Opinion | Musks Tweet-Fueled 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 shares has plunged about 40 percent, wiping out virtually all they had gained after the 2024 election.This reversal reveals Mr.

Musk’s soft underbelly: His fortune depends heavily on the inflated expectations of his rabid following.As those expectations deflate so will his power, demonstrating that financial markets are an underappreciated guardrail against both Mr.

Musk’s and President Trump’s agendas.It is tempting to compare Mr.Musk to the true business titans of the past quarter century such as Apple’s Steve Jobs, Microsoft’s Bill Gates, Amazon’s Jeff Bezos, Meta’s Mark Zuckerberg, Nvidia’s Jensen Huang, and Google’s Larry Page and Sergey Brin.

But those individuals created genuinely huge businesses that eclipse anything Mr.Musk has built by any possible metric.

While Mr.Musk has built a car company from the ground up — no easy feat — his wealth is largely thanks to a financial cult, one in which legions of dazzled investor-followers have enabled him to launch an ever-growing list of disparate initiatives and provided immunity from critics who question his operational decision-making, his corporate governance, his obscene pay packages, and now his migration into the political sphere.The high-wire act goes something like this: Dream up a business so ambitious that any setback is trivial and every accomplishment heroic.

Identify yourself as the manic genius behind this ambitious business in order to personally capitalize on outsize returns from excited investors.Enlist social media to cement your iconic status, keeping your believers so enthusiastic that their fervor beats back any skeptics who dare to bet against your ventures, even as you pitch more and more fantastical ideas.

At this point you hit the flywheel: Other investors, searching for outsize returns, flock to the shares of your other companies, pushing their valuations ever...