Can Elon Musk Be Trusted with Over $1 Trillion in Businesses?

I’ve been telling my children that they always need to be aware of what their friends post to the internet - Elon Musk is finding out why.

Over the weekend, executives of some of Elon’s companies voiced their concerns about their CEO’s alleged drug use.

If you missed it, The Wall Street Journal reported that “Elon Musk Has Used Illegal Drugs, Worrying Leaders at Tesla and SpaceX”. Of course, Musk was quick to respond that “Not Even Trace Amounts” of drugs are in his system.

Of course, the internet never forgets, and this is just one of the lasting memories out there of Elon smoking something with Joe Rogan. Maybe it was a clove cigarette… that he rolled… that made him… forget it, you know where I’m going with this.

Look, we can look at this from a bunch of angles.

Around 40% of jobs in the U.S. require drug testing. Usually, it's for safety reasons. You know, you drive a truck, operate heavy machinery or… maybe you sleep and work on the floor of an automobile manufacturing company that uses killer robots?

Get the picture?

That said, I’m not worried about Elon letting loose on a weekend, as long as he does one thing: make me money as an investors. 

Let’s see how that’s going.

Since the stock peaked in November 2021, Tesla (TSLA) shares have lost 43% of their value.

TSLA is sitting just 3% above their 20-month moving average. A break below that trendline will put them back in a technical bear market.

If you’re a “trader” and more worried about the short-term performance, TSLA stock is getting ready to break below $225, which will put it below its 20-, 50- and 200-day moving averages. 

Its never good to be trading below the Holy Trinity of Technicals.

Fundamentally, General Motors (GM), Ford (F), and BYD (BYD) are starting to eat Tesla’s lunch in the market. The company just dropped prices again to maintain their market share. That’s not a good look.

Sure, SpaceX is moving forward, but we’re talking TSLA stock here because that’s all you can trade. Do you know what’s going to happen with SpaceX stock? The answer is “no,” trade what you know.

I haven’t even gotten into the fact that tax credits and other programs independent of Tesla’s operations have built that company, and those are disappearing. You know all that.

Bottom Line – Don’t Do Drugs

Elon Musk has been able to outrun public opinion because he was making obscene amounts of money for investors like you and me. Unless you bought shares of TSLA in January 2023, you’re wondering if you’re going to make money while those that have held the stock since before 2020 are probably getting ready to take their profits because their tiring of the sideshow. 

I’m short the shares and expect to see a target of $150.

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About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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