Earlier this week, Elon Musk won Time Magazine’s Person of the Year award and I guess the Elon Markets Hypothesis is now canonically true:
This is the man who aspires to save our planet and get us a new one to inhabit: clown, genius, edgelord, visionary, industrialist, showman, cad; a madcap hybrid of Thomas Edison, P.T. Barnum, Andrew Carnegie and Watchmen’s Doctor Manhattan, the brooding, blue-skinned man-god who invents electric cars and moves to Mars. His startup rocket company, SpaceX, has leapfrogged Boeing and others to own America’s spacefaring future. His car company, Tesla, controls two-thirds of the multibillion-dollar electric-vehicle market it pioneered and is valued at a cool $1 trillion. That has made Musk, with a net worth of more than $250 billion, the richest private citizen in history, at least on paper. He’s a player in robots and solar, cryptocurrency and climate, brain-computer implants to stave off the menace of artificial intelligence and underground tunnels to move people and freight at super speeds. He dominates Wall Street: “The way finance works now is that things are valuable not based on their cash flows but on their proximity to Elon Musk,” Bloomberg columnist Matt Levine wrote in February, after Musk’s “Gamestonk!!” tweet vaulted the meme-stock craze into the stratosphere.
We’re gonna get this in textbooks soon I promise. People are already working on scientific measurements of Elon proximity that you can use to build quantitative trading models. It is going to be a whole academic field. Musk celebrated by tweeting earlier:
Did the price of Dogecoin go up? The price of Dogecoin went up. We have talked a lot about Musk’s ability, and desire, to move Dogecoin prices by tweeting about it, and I won’t go over that again, but it’s as good a way as any to commemorate being Person of the Year? “Tesla will make a non-fungible token of Elon Musk’s ‘Time’ cover and sell it exclusively at AMC concession stands for Dogecoin” would be the most 2021 possible financial story and there’s still like two weeks left in the year, it could happen.
Speaking of AMC Entertainment Holdings Inc., Insider has a profile of AMC Chief Executive Officer Adam Aron:
Instead of answering to stuffy bean counters who wear suits and Patagonia vests, the company now answers to brash, Extremely Online traders who either love AMC and the movie industry, want to destroy the short-selling hedge funds that they believe are conspiring to put the company out of business, or some combination thereof.
“We’re one of the few companies on the New York Stock Exchange where individual retail investors are clearly in control of the company. They own the company,” CEO Adam Aron told Insider in a recent interview.
That means AMC has “been navigating through uncharted waters,” as Aron put it, requiring a novel approach to investor communications. …
Meanwhile, AMC has built a $1.6 billion war chest, capitalizing on the surging demand to sell more than $1 billion in stock. That will help in paying down debt and also pursuing new initiatives.
“We’re going to make sure we use that war chest as the precious thing that it is,” Aron said, adding that it should last the company for “years and years.”
It starts with an anecdote about Aron blowing off meetings with Wall Street analysts because they are no longer relevant to AMC. I think Aron would probably be my pick for Financial Person of the Year? Musk is world-historically good at maximizing shareholder value and raising capital at favorable prices through the power of being weird on the internet, but I suspect that is mostly a side effect of him being genuinely weird and, in ways both good and annoying, a visionary about actual things (electric cars, rockets, etc.). Aron is some guy who runs a public company. He has two Harvard degrees, worked for Apollo for a while, and has had a long career as a professional executive at various companies. Then his current company became a meme, and he made a very straightforward rational business decision to embrace his meme status and talk about apes and NFTs and Dogecoin. Musk, I think, is mostly just like this, and being like this happens to be good for shareholders in 2021. Aron is only like this because it is good for shareholders, and he wants to do a good job.
It does feel very 2021 though, and 2021 is almost over. From Bloomberg News this morning:
Losses for a basket of so-called meme stocks are mounting, with traders shifting away from riskier assets in the final weeks of the year.
The group of 37 retail trading favorites tracked by Bloomberg extended losses to 5.5% on Monday, as selling pressure for markets around the globe accelerated. The index has shed almost a quarter of its value over the past three weeks as it slides to the lowest level in seven months. … GameStop Corp. and AMC Entertainment Holdings Inc., the two best-known meme stocks, have been the biggest drags on the group since mid-November. Each is down close to 45% in the past three weeks.
What if we start January and everyone is like “never mind, memes are over, it’s cash flows again.” Musk will tweet “we’re gonna do another Dogecoin thing” and Dogecoin’s (and Tesla’s) price won’t budge. The whole thing was a weird dream.