Elon Musk ‘Loves’ Donald Trump

Today, The Juice decided to organize our Trackstar top five a bit differently. 

Why? Because we own Trackstar. So we can. Plus, it’s interesting. 

As you probably know (if not, here’s an explainer), Trackstar is our proprietary sentiment indicator that collects and crunches investor search data across the platforms of our 100+ financial media partners. 

It’s difficult to classify Trump Media & Technology Group (DJT), so we simply looked it up, found that it’s the 21st most-searched stock in our database and started our ranking there. At the top of the page, you can see the tickers that follow DJT in popularity. 

As for performance, it has been a wild ride. 

If you’re curious to know more, check out our sister newsletter, The Spill’s, April 2024 analysis, where it called DJT the WORST stock pick of 2024:

This has nothing to do with politics and everything to do with the fundamentals of investing.

Normally, we wouldn’t bother covering a stock like this.

Yet, EVERYONE, from financial pros to retail investors, keep watching this stock, many trying to catch a piece of the price action.

While you might get lucky and land a winning trade here or there, investors should steer clear of this stock.

And here’s why… 

To find out “why,” read that edition of The Spill after you read today’s installment of The Juice. For the record, that Spill came out when DJT traded for close to $49. Today, it’s around $31.50, good for a 35.7% loss. The thing is so volatile that these numbers might be slightly (or more) outdated by the time you read this. 

Speaking of volatile, Donald Trump and Elon Musk! 

The other day, The Juice came across a newsletter about venture capital in Europe called Sifted. It looked into why “some of Silicon Valley’s biggest hitters have expressed their support for Donald Trump in the upcoming US presidential election.” 

Of course, this support includes Elon Musk’s $45 million-a-month pledge to Trump’s campaign. As Sifted noted, it’s not just Musk. Trump’s tech, VC and otherwise ultra-wealthy backers also include Marc Andreessen and Ben Horowitz, Sequoia’s Doug Leone, crypto billionaires Cameron and Tyler Winklevoss and Palantir Technologies (PLTR) co-founder Joe Lonsdale. 

Getting the European VC community’s explanation and perspective on this is interesting. 

First, here’s why, as VCs, they say they don’t like Trump:

“This election is not about taxes and policies. It’s about good and evil – democracy versus autocracy,” Sass (an angel investor from Estonia) told Sifted. “It’s about the most core values of the world. Any Silicon Valley investor helping Trump and Vance getting elected is supporting Russian genocide in Ukraine.” 

Danijel Višević, a general partner at World Fund, a Berlin-based climate tech VC, says that, while he understands that VCs care about quick wins and quick returns, the basis of their business is “social freedom, a free market economy, a reliable justice system and democracy.”

“If Trump becomes president, he will attack these four pillars, which will also massively harm the VC business. That’s why I think the decision by venture capitalists to support this notorious liar and hate-monger is not only opportunistic but unfortunately also stupid.”

Second, the European take on why large swaths of Silicon Valley support Trump:

But Silicon Valley VCs backing Trump argue that he will be a better president for the startups. They stress that Joe Biden’s programme stifles innovation through overregulation in fields like AI and burdensome taxes, such as the plan to introduce the unrealised capital gains tax (the tax on valuation increases). 

Trump, they say, has a much more laissez-faire approach and wants to support startups operating in AI and crypto. But while many in Europe appreciate that Trump might be better for domestic business, some fear that his “America First” approach to global cooperation could be bad for international economic collaboration.

Now it’s not Biden, but Kamala Harris, who has closed the gap with Trump. 

Some thoughts on some of the issues. 

The proposed tax on unrealized capital gains. At a glance, it sounds horrible. 

Middle class Sally Sue of Cleveland, Ohio has owned 100 shares of Tesla for the last ten years and now, suddenly, she has to pay tax on these unrealized capital gains? 

Not so. Here’s some color from a recent CNBC article about the Supreme Court’s decision to not rule (yet) on the issue:

In concurring and dissenting opinions, four justices — Amy Coney Barrett, Samuel Alito, Clarence Thomas and Neil Gorsuch — said the 16th Amendment requires realization for taxes. One more justice could create a majority in future cases.

That could be a roadblock for Biden’s billionaire tax, which calls for a 25% tax on unrealized gains for households with wealth exceeding $100 million, experts say.

Politics aside, maybe this multi-millionaire and billionaire support for Trump in America has less to do with Trump being a “better president for startups” and business in general and more to do with their personal wealth and fortunes. 

Regulation of AI. The Juice has to think most Americans support it. Even the folks who invented artificial intelligence and helped bring it to the forefront have concerns. And the reality is that as AI has emerged more Americans report being “concerned” about it and favor regulation. Along similar lines, a majority of Americans do not support putting chips into the brains of humans or human cloning. 

Here again. Rich people looking out for their own interests. Do you really think Silicon Valley VCs want to see the AI companies they’re backing get hit with regulatory and other obstacles? 

Just a couple of things to chew on as you ponder how people — including rich people — feel about Trump. 

As the election draws near, expect more coverage on the intersection of politics and money, including your money and how the next president’s policies might affect it. 

The Bottom Line: People like Elon Musk have large and often loyal followings. In some cases, people look to Musk for inspiration and with admiration. They see what he and others like him have accomplished. In some cases, they have changed or are changing the world and the way we live. No doubt, Musk and the upper echelon of the Silicon Valley crowd have amassed fortunes. 

Fortunes they want to protect. 

So, when you see this support from these people, realize it’s not populist support. It’s not even about business. It’s about power. And It’s personal. It’s about their personal finance that, even with tight regulation and new taxes, is far more secure than that of the average and even relatively well-off American.

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