Elon Musk's luck has finally run out

Elon Musk was on a heater.

From 2019 to 2022, it seemed as if every gamble that Musk took was paying off. Tesla was consistently profitable for the first time in its history and its stock soared as its massive new Shanghai plant ramped up production. SpaceX rockets captivated the public's attention — even when they blew up, everyone still clapped. Accusations of corruption and self-dealing slid right off Musk's back. Musk could do and say anything he wanted and success followed: He was even named Time's 2021 Person of the Year.

Then Musk did what every risk-addicted blackjack player inevitably does: pushed his luck too far. Overconfidence, confirmation bias, and delusions of control led to a string of bad decisions — and BOOM — Elon's empire is in trouble again.

The change of fortune was apparent at The New York Times Dealbook Conference last week. During an interview with host Andrew Ross Sorkin, the recognizable tells that Musk's hand had gone cold were everywhere. He raged at the very people who will dictate Twitter's fate, seemed baffled by key questions about the future of his companies, and offered non-apologies for his unhinged, antisocial behavior online. Sorkin suggested Musk's brain is like a storm, but it sounded more like two cats fighting to get out of a duffle bag.

This, ladies and gentlemen, is what it looks like when Musk realizes he's in a jam entirely of his own making. I know, because we've seen it before, including back in 2018, when he nearly flew Tesla into a mountain. He may find a way to ward off calamity, as he did then, but this jam is much tighter than the last one. Musk has to contend with over $13 billion of debt still weighing down a swiftly sinking Twitter, Tesla's profits shrinking because of a lack of demand and new products, and a world that is generally sick of his schtick. In Muskland, everything is connected by money — problems at one business bleed into the others. That's why Elon is being exceptionally obstinate. It's not just your imagination — his luck has changed.

2018, the first annus horribilis

If you want to understand Musk's latest unhinged behavior, it's helpful to understand the reasons he's lashed out in the past. So let me take you back to the wild ride that was 2018: Musk had bet Tesla's future on the Model 3. With an intended starting price of $30,000, the car was supposed to make EVs accessible to drivers who couldn't afford luxury prices. But Tesla's investors got increasingly restless as the model became trapped in what Musk called "production hell."

The pressure to get the Model 3 out clearly weighed on Musk, and he was not subtle about it. On Tesla's first-quarter earnings call, he cut off one analyst's basic financial question, saying that "boring, bonehead questions are not cool." He got so frustrated that he ditched the analysts entirely and started taking questions from fans posting on YouTube. Eventually, he even begged skeptical Tesla investors to "please, sell our stock." When Musk is at his most hungry for cash, he tends to bite the hand that feeds.

Musk also became more active on Twitter around this time, often with erratic results. When a professional diver complained that Musk was distracting from efforts to rescue a children's soccer team that had been trapped in a cave in Thailand, Musk called the diver a "pedo guy" and harassed him on Twitter. He used the platform to whine about the media, attack investors betting against Tesla's stock, and even tweeted that he would be taking Tesla private at the price of $420 a share when there was no such deal in place. Tesla was — as Musk later admitted — "near death," and summer's "production hell" was about to turn into autumn's "logistics hell."

Tesla's salvation came in the form of the Chinese Communist Party. In 2019, as executives were fleeing Tesla and the company continued to bleed cash, Musk struck a deal to build a factory in Shanghai. From permitting to construction to opening, the Shanghai Gigafactory was built in just 168 working days. Skeptical observers — myself included — were blindsided. What we failed to appreciate was the staggering power of the CCP when it's aggressively pushing to meet a single goal. When the party said Tesla could build the factory there, that meant immediately.

Without China, Tesla would not have finally turned into a "real car company," in Musk's own words. He dodged destruction and started to settle down and focus on other projects, like Starlink. Sure, he was still wilding out on Twitter, but at least he wasn't bawling to Rolling Stone about how badly he needs a girlfriend to be happy. At last, it seemed the Musk universe had found some kind of frenzied equilibrium.

Generally, there are two different lessons a person can take from surviving a brush with near ruin. They can learn to be more cautious, or they can decide that they are indestructible and tempt fate. I don't think I need to tell you which path Musk chose.

All of Elon world is connected

Say what you want about him, but Elon Musk has ambition. On top of the world in early 2022, Musk decided that he had the power to single-handedly "fix" the entire concept of free speech. And given that he is hopelessly addicted to the adulation he gets from Twitter, that's where he figured he would start.

We all know this part of the story. Musk started building a stake in Twitter in early 2022, then offered to buy it outright. He offered such a ridiculously high price that the board couldn't say no. A consortium of banks — led by Morgan Stanley — loaned him a large portion of the money. And finally, after trying and then failing to renege on the deal, he bought Twitter. Not long after completing the deal, Musk exhausted all the ideas to turn around the platform and was left with angry former employees, skeptical advertisers, a terrible new name, and a massive pile of debt owed to the Boy Scouts over on Wall Street.