I just chuckle when I read these things.

Mar 15, 2025, 8:29 AM

https://www.businessinsider.com/tesla-stock-decline-jp-morgan-analyst-guidance-2025-3

I chuckle when people think Musk has $300 billion DOLLARS. Or I guess 150 now? A stock is merely a market value of AVAILABLE STOCK based on demand for the stock from buyers versus the availability to sell. This is why debt and the stock market are connected at the hip.

Take a company like Tesla/Microsoft/Apple/Amazon whatever. You have the founders who hold large chunks/percentages if the stock. Then you have the institutional investors, the Black Rocks/pension funds/whatever. Then you have some percentage left where the fluid and marketable stock mostly resides. When demand for a stock is high the largest stakeholders won't sell. They rarely sell at all. You may have 80% of the stock unavailable for sale. That leaves 20% available to satisfy demand. When you limit the available universe of stock for sale and demand is high the price goes WAY UP.

But the institutional holders and the founders rarely ever sell. What thy do is take advantage of the market they've elevated to issue debt. The insanity is the market price of a stock for a huge trillion dollar company is set by perhaps 10 to 20% of stock even being available for sale. But here's the rub.... That value based on demand for a limited supply is spread to ALL of the company's stock. The largest holders of the stock don't sell, they leverage that largely inflated stock value to issue debt. And the debt markets are dumb enough to accept quantified demand as an asset safe as collateral. Just as they were dumb enough to accept subprime mbs.

So with Tesla the demand for the cars has fallen. The stock available for sale has risen and the value has cratered. So Musk/BkackRick/etc have not lost billions of dollars. They've lost value in their debt collateral.

This is not unlike what DeBeers did for over a century with diamonds. They created a demand. Diamonds are forever. Woman love them. Show her you care. And soon demand skyrocketed for Diamonds. Meanwhile DeBeers controlled the supply making diamonds extremely valuable. They did this by stoking and creating demand while limiting supple. So then DeBeers is sitting on a mountain of wealth that would disappear if they ever sold all their supply. Same with Tesla. Create a demand. Save the environment. Self driving. Whatever else you can do to pump demand. Then sit on your stock and let only a fraction be purchasable. This creates a high stock value that extends to the stocks not available for sale. You take out a 30 billion loan based on that stock and guess what you do..... Buy the next stock.

This is the system. Quantified demand. Not quantified supply. And this is why Musk, and by extension Tesla, Blackrock, and ultimately America as a whole, is not as wealthy as we think we are.

When demand is quantified based on a limited or controlled supply, then the total wealth of the whole becomes detached from reality. This is why earnings are not as important as demand. This is also the same reason crypto has value. Release a coin. Hype it. Sit in a majority of the supply. Watch the value of the whole climb. Then pull the rug. Same principle. Don't even need a real tangible asset. Don't need profits and quarterly earnings. But it's the same principle. And it is ultimately a weakness