Opinion | Mask Tweet Fuel Bubble may be about to burst

Elon Musk's business empire may be starting to wobble.

Over the past six weeks, the value of Tesla's stock has plummeted by about 40%, wiping away virtually everything it gained after the 2024 election. This reversal reveals Musk's soft abdomen. His fortune relies heavily on the bulging expectations of his rabies support. Just as these expectations diminish his strength, financial markets show that they are underrated guardrails for both Musk and President Trump's agenda.

It's fascinating to compare Musk to true business titans from the past quarter century, including Steve Jobs from Apple, Microsoft's Bill Gates, Jeff Bezos from Amazon, Mark Zuckerberg from Meta, Jensen Huang from Nvidia, Larry Page from Google, and Sergey Brin. But these individuals have created a truly enormous business that covers what Musk built with all possible metrics. Musk built an auto company from scratch, but there are no easy feats – his wealth is largely thanks to a financial cult, allowing a large group of dazzling investor followers to launch a growing list of his prominent initiatives and offer immunity from critics who question his operational decisions, his existing governance.

The actions of high wires are as follows: I dream of business, that any setback is trivial and that every achievement is heroic. To personally harness the characteristics of your return from excited investors, identify yourself as the maniac genius behind this ambitious business. Subscribe to social media to solidify your iconic status and keep your followers enthusiastic. At this point you will hit the flywheel. Other investors will search for extraordinary returns, flock to other companies' stocks, further boost your valuation, strengthen your wealth, and fill your reputation as a business mastermind.

If you're lucky, this happens when investors dream of an alternative to the poor profits available when interest rates are ridiculously low. Magical thinking about the power of technology suppresses worries about the risk of problems. The retail market is also turning stock trading into something similar to online gambling.

To understand this cult, we need to rethink what we know about finance. Financial purists like to think of financial markets as neutral arbitrators who simply document the value-creation activities of entrepreneurs. Financial pragmatists understand that prices do not necessarily reflect value, as behavioural finance demonstrates. But what if entrepreneurs could use these dynamics to produce wealth and political power?

This trick is exactly what Musk learned. Born in the explosion of social media, his messianic status created a strong cycle of strong returns for ventures that offer more cheap capital to him, diversify the empire, and more investors to attract more and more cheap capital. The surge in Tesla stock has made fans and investors devoted, and all he has to do is mention new ambitions to buy them more. And the greater the ambition stated, the more they hand him over. So why not try it for Mars? The final step in this process is to integrate the powers of the political realm so that different ambitions can nourish forever. If Musk had played it well, his empire might have been impregnable.