The Stock Market Has Not Changed in 400 Years 📈

We have digitized almost everything, yet the stock market has not really changed the way it operates.

In 1602, the Dutch East India Company (VOC) decided to pool money from many investors rather than just a few wealthy monarchs. They opened their books to the public and offered the first paper shares to people. 🚢

Basically, people would fund these expeditions; if a ship brought back something valuable, they would make money. Keep in mind, it was not guaranteed that a ship would return safely, and the types of goods it brought did not guarantee a profit. Essentially, you were betting money, very similar to what we do today.

Taking the Same Approach as Sports Bettors 🏀

We have created regulatory bodies, strictly control insider trading, and have 100-page annual reports, but at the end of the day, even institutional investors are still taking almost the same approach as sports bettors.

• You see one scientist move to another company, and suddenly that company’s stock starts to drop.
• By the way, Google did not show any kind of slowing down in their quarterly reports, yet the stock dropped just because someone changed jobs.
• It is like LeBron James going to Philadelphia next season; more people might bet on a Philadelphia championship.

The Elon Musk Factor and SpaceX 🚀

A similar situation exists with SpaceX, where most people are betting on Elon Musk rather than the company itself. Elon can pull off something that could make a company worth trillions. The day you take Elon out of the picture, no company with a negative balance on its annual report would be worth a trillion dollars.

Even more interesting is the fact that since SpaceX went public, there has been a trillion-dollar swing; suddenly, everyone made a bunch of money, and then more than a trillion dollars was erased. Trading volumes have also dropped, halving compared to the early days, so there is less demand.

The Reality Behind the Price Drop

Between the all-time high and today’s price, absolutely nothing negative happened.

• Elon is still alive.
• He is still trying to fly to Mars. 🔴
• Grok even dropped a new model: which is a pretty good model and competitively priced. 🤖
• They also bought Cursor, one of the most widely adopted AI coding terminals. 💻

It is not like Elon abandoned his promises; he still says the same things. Just like in sports betting, the odds have suddenly decreased; maybe investors are not as convinced of a trillion-dollar valuation.

By the way, the first lockup period ends on August 5th for insider shareholders. 📅 It will be interesting to see how much insiders believe in the current valuation or the company itself. If they truly believe that the total addressable market is 30 trillion USD, then the current stock price is quite discounted.

Market Price Moves on Random News 📰

Google dropped 9% last week simply because its latest AI models are not as good as its competitors’. By December, they will probably release one of the best AI models again, and you will see a bunch of bets coming in.

You can run multidimensional models inputting hundreds of thousands of datapoints, but at the end of the day, the price will move on random news.

🗞️ News Alert: Elon was seen ordering late-night takeout at SpaceX headquarters while working overtime.

💥 Boom: a 4% increase in the stock price.