Trump is Musk's "Get Out of Jail Free" Card But Doesn't Save Tesla
Elon Musk endorses Trump after the former President was almost assassinated on Saturday; Tesla initially rose by nearly 7% on this news but is now flat
After the assassination attempt on former President Trump last Saturday, Elon Musk tweeted, “I fully endorse President Trump and hope for his rapid recovery”.
Tesla shares were up nearly 7% to $266 on this news in Monday’s premarket but closed at $253 (only +1.8%). The bump to Tesla’s stock price after Musk endorsed Trump is no surprise:
Musk is under multiple Department of Justice (DOJ) and Securities & Exchange Commission (SEC) investigations for fraud, related-party transactions among Musk’s companies (Tesla, SpaceX, Boring, Neuralink, xAI, etc), and embezzlement.
If the US regulators were to indict Musk for fraud (see the clip of the Wall Street Journal article below), Tesla would collapse as most of its enthusiastic shareholders don’t see Tesla growing unless Musk is leading the carmaker.
On Monday, the Wall Street Journal published an exclusive report saying that Musk had pledged to donate $45 million per month to Trump’s super PAC until Election Day (link to article here).
As a long-time Tesla watcher, here are my conclusions as to why Musk is betting the farm on Trump for POTUS in 2024:
Musk is under huge pressure from the DOJ, SEC, NHTSA, California DMV & others like the FTC due to marketing fraud and selling structurally flawed cars that have killed many people (44 fatalities, alone, just from Tesla’s Autopilot driver-assist system).
While there is little that a Trump-led White House can do to save Tesla from burning itself down due to its weak model lineup, Trump can (and will) pardon Musk.
Here are true signs that Tesla and Musk are under a wide-spanning US federal investigation:
In its 2022 Annual Report (10-K), Tesla revealed that it was under investigation by the DOJ for FSD and Autopilot (page 86) without giving any explanation as for why.
Nine months later in its Q3 2023 10-Q, Tesla revealed that it had “received requests for information, including subpoenas from the DOJ, regarding certain matters associated with personal benefits, related parties, vehicle range, and personnel decisions” (page 24). I’m not a legal expert, but I believe that the DOJ only issues subpoenas when they don’t receive the information or documents they initially asked for.
While speculation has it that Musk is protected by the Pentagon—due to its for Musk’s SpaceX to help run its spy satellites—Musk has committed so much fraud that even the California Attorney General’s Office is probing him and Tesla right now. While federal agencies like the DOJ, SEC and NHTSA may be swayed by the Pentagon, the California AG’s Office likely won’t be.
Hence Musk putting all of his weight and around $180 million of donations behind Donald Trump, who is now seen as the clear winner of the 2024 Presidential Election, after President Biden lost the first Presidential Debate 2 weeks ago.
These are two of the most damning articles about the fraud committed by Musk and Tesla:
Wall Street Journal on September 23, 2023 (link here):
Reuters on May 8, 2024 (link here):
Musk Getting Pardoned by Trump Doesn’t Help Tesla Much
While a Trump Presidency may lead to a “get-out-of-jail-free” card for Musk, it doesn’t stop Tesla’s mismanaged product strategy from burning the carmaker down over the next 2 years (see why Tesla could become insolvent in this report).
Trump may be able to temporarily deter recalls of Tesla cars due to structural problems that have continuously led to fatalities (sudden-unintended acceleration, axles falling apart while driving, Autopilot aiming for emergency roadside responders, etc).
However, there is little that Trump can do to stop the decline in sales of Tesla’s old Model 3 and Model Y from here on (both of which comprise 95% of Tesla’s global sales).
Tesla has had a 75% run over the past 3 months due to what I see as a coordinated effort among Musk and friends to juice Tesla’s stock via the options market. The higher Tesla’s share price, the less emboldened US regulators feel to indict Musk and Tesla as they don’t want to be responsible for bringing down one of America’s top-10 stocks.
So, if Donald Trump loses his bid for a second term as POTUS in November, Tesla could see its stock price collapse. And this is why I have a feeling that the Biden DOJ is doing all that they can to prosecute Musk and Tesla before Election Day. Whether they succeed in doing so is a separate matter.
Figure 1 shows how overvalued Tesla is versus its main carmaker rivals, while Figure 2 shows how much Tesla is overvalued versus its AI rivals.
Stable genuis rescues fraud genius
agreed on the dodging of indictment motives, but there's one more:
elon is looking at space X as his new baby. tesla is now his stepchild.
trump started space force (?!?) and elon sees that as an easy path to A) federally funded riches and B) mars