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How Elon Musk became the world’s most powerful influencer

Welcome to Buy/Sell/Hold, Marker’s weekly newsletter that’s 100% business intelligence and 0% investment advice. Each week, our writers Steve LeVine and Rob Walker make sense of the most important developments in business right now — and give them a Buy for clever moves or positive trends, a Sell for mistakes or missed opportunities, or a Hold if they’re noteworthy but too early to call.

😮‍💨 Why Elon Musk is a living, breathing subreddit 😮‍💨

The Buy/Sell/Hold Analysis

“Underestimating Elon is not a good idea,” Bill Gates said on Kara Swisher’s podcast the other day. But really, at this point, who is underestimating Elon Musk? The man is everywhere, influencing everything (or trying to). In addition to hyping his own companies, he’s chiming in on cryptocurrency and “Gamestonk,” interrogating the CEO of Robinhood (and putting Clubhouse on the map in the process), separately inviting both Kanye West and Vladimir Putin for another Clubhouse appearance, and even slamming the operator of Texas’ power grid. And that’s just the past couple of weeks.

It’s tempting to believe that we have reached peak Musk. But I’m not convinced: To the contrary, Musk’s status as the business world’s most ridiculous and yet somehow most effective influencer is only solidifying. If anything, he’s increasingly transcending the business world, having become a cross between a public figure, a pop culture stalwart, and a living, breathing subreddit.

That last bit is crucial: Musk has a better command of social media — and online culture in general — than any actual social media company CEO. Sometimes this is calculated (particularly when it comes to hyping Tesla), sometimes it seems like pure, uncut id (the shameful “pedo guy” attack on the caver who helped rescue those Thai children in 2018), and sometimes it feels like mere trolling.

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What it never feels like is an act. Online and off, Musk comes across as purely authentic — even when you can’t tell if he’s being serious and especially when he just seems flat-out reckless and weird. (Here’s the part where I mention him smoking weed on Joe Rogan’s show and that his son, with musician girlfriend Grimes, is named X Æ A-12 Musk.) At the same time, he’s not just some clown; whatever Tesla’s ultimate fate, it has helped change the entire conversation around the future of the automobile and against considerable odds. On a bad day for TSLA, Musk is still the second-richest person alive. Thus he seems to behave like someone who simultaneously has nothing to prove and nothing to lose.

To be clear, I’m not making an argument here about the value of Tesla or SpaceX or any other Musk-hyped enterprise. Those businesses are ultimately tethered to realities of profit and loss (and strike me as overvalued). But Musk as a freewheeling voice in the culture is tethered to no reality whatsoever. And perhaps particularly post-Donald Trump, there’s an audience for that. You could, of course, argue that Musk has jumped the shark with his series of outlandish stunts and off-hand remarks. But jumping the shark is what he does; he’s made an art of it. He’s looking back at us as he does so, again and again, and asking, “Don’t you wish you could do this, too?” And for better or worse, he’s not wrong.

Verdict: Buy

— Rob Walker

⚡Lightning Round⚡

It pays to be a Robinhood rival. On Wednesday, TechCrunch reported that stock trading app Public closed a $220 million investment round, valuing the firm at $1.2 billion — a 380% increase from its last valuation in December. Why the sudden surge in interest? Public is benefitting from serving as an alternative option to Robinhood, the now-infamous trading platform whose CEO Zoomed into an occasionally hostile congressional hearing Thursday to explain his company’s role in the GameStop saga. But as Rob Walker explained this week in Marker, despite Robinhood’s stumbles, the company was still the biggest winner of its own backlash, racking up a million downloads in one day during peak GameStop madness. Buy.

Second City is sold to… a private equity firm? Improv and sketch aren’t exactly known for being cash cows, so it’s no surprise that the legendary comedy theater and talent incubator was reeling from the pandemic’s blow to live entertainment. What is surprising is that after putting itself up for sale this fall, it wasn’t bought by one of its many celeb millionaire alums like Steve Carell, Tina Fey, or Bill Murray or even by a media conglomerate like Comedy Central’s owner ViacomCBS but by private equity firm ZMC. If Dunkin Donuts’ history being managed by PE is any indication, the iconic Chicago institution should get ready for an endless cycle of restructuring and resale. Sell.

