By Allan Sloan
This is commentary by Allan Sloan, an independent business journalist and seven-time winner of the Loeb Award, business journalism's highest honor.
Elon Musk and Donald Trump, two of the biggest egotists in American public life, have been hanging out together for several months now. A major result of this late-breaking mix is that Musk, who spent $277 million backing Trump and other Republicans in the 2024 campaign, is getting even more attention than in his pre-Trump days and has gotten tons of publicity by opining endlessly about a variety of subjects.
If you've watched Trump's behavior for years, as I have, the fact that his bromance with Musk is still going strong is more than a little surprising.
Trump doesn't like people sharing the spotlight with him, which Musk -- the dominant shareholder of Tesla, X (formerly Twitter), and various other companies, including SpaceX -- has clearly been doing.
This raises an obvious question. When, if ever, is the president-elect going to get tired of Musk benefiting from his Trump-amplified public profile and cut him off?
Sure, Musk spent a ton of money to help Trump get elected. But he has made megatons of money on his Tesla holdings since Trump's victory was announced.
At the market close on Election Day, Tesla was up 1.2% for the year. But between Election Day and the end of 2024, Tesla shares took off for the moon (no SpaceX rocket required).
Tesla rose more than 60% from Election Day through year end, accounting for $109 billion of the $111 billion that Musk's Tesla shares increased in value for the year.
So why isn't Trump cutting Musk off at the knees?
Let me offer a somewhat heretical thought. I think that a major reason for Trump being so nice to Musk -- the richest person in the world, according to the billionaires lists of Bloomberg and Forbes -- is that Musk could be the way for Trump to monetize his stake in Trump Media & Technology Group, the company that owns Trump's favorite social-media platform, Truth Social.
By rational financial standards, Trump Media -- whose ticker symbol is DJT, Donald John Trump's initials -- seems hugely overpriced. And Trump hasn't been selling any of his shares, which would doubtless crash the stock.
DJT, which reported revenue of $2.6 million (no, that is not a typo), an operating loss of $140.7 million, and a total loss of $363.2 million for the first nine months of last year, the most recent available numbers, had a stock market value of $8.8 billion when last I looked. That is $8.1 billion more than its cash on hand.
Trump's stake, 114.75 million shares, was worth about $4.7 billion.
Trump put those shares in a revocable trust in his son Don Jr.'s name in December, but the president-elect still owns them indirectly.
If Musk, whose net worth is estimated at $427 billion in the most recent Forbes Billionaires List and $450 billion in the Bloomberg Billionaires Index, paid $60 a share for DJT -- about 50% above the recent market price -- it would cost him $12.9 billion. That is barely a rounding error in his wealth.
It would also allow Musk to have control of both X, a hugely popular social-media outlet; and Truth Social, Trump's favored outlet.
When I emailed X and Tesla to ask for comment about my Musk-Trump thesis, I got no response. Trump Media didn't respond to my emails, either.
When I emailed Trump's transition team, Steven Cheung, a Trump spokesman, gave me a far more interesting response than the poop emojis Musk's companies sometimes send reporters: "Stop taking mushrooms," he emailed me, "they interfere with the tin foil hat affixed to your head."
Cheung is scheduled to become communications director at the White House. If my somewhat heretical Musk-Trump thesis proves to be accurate, I'll be sending some mushrooms and a tin foil hat to 1600 Pennsylvania Ave.
Disclosure: I own one share of both Tesla and DJT to have guaranteed access to their shareholder reports. I'll donate to charity any profit that I realize on either stock.
Write to editors@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 17, 2025 02:00 ET (07:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.