Time will tell what the next four years will mean for markets, but in the short term at least, it’s clear that at least one investor is benefiting mightily from the advent of the next Trump administration: Elon Musk
This week, Bloomberg News reported that Musk’s rocket and satellite maker SpaceX is in talks to issue new equity in a tender offer that values the company at US$350 billion — an increase from $255 billion U.S. earlier this year.
Greg Martin, managing director at Rainmaker Securities, says the close relationship between Elon Musk and Donald Trump is a factor in both the timing and the valuation of the funding round.
“Musk made a very big bet on Donald Trump,” said Martin in an interview with BNN Bloomberg. He says it’s noteworthy that shares in electric car maker Tesla have risen by almost 50 per cent since the election, despite being in an industry that isn’t poised to benefit under Trump policies.
“Tesla is branding itself as more than a car company, it’s clearly being valued very different than a car company, it’s being valued as a technology company,” Martin said. “Once Musk starts to build Tesla robots, other elements and leveraging AI, the sky could potentially become the limit for Tesla.”
‘Halo effect’ is boosting X value, too
Martin added that the public might feel that Trump’s win paints Elon Musk as “a winner in business is now a winner in politics,” which contributes to the “Halo effect” around him.
When Musk purchased of X (formerly known as Twitter) back in 2022, many considered the company “was left for dead” Martin said.
But the bromance between Elon Musk and U.S. president-elect Donald Trump has reignited interest for the social media platform, Martin says, adding his firm is now seeing demand for people to buy secondary shares in the private market for X.
Musk is benefiting from being in the incoming president’s good graces for now, but things can change, Martin said.
“If for some reason, things don’t go as well as they appear to be going now, will that impact Musk’s portfolio?” he wondered.
But ultimately, the value of Musk’s various companies will be able to weather any future volatility or shifting political winds because they are “strong, durable companies.”