Amazon nods at competition from Shopify. Amazon confirmed this week that it had completed an acquisition of Selz, a startup that provides e-commerce tools to companies selling products and services online. Selz is a direct (albeit much smaller) rival to Shopify, and its purchase by Amazon reflects the e-commerce giant’s acknowledgment that Shopify — with its recently expanded off-platform services and hypergrowth during the pandemic — is a serious and rare contender to make a dent in the Everything Store’s market dominance. Hold.

Walmart spreads a little wealth around, as a treat. The big-box store saw an eye-popping 69% jump in online sales last year, and it’s using some of its windfall to raise the average minimum wage of its 1.5 million hourly U.S. workers to around $15 an hour. That’s about $1 an hour higher than its workers’ average wages one year ago, according to the Wall Street Journal. As the world’s largest retailer and a pandemic winner, it can likely afford to push wages substantially higher if it wanted to — but at least it’s making moves faster than congressional leaders fighting over the same topic. Buy.

📈 The Number: 10,000%

That’s how much the spot price of electricity in Texas spiked on Monday relative to pre-storm prices, according to Reuters.

As extreme cold temperatures hit the state last weekend and Texans turned on their electric heaters to stay warm, the state’s power grid — unprepared for the sudden cold — suffered a “black swan” supply catastrophe. Pumping equipment, fuel lines, wells, wind turbines, and everything in between froze up at the same time that the need for electricity spiked, leading to widespread blackouts in the state. That sharp and abrupt imbalance in supply and demand is what sent wholesale prices skyrocketing to $9,009.40 per megawatt-hour early Monday morning, a nearly 3,500% increase from the previous Friday, according to Bloomberg. Prices remained hovering near that peak as of Thursday afternoon.

Texas Gov. Greg Abbott was quick to politicize the disaster, blaming wind and solar power for the state’s blackouts, but he later walked back those comments since a natural gas shortage was far more to blame (the state, which has a deregulated energy market, gets 40% of its energy from natural gas). The Texas grid operator actually credited solar energy with helping the state restore power in some areas on Wednesday. With the state issuing boil-water notices, deaths and hospitalizations from carbon monoxide poisoning mounting, and more than 500,000 homes and businesses still without power as of midday Thursday, the grim situation in Texas is showing us just how quickly a minor natural disaster can spiral into a major human-made tragedy.

— Kaushik Viswanath, Senior Editor, Marker

📖 Marker Read of the Week: Nick Huber has a storage business. He’s also leading a movement with a provocative message for entrepreneurs: Run like hell from Silicon Valley and all of its obsessions.

🔎 Marker’s New Fixation 🔎

With bigger fish to fry these days, you’d be forgiven for forgetting just how big a splash the Popeyes chicken sandwich made when it dropped in August 2019. As hype of its deliciousness transcended word-of-mouth and came to dominate mainstream media, many customers waited well over an hour in lines spanning several blocks — and in some cases actually came to blows — just for the chance to try it. Despite the logistical difficulties, this chicken sandwich craze was every fast-food chain’s dream come true. But how will Popeyes hope to live up to those expectations ever again? The answer: It won’t even try. Last Thursday, the chain introduced its new cajun flounder sandwich with an unusual policy: Customers who bought the sandwich on launch day could have paid an extra $0.15 for the opportunity to swap it out with a chicken sandwich in case they were unhappy with their purchase. This “culinary insurance,” as Forbes calls it, wasn’t just kitschy — it was one of the most counterintuitive marketing ploys I’ve seen since the Kendall Jenner Pepsi ad. Popeyes was simultaneously forcing customers to spend more to try its new product while also building in the expectation that they would not like it. Selling insurance on your sandwiches is about as unconfident a fast-food promotion you will find; why not offer the swap for free as a signal that it was sure customers would love the cajun catfish? It’s either because some poor actuary actually did the math to figure out the best way to offset costs or because Popeyes execs thought it would be hilarious to make customers pay for the awkward experience of trying to return a half-eaten fish sandwich through the drive-thru.

— Jean-Luc Bouchard, Senior Editor, Marker

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Bylines in Vox, VICE, The Paris Review, BuzzFeed, and more. Contributor to The Onion. Check out my work here: jeanlucbouchard.com.