Musk is getting a market reality check. With Tesla’s shares nosediving by nearly 40% over the past few weeks, yet another SpaceX rocket explosion, and DOGE’s accidental leak of a CIA black site, structural cracks in Elon Musk’s empire have started to widen. The effective erasure of all of Musk’s post-election gains suggest that his foundations — built largely on investor enthusiasm, market sentiment, and a volatile online following — may be more fragile than previously assumed.

Unlike contemporaries who created sustainable business juggernauts, Musk’s wealth derives significantly from market perception and investor devotion, writes Dr. Mihir Desai, a professor at Harvard Business School and Harvard Law School, in The New York Times. While Tesla changed the game for electric vehicles, and SpaceX paved the way for commercial space exploration, Musk’s real talent has been selling flashy, impossible pipe dreams to investors, where “any setback is trivial and every accomplishment heroic.”

The proof is in his crown jewel: Musk acquired the ownership stake of Tesla from founders Martin Eberhard and Marc Tarpenning in 2004, and has acted as CEO since 2008. In 2009, Eberhard filed suit against Musk, who had erroneously started calling himself the founder of Tesla. But through the settlement, Musk bought himself — and two other executives not involved in the establishment of the company — the license of being called founders. In 2021, Musk changed his title at the company from CEO to Techno King.

Once a sign of Musk’s entrepreneurial prowess, Tesla is now showing serious signs of vulnerability. Sales are slipping, profits are down, and the company is slashing prices to stay competitive — a strategy that risks harming the brand in the long run — as traditional automakers like BMW and Mercedes foray into the industry and aggressive Chinese competitors impress the market. The plummeting Tesla stock has cost the oligarch USD 102 bn of his net worth just this year, reports Business Insider.

The cracks extend throughout Musk’s portfolio. X, formerly known as Twitter, was once hailed as the online town square. Since Musk’s USD 44 bn acquisition and chaotic takeover in 4Q 2022, users have fled to Bluesky and Threads, and Musk’s policy changes and personal politics has led to a hemorrhaging of advertisers. As a result, the platform has lost approximately 80% of its value in two years. Neuralink, his brain implant venture that has killed more than 1.5k animals, still lacks a clear path to profitability. The Boring Company, self-hyped as the future of urban transport, has produced minimal results despite significant investment. Remember SolarCity ? Exactly. Acquired by Tesla in a controversial move, the solar business company has largely faded from relevance. Even SpaceX raises questions about sustainable profitability outside government contracts and Starlink subscriptions.

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