Elon Musk can’t stay out of the news. Today, it was revealed that the tech billionaire offered to buy Twitter for $41.4 billion, while earlier this week, the LA Times published a contentious piece about Tesla, punching yet another hole in Musk’s ‘tech genius’ narrative. “Twitter bots helped build the cult of Elon Musk and Tesla,” reads the headline, ‘but who’s creating them?”

The piece was referring to a recent study by University of Maryland School of Business professor David A. Kirsch. He concluded that social media bots “played a significant part” in securing Tesla’s status as a meme stock, which in the cheap money era guaranteed to propel the EV company’s valuation to loftier levels than anything “traditional financial analysis” could quantify.

Kirsch’s report went on to note that out of 1.4 million tweets quoting the hashtag #TSLA posted in the last decade, 23% were bot-generated. Each time one of 186 Tesla-related bot accounts’ was created, a 2% rise in Tesla’s stock price followed. Other bots served a similar purpose for tech stocks in general, with Apple and Amazon benefiting greatly. Still, bots for these two companies were not playing a boosterish role, unlike the Tesla bots, which enabled Musk to sell equity while his company haemorrhaged $5.7 billion.

Bot manipulation, in a broader sense, adds to the rising number of so-called stock market ‘distortions’, a euphemism for market fundamentals no longer representing the valuations of companies but a range of anomalous factors.

One of those relates to Tesla’s recent allocation into the S&P 500, the most influential stock market index worldwide, which highlights the increasing role of the ‘passive investing’ industry and how its ‘irrational’ flows have twisted stock prices. Irrational here refers to the flow of funds coming in from passive investing giants like Vanguard and Blackrock, who prefer to allocate capital to specific S&P 500 stocks based on their weightings in the index, not conventional fundamentals.

Meanwhile, a growing number of ordinary people have started to believe that markets reflect the price level at which central planners desire. Governments and central banks now play a more-than-desired role in the economy, jamming larger amounts of monetary stimulus into the financial system to paint over a lacklustre real economy.

This departure from the original definition of fundamentals has increased scepticism around traditional investing so much that alternative investments such as cryptocurrencies and gold — and the questionable narratives like U.S. dollar doom surrounding them — have gained significant traction. 

Those in total disbelief at sky-high stock prices have avoided traