely popular gaming consoles. Users play video games and run apps like Netflix, Spotify and YouTube through the PlayStation Network.On social media, some users reported that they were able to use their PlayStation on Saturday afternoon but many were still experiencing issues into the evening.During the outage, some users reported that they were not able to play offline games, a testament to how severe the server problems were, as offline games usually do not face the same issues that online games will sometimes experience.As users complained on social media, other brands fired off trolling messages.“Calling all gamers: this play station still works,” Krispy Kreme posted on X. Krispy Kreme offered free glazed doughnuts for two hours on Saturday “because sweet rewards don’t need a server.”“bet y’all want physical copies now,” GameStop, the struggling video game retail chain, said on X. More