| The very public breakup of the White House best buddies created a lot of social media entertainment on Thursday. But there’s a serious side to the fight, as Max Chafkin writes today about the fallout for the businesses at the center of it all. Plus: A supercharged Florida health-care hustle, and a troubling story about a vulnerability at the SEC. Help us improve Bloomberg newsletters: Take a quick survey to share your thoughts on your signup experience and what you’d like to see in the future. If this email was forwarded to you, click here to sign up. Last week, the New York Times published a blockbuster story, citing anonymous sources and private messages, that presented a portrait of the world’s richest man in the throes of what could only be described as a world-class crackup. Musk, according to the Times, had been using ketamine with such regularity that he’d developed bladder issues, along with a behavioral pattern that worried his friends. The article suggested that Musk’s drug use might explain much of his erratic behavior—including his halting, chainsaw-wielding performance at a right-wing political conference, his Nazi-like gesture on Inauguration Day and his various child-custody disputes. Musk denied the allegations, accusing the Times of “lying their a-- off.” I bring this up because, as out of control as the behavior portrayed in the story was, it doesn’t seem as self-destructive as Musk’s public display on Thursday. Given the opportunity to exit the White House gracefully and on good terms with Donald Trump—complete with a made-for-TV sendoff that would’ve allowed him to signal to investors that he was no longer distracted by politics but maintaining his direct line to the president—Musk chose to blow the whole thing up. On X, his social media platform, he hurled unfounded accusations, made threats and generally behaved like the guy the Times article had described. Musk’s tantrum began during a televised Oval Office meeting between Trump and Germany’s new chancellor, Friedrich Merz, during which Trump said he was “very disappointed in Elon” for opposing the president’s tax bill. Musk started tweeting insults, which led Trump to threaten to “terminate Elon’s government subsidies and contracts.” By the end of the day, Musk had (a) threatened to start a new political party; (b) implied that Trump was a pedophile, because of his connections to Jeffrey Epstein, and that Trump had covered up Epstein’s crimes to protect himself; (c) called for Trump’s removal and replacement with Vice President JD Vance; and (d) threatened to cut off the US from the service it uses to move crew and cargo to and from the International Space Station.  Musk and Trump in happier times. Photographer: Andrew Harnik/Getty Images Amid all of this it was easy to forget that it was only on May 24 that Musk promised to “be super focused on his companies” and said he would be giving up politics entirely in favor of a “24/7” commitment to Tesla, SpaceX and xAI. His devotion to his work would be so extreme, he said, he would be sleeping on the floor at those companies. As I wrote in this newsletter last week, this promise was dubious given Musk’s track record, but investors seemed to buy it briefly. Not anymore. They reacted to Musk’s new feud by frantically selling Tesla’s stock. It closed down 14%, one of the worst single-day performances in its history. For comparison, when the Times dropped its report, the stock closed down roughly 3%. There’s alleged-ketamine-use recklessness, and then there’s pick-a-political-fight-to-the-death-with-Trump recklessness. Unfortunately, in last week’s newsletter, I also argued that readers shouldn’t bet on a Trump-Musk breakup. That looked smart for exactly one day (last Friday, when the president welcomed the CEO into the Oval Office and they promised to continue to work closely together). Reconciliation may still be possible, but it’s probably fair to say that, by simultaneously calling for Trump’s impeachment and threatening to sabotage America’s space program (“Go ahead make my day,” he taunted in an X post), Musk has made that possibility far-fetched for the moment. After making the threat about the space program, Musk backed down, conceding that it might be a good idea to cool off for a few days and try to repair the damage he caused. But then overnight he went back to tweeting, railing against Steve Bannon, the former Trump campaign chair and now a conservative influencer, as a “communist retard.” Tesla investors are an optimistic bunch, and the stock opened up this morning, rising more than 5% by noon in New York, perhaps on the expectation that Musk would make up with Trump. The problem is that Musk, by pouring money into Trump’s election and putting himself at the center of an unpopular (and so far unsuccessful) effort to cut government spending while humiliating civil servants, has painted himself into a political corner. Having alienated himself from Tesla’s original customer base, Trump and his fans may be all Musk has left. Of course, Tesla’s board has another option: jettison Musk, either temporarily or permanently. They’ve considered it previously, but given the sway Musk holds over the company—and the makeup of the board and shareholder base, which are largely composed of loyalists—it’s hard to imagine, even now. Still, the case for a leadership change (or at least a leave of absence) has never been stronger. LISTEN TO THE PODCAST: This week on Everybody’s Business, Max Chafkin and co-host Stacey Vanek Smith discuss the messy Musk-Trump breakup as well as Taylor Swift’s reclaiming of her music library and the enduring power of gold. Listen and subscribe to the podcast on Apple, Spotify, iHeart and the Bloomberg Terminal. |
