Tesla's $120bn Surge: Fake News or Market Manipulation?

Tesla Stock Surges Following False Leaks Released Before Liberation Day Speech.

I deny believing that it was not a calculated risk for Elon Musk that his role as Head of DOGE - or RAGE as Curtis Yarvin has initially called it - would turn Tesla’s public listing into an obvious attack angle. While views on his character are rightfully so subject of debates, his track record and abilities are undeniable. He possesses the ability to raise capital like maybe nobody else in our time. When facing significant short seller opposition (traders that make money, when a stock price falls), his market actions are viewed by some as approaching the threshold of market manipulation, a criminal offense. It appears to be for Musk simply a gray area, in which a successful entrepreneur needs to be able to navigate confidently, to others it is proof that he believes certain rules would simply not apply to him. The historical interpretation of yesterday's events, marked by a 15% Tesla stock rally and a $120 billion market capitalization of Tesla increase following a devastating Q1 report, will be determined over time, particularly concerning the role of viral Fake News, that triggered the surge.

But one thing at a time:

Tesla’s market capitalization was at $910 billion at the end of trading yesterday. Up from $790 billion when the markets opened. As benchmark: The nine automotive companies joining Tesla in the Top 10 of the most valuable car manufacturers globally represent a valuation of $868 billion - combined.

Tesla’s stock price and valuation are hardly driven by fundamentals - meaning bound to revenue or profitability numbers - but rather by his personal following that resembles that of a crypto-bro cult. The reported global decrease in Tesla sales during the first quarter of this year has been triggered by global opposition to his political statements and his association with the Trump administration. Compared to the same time frame last year the numbers of cars sold decreased by 41.1% in France, 55.3% in Sweden, 12.5% in Norway, 55.3% in Denmark and 49.7% in the Netherlands - it looks comparable in markets all over the world. While EV sales are booming globally, Tesla’s market share decreased from 14% to 11% only avoiding an even harsher collapse with severe discounts at zero percent financing. Given the monthly reporting of new vehicle registrations and related data by numerous countries, a decrease in sales was anticipated, leading Wall Street analysts to revise their forecasts: From well over 400,000 delivered cars to 378,000 on average. Tesla's reported figure of 336,681 units was lower than the most conservative analyst projections though. Following the release, the stock price experienced a 10% decline in after-hours trading. Anticipating an additional post-market-open decrease, short sellers took positions that may drive Tesla's stock below critical support thresholds (price levels determined by chart analysis). It appeared to be obvious that the damage to Tesla’s brand had caused an even harsher decline of the company’s fundamentals, darkened its outlook and opening the door to a real crash.

Then followed the unexpected breaking news when Politico published an article stating:

President Donald Trump has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks from his current role as governing partner, ubiquitous cheerleader and Washington hatchet man.

The president remains pleased with Musk and his Department of Government Efficiency initiative but both men have decided in recent days that it will soon be time for Musk to return to his businesses and take on a supporting role, according to three Trump insiders who were granted anonymity to describe the evolving relationship.

The X algorithm, elevated this news to the platform's top story, resulting in its widespread dissemination before the markets opened. The stock experienced a significant surge throughout the day, not only recovering its pre-market losses but closing with a 5.3% gain. As described Tesla gained $120 billion in market capitalization due to that. While that triggered substantial losses for short sellers, Musk netted $15 billion.

Even though he tweeted numerous times throughout the day, he waited to clarify that the perfectly timed Politico article was false until the markets closed by simply retweeting the WH Press Secretary denouncing his departure from DOGE as garbage.

All that occurring just before Trump's Liberation Day speech, which will if not burry, certainly limit its coverage in major publications, makes that whole stunt smell fishy.

Politico, a subsidiary of the German media conglomerate Axel Springer, was acquired in 2023 as part of CEO Mathias Döpfner's strategic plan to expand Springer's US presence and influence. While Döpfner is actively extending his US network personally, he controversially provided Musk with a platform on Die Welt to advocate for Germany's far-right AfD during the election race. His son Moritz on the other hand became Chief of Staff at Peter Thiel’s Family Office Thiel Capital. (I have described Thiel’s role within the neoreactionary movement and the Trump administration at length in my essay S1E1: The Butterfly Revolution: A Silent Coup?)

Although there is no evidence of direct consultation between Musk, Thiel, and Döpfner regarding this PR stunt, the established connections surely did not hinder its release. It is most definitely also not to Musk’s disadvantage, that his DOGE is dismantling regulatory bodies, including the SEC, which fined him for a 2018 tweet containing false claims about securing funding to privatize Tesla at $420, resulting in a 23% stock increase.

The circumstances of this $120 billion surge are very questionable. It appears to be fair to say that an individual who envisions to crown himself as king of his own empire by establishing a sovereign Chapter City, as described in my essay S1E2, needs to have the vocation to operate outside of conventional regulatory norms. Especially if such individual possesses the ability to involve the Oval Office into a PR heist that appears to be for the history books.

No judge, no jury, no executioner.