The Elon Musk fan club. It’s not just pale incels. Musk believers are spread far and wide. The US government has contracts worth a combined $19 billion with Tesla and Space X. These firms scoop up $8 million a day from US tax payers, benefitting from the Biden Administration’s Inflation Reduction Act.
In turn, the reliable income stream catches the attention of both value and growth investors, leading to ballooning corporate valuations, like Tesla’s $1.5 trillion price tag in December. Musk’s companies have exploded across the stock market, his face is everywhere and Trump proclaims he’s a genius. Investors of all calibres (even sustainable and ESG) are opening their wallets for this guy, and business gurus worldwide are keen to emulate his success.
But what happens when Trump gets weary of Musk’s antics? Would companies like Tesla continue to thrive without the chunky government contracts? And what would the effect be on our portfolios? Is Musk really the self-made genius that he aggressively markets himself to be? Or are we falling under the dangerous spell of credit snatching, halo effects and wealth bias? In this blog, I’ve set out to find the point where the bullshit ends, and the value begins.
Buying the title of “founder” for Tesla
The “genius” label of Elon Musk helped him bulldoze onto the rich list. But he didn’t actually create the innovative company he’s most associated with. He stole it. You know that middle manager who waits until the project is going really well, before rushing in to claim the bankers’ bonus for it? That’s Musk.
Musk aggressively purchased the title of “founder” for the up-and-coming Tesla Motors in 2009. The firm – which was created by Martin Eberhard and Marc Tarpenning in July 2003 – had already been operating successfully, winning prestigious awards and garnering the attention of Daimler AG, maker of Mercedes-Benz for six years. While Musk was an early investor, pouring millions of dollars into development, Tesla was not his innovation.
Following a bitter legal battle and credit grab in 2009, Musk pushed out the original founders and claimed the title as his own.
This wasn’t the first time Musk pulled this stunt. In 1999, he kicked the three founders of up-and-coming challenger bank X.com, taking the title of Founder and CEO for himself. When the firm merged with PayPal the following year, Musk conveniently seemed to adopt the title of Founder too.
The title grabs made a difference. Musk’s status as the brains behind Tesla (and the billions that came with it) give investors and governments confidence to fund his new businesses.
Self-made … With $40,000 from his parents
To keep up his genius status, and the investment flowing, Musk strategically pushes the narrative that he is a self-made man. And omg. His fans genuinely think he grew up like a character on Les Miserables, begging for bread. They peddle this story all the time.
Musk chooses his words very carefully, commenting on the posts of people who perpetuate the myth that he grew up poor. “I grew up in a lower, transitioning to upper, middle income situation”, he sobs on Twitter. “Haven’t inherited anything ever from anyone, nor has anyone given me a large financial gift”.
But that is not true.
Elon comes from an extremely wealthy family, with a rich-ass daddy and a mother who was a Vogue model and finalist for Miss South Africa. In the words of Elon’s father, Errol Musk, “We had so much money at times we couldn’t even close our safe,”. The family had their own airplane, a 48-foot yacht and a bush farm. Errol also owned half an emerald mine in Zambia.
Errol tells stories of how his children would wander into jewellery stores with the precious gems in their pockets and come out clutching thousands of dollars. Imagine that. Probably on the same street, there were beggars with literally nothing.
This is not a “lower, transitioning to upper-middle situation”, this is an extremely wealthy family, living in apartheid South Africa, alongside people who actually were struggling to survive in extreme poverty. Elon Musk is either lying, or very out of touch. But I personally think he’s lying because of how delicately he phrases things.
Musk chooses his words carefully, saying that he’s never received “a large financial gift”. But that is misleading. His father invested upwards of $30,000* in Elon’s, his brother Kimbal’s and Greg Kouri’s first business, Zip2, and bought him a car as well. “Without that money they could not have lasted“, Errol comments. His mother also reportedly put $10,000 into the venture. Let’s just say that’s $40,000 more than my parents invested in my business.
*Errol claims it was $40,000 but concedes that there was a commission. Elon Musk says it was $28,000 … But we know he re-writes history to make himself look poorer. Probably the truth is upwards of $30,000, right?
The $305 million sale of Zip2 in 1999 is where Musk first got his taste of big money. It was from here onwards that he would pay experts to bring his vision to life, or invest in companies that he would later claim were his own. Space X and Neuralink are both examples where he has lofty titles, but does very little of the actual designing. Both these companies are also plagued with malpractice lawsuits.
So, for me the real question is… How much work did Elon actually do for Zip2? And was he just riding on the coattails of his mate and brother? To be honest, it’s very hard to validate. When I’ve been researching the company, a lot of the text is about how Elon’s mother had to sleep on a rug on the floor, and the family were desperately poor… which makes me suspect that a Musk fan wrote the page to make a point. Let’s give Elon Musk the benefit of the doubt and say that he did indeed do one third of the innovating in his first company. But the “self-made” claim. Nope. If you’re 24 and your parents give you $40,000 to start a business. Not self-made.
Driven by daddy issues
One thing is clear though, although Musk was a little rich kid, he did have an unhappy childhood. He’s talked about it extensively, and frankly, you can see it. Errol Musk seems like a real motherfucker, who murdered intruders, has children with his own stepdaughter and abused his wife.
I think it’s fair to say that Elon Musk has some daddy issues. And I sympathise, because honestly, I do too. I’m also estranged from my father.
But Musk’s constant need for validation through self-worth, putting minorities down and looking for a new daddy in Donald Trump is not something that we should be investing in. I don’t altogether blame Elon for the way he is, because I don’t think he can help it. But as investors, it’s our job to analyse him correctly, not skewed towards how he wants us to see him.
From Chief Twit to Chief Twat
Musk aggressively drives the narrative that he is a self-made genius, fiercely squashing down any evidence to the contrary. Part of the reason it works so well for him is because he falls beautifully into the venn diagram of two psychological concepts – the halo effect and the wealth bias.
Elon Musk truly is excellent – maybe unparalleled – at scaling-up (other peoples’) tech companies. So he must be good at EVERYTHING ELSE, right? That’s a subconscious psychological bias called, “the halo effect”. We need to make a conscious effort to recognise that just because Musk made efficiencies in an electric car company, does not mean that he can make efficiencies in a federal government.
Sadly when it comes to high-class and wealthy white men, Western cultures are more prone to this bias. We’re hard-wired to associate wealth with success, known as “wealth bias”. The USA especially suffers from this, with three quarters of Christians believing in the prosperity theology, that God rewards good people with wealth. Yikes.
Musk ticks both of these boxes. He is very good at some things, and he is the second wealthiest man in the world. The halo effect and the wealth bias combine together to make us twice as likely to believe him… even when there is no evidence to suggest that he knows what he is talking about.
And the world has got it really bad for Elon Musk. The month before he bought Twitter (March 2022), data showed his popularity levels hitting 93% for Gen X and 90% for Millennials.
But shortly after, the first cracks started to show. Musk’s chaotic takeover of Twitter (now X) in April 2022 blew a hole in his reputation as the world’s best CEO. From Chief Twit to Chief Twat, his haphazard management style and mass-sacking saw share prices slump steadily. Twitter is now worth just a fifth of what it was when he bought it, according to analysis by Fidelity.
Yet despite the thundering collapse of Twitter into a cesspit of bots and far-right propaganda, some surprisingly influential business leaders still share hashtags like #BeMoreElon. They admire his move-fast and process-slashing culture. But lives and cars are not the same. The moment we apply this approach to fellow humans (like those on X) on the animals used in Neuralink, we see how catastrophic this management style becomes.
Move fast and break things
In 2022, the treatment of monkeys in Elon Musk’s Neuralink was so depraved that it called for a federal investigation. Musk’s relentless “move fast and break things” culture has resulted in monkeys having their brains mutilated and left to die in pain.
The PCRM cite “rushed actions by company employees”, as a key motivator for the cruelty. And a senior employee had been repeatedly warning of “the rushed schedule” which “resulted in under-prepared and over-stressed staffers scrambling to meet deadlines and making last-minute changes before surgeries”. The relentless pace forced brutal hack jobs and unnecessary suffering. It’s disgustingly bad management.
If you want to read more (and I understand if you don’t), The Physicians Committee for Responsible Medicine has a chilling breakdown of the treatment of one monkey called “Animal 15″. It’s a hard read. She was one of 1,500 animals (and counting) that suffered a nasty death at the hands of Neuralink.
When rumours of cruelty circulated, Elon Musk lied. Brazenly. “No monkey has died as a result of a Neuralink implant”, he posted on X. “First our early implants, to minimise risk to healthy monkeys, we chose terminal moneys (close to death already)”.
As well as a grotesque double lie, Musk also made a revealing typo. Money. Not Monkeys. Because, let’s be honest, that’s all he sees. He doesn’t give a shit about the suffering of others. He just cares about his own profit margin.
There’s another disturbing side to Musk’s management style, possibly triggered by his wealthy apartheid childhood… He has a racism problem.
Musk’s firms are infected with a racism problem
In 2023, 240 Tesla workers sued the company for rampant racial discrimination. Isn’t that crazy? Have you ever heard of anything like that before? Employees say that racial slurs are commonplace – even with swastikas graffitied on the walls, references to slavery frequently made while Black employees were forced to do the physical work. Ummm… WTF??
When one concerned employee, Marcus Vaughn, expressed his concerns to human resources and Elon Musk himself in 2017, he was fired. Musk has responded to the Black workers by telling them to have a “thicker skin”. Nasty bastard, right? Coming from a rich boy who screams on Twitter any time he feels like the victim.
As investors, we know that all is not well inside the company walls. The Musk bubble isn’t just facing outside pressure but it could also be about to implode. How much longer can these firms withstand the bad press, toxic cultures and expensive lawsuits. Could this explain why Tesla’s innovation has been lagging over the past years?
But it’s not just African Americans suffering at the workplace policies of Elon Musk. It’s employees, customers, and ultimately shareholders too. In the words of one publication, “The laundry list of lawsuits against Elon Musk and his companies continues to grow — ranging from sexual harassment complaints to massive job cuts, stock manipulation and bloated pay packages”.
The billionaire has a unique solution though. So maybe he is getting creative after all. He’s using DOGE to shut down the government agencies that have sued or blocked his businesses.
This list is so long, it deserves its own blog… WATCH THIS SPACE! 🔥
Entrepreneurs like BrewDog’s James Watt, for example, think that Musk’s DOGE template would be good for the UK government. Like Musk’s company, BrewDog has faced a toxic workplace culture scandal in recent years, with rampant reports of top-down bullying. So perhaps he is seeking to silence his critics too…?
Glossing over problems with lies on Twitter
Stephen Fry told a good joke the other day. “What’s the difference between Elon Musk and Adolf Hitler? … Hitler made good cars”. The craic is funny, but also insightful. Tesla cars used to be very innovative and cool. But since about 2015, stories of “whoompy wheels”, bad brakes, terrible customer service and secret fraudulent terms began to emerge. There is a pattern to how Musk deals with problems like this. He lies about it on Twitter.
Musk’s strategy of lying has occasionally landed him in hot water.. But only when it comes to misleading investors. He faces no real consequences when he lies to his other fans. In 2018, for example, Musk was prosecuted by the US SEC for “false and misleading” statements. He has also falsified Tesla’s accounts several times over landing him with yet more lawsuits, investigative journalist scandals and federal intervention.
How long can lies gloss over genuine business defects? MorningStar is one of the first to raise the alarm. In January this year, its analysts listed the Tesla stock as “significantly over-valued”.
Slowly, investors seem to be catching on. Following the highs of December, the price of a Tesla share has sunk – 28% (from $479.86 on the 17th December to $363 at the time of writing). And let’s be honest… The government contracts are a huge draw for the investors hanging in there, But what happens if Trump turns around one day and decides he doesn’t like Elon? Then what?
We all know Musk is going to piss Trump off. His little kid literally told the President to “shush your mouth” in front of the world’s press.
Musk idiotically undermines Trump at every stage on Twitter, for example, saying “they don’t actually have the money” at his Stargate AI initiative. The Musk bubble is stretching thin, and his abrasive personality in the Oval Office could be the thing that pops it.
And what then? The only division of Tesla that’s doing well is its battery business; but that only makes up 6.7% of the business which wouldn’t justify the company’s massive valuation. Without the government contracts, investors will drop Musk’s companies like hot potatoes.
Does Musk realise this too? And is that why he has gone into self-preservation overdrive with fascism?
Self-preservation through fascism?
We know Musk lies. But few people expected it to get so out of hand. Musk’s biggest and most brazen lies were probably during the 2024 election. In the words of Imran Ahmed, Head of the Center for Countering Digital Hate (CCDH), “Since Elon Musk took over X, the platform has devolved into a hellscape of hate and disinformation — much of which comes from Mr. Musk himself”.
Some highlights include… that time Musk lied that Democrats were importing immigrants to vote. When he posted an AI-generated image of Kamala Harris wearing a red soviet union uniform with the caption, “Kamala vows to be a communist dictator on day one. Can you believe she wears that outfit!?”. And how he fuelled the conspiracy of election fraud relentlessly. Musk has posted and promoted more bullshit than a slurry sprayer, as well as skewing X’s algorithm in favour of Trump (encouraging a herd-mentality bias).
Sadly, because of another bias – exposure bias – all of us will be a little more subconsciously inclined to think these lies are true now because we’ve been exposed to them. Musk’s misleading election claims were viewed 1.2 billion times and counting.
Now Musk has moved into a new toxic hobby. Funding far-right and neo-nazi groups in Europe. Great. His sick lies, election interference and siegheils have not gone down so well on the continent though. German Tesla sales nosedived by -67% in January, in a sentiment that’s rippling around the world. France is following suit. Disappointingly, sales in the UK were only down by 10% … But watch this space. Because Brits don’t like foreigners sticking their nose in and attacking prime ministers (even if it is Kier Starmer). This could be a slow burn.
So WHYYYYYY has Musk become a raging neo-nazi now? A prominent theory is that it’s the only way for him to keep his vast wealth in the fall of the capitalist system.
Economist Gary Stevenson advocates that Musk is supporting anti-immigration and anti-trans policies so that the people blame their lower living standards on minorities rather than taxing the super rich. It’s a really compelling theory and Stevenson is one of the most astute economists I’ve ever encountered. Others are arguing that it’s to break up Europe, so that the continent doesn’t unite away from the US, for example, by creating a new reserve currency. It’s a ploy to keep the USA in power, by weakening Europe.
… But for myself, I think his manic fascist tendencies have got more to do with Musk’s ketamine addiction.
Ketamine, baby, ketamine
This is a drug that messes with the connections in your brain. It links-up parts that wouldn’t normally be together.
Like… oh I don’t know … An apartheid white supremacy childhood and shutting down the federal DEI offices. Daddy issues and obsession with being the richest man in the world. Complicated feelings about being estranged from his trans daughter Vivian Wilson and fascism.
… You get what I mean?
Musk is somewhat open about having a prescription for ketamine to treat depression, which he says is “beneficial for investors”. His shareholders don’t seem to agree with his “illicit use of recreational drugs”, however, as a group filed a lawsuit against him in 2024.
The longer Musk takes ketamine… the more wild his tweets… the worse his toxic management style… the more fascist he gets … Coincidence? Or the sign of a drug addict who needs a good therapist?
If he wasn’t a billionaire… would you trust him?
Tell me this… if he wasn’t a billionaire, would you take him seriously? (Wealth bias). If his tweets were not so normalised, would we accept them? (Exposure bias). My dude. This man is a walking cry for help trapped in a billionaire’s body.
While we’re on the subject. To avoid paying tax, Musk doesn’t draw a salary from companies like Tesla, instead, he lives off credit cards and gets paid in stock. The awkward truth is that the moment Tesla stock sinks, so does Musk’s wealth. And at the moment, the stock market is moving away from him. The bubble is popping, but Musk’s extremely expensive lawsuits keep mounting.
… Will this guy really be a billionaire forever? Personally, I give it three years before he loses half his wealth. His current management style is fraught with risks and totally unsustainable. For investment managers, please start hedging our portfolios now?
One things for sure though, across the entire corporate political world… When the Musk bubble pops, it will leave one hell of a stink.
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