The Elon Markets Hypothesis
Also SCALE SPAC, hedge fund results and Ant.
I wrote the other day that “the way finance works now is that things are valuable not based on their cash flows but on their proximity to Elon Musk,” and I am already tired of it. It was a joke? But in a couple of years there are going to be 800-page textbooks on Elon Musk Proximity Pricing; it will be a whole unit on Level 1 of the CFA. You might think that “did Elon Musk tweet about a thing” would be a simpler valuation metric than, like, “estimate its cash flows in perpetuity and apply an appropriate discount rate,” but I don’t know, there’s a lot going on.
First of all, yesterday I quoted a Reddit post from someone named “u/TSLAinsider,” dated Jan. 2, saying that he was a Tesla Inc. software developer and that Tesla had just bought $800 million worth of Bitcoin. I expressed some skepticism about this—“for all I know this was completely fake,” I wrote—but on the other hand Tesla did buy $1.5 billion worth of Bitcoin in January so, you know, good call. In the event it does seem to have been fake: