On Friday, Elon Musk announced the formation of a new political party, the America Party, with himself as primary funder and ideological core − and chief marketer, obviously. He has a direct line to 100 million Americans and is likely to exploit that bullhorn aggressively to his new party’s benefit.
One of the very early reactions to this announcement was interesting, perhaps a harbinger of the future of Musk’s companies and one of the many likely unintended consequences of Musk’s political adventurism.
A company named Azoria Partners was on the point of launching a Tesla-themed exchange-traded fund (ETF) on the US markets. This ETF’s mission was to invest in Tesla stock and options on behalf of punters who believed in the future of the company − low fees and low friction for people who did not have the time or energy to follow the finer subtleties of Tesla’s empire.
Immediately after Musk’s announcement of the America Party, the CEO of Azoria paused the ETF, saying: “I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO.”
The message is clear. Azoria needs Musk to be looking after their assets full-time, not treating it as some historical side-venture as he heads out to change American politics. It is unlikely that they will get the answer from the board that they are looking for. I suspect that the ETF will be withdrawn.
This is only the beginning of a larger story, though. Elon made it clear that whilst he does not have any delusions of the new party winning the presidency, his objective will be to win 2–3 Senate seats and 8–10 House districts, specifically against GOP congressional appointees who voted for Trump’s ‘Big, Beautiful Bill’. He had threatened retribution before. On Monday last week he tweeted this:
“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame! And they will lose their primary next year if it is the last thing I do on this Earth.”
Power to sway legislation
It seems like he has now taken the requisite action, and should he be successful, he (or at least his political creation) will hold the power to sway legislation in a tightly partisan congress.
What is of interest here is not the fact that some influential and wealthy person is trying to start a third political party. It is not unknown in US history, but there has been little sustainable success for these efforts. George Wallace’s segregationist American Independent Party got over 13% of the popular vote in 1968, and some electoral college influence, but shrivelled soon after. More recently, the Green Party managed to get 2.7% in the 2000 elections, but no seats in Congress, and declining influence since.
What is more interesting this time is that the modest goals he has set for the party are intended only to make him kingmaker − the custodian of key votes to essentially hold the GOP to ransom for moves that he considers abominable, like increased deficit spending.
Can he get there? Certainly. Not only is he still admired by a significant section of the US public, but he pays nothing for PR on his platform, which differentiates his effort from previous third-party aspirants who needed to find money for TV and radio and print ads. Whether he picks up the few seats he needs to anoint him kingmaker is, at least for this analyst, a mouth-watering prospect either way – “a cage fight at the Colosseum” in the words of podcaster Kara Swisher. Only much more important.
The Azoria matter points to an important issue that may not have been foreseen (or perhaps it was − you never know with Musk). The most important of these is that he has been clear as to where he will be spending his time and what is important to him now: punishing the GOP congresspeople who voted for the bill, and in doing so, punishing the president. Already having alienated the liberal side of the divide, he is about to alienate Trump’s armies, betting on some perhaps mythical ‘centre’ that will support him.
No longer aligned
Investors, at least large ones who trade big blocks of shares, do generally not live at the ‘centre’. They live anywhere where they can extract a return on investment. The share price of Tesla is about to fall off a cliff (again) as shareholders both flee the coming war between Musk and the GOP and realise that his interests are no longer aligned with theirs.
In another life, I have worked in the investment sector. When a capital provider is asked to invest in a company, one of their first questions is “who is the jockey?” − meaning, who is running the show? Musk has now announced what his primary activity will be, at least until the midterms in 2026. It will be politics.
As fine as his companies may be, and as skilled as Musk’s delegates may be, investors want Musk at the helm.
He is not going to be there. Capital will move elsewhere.
[Image: Supplied]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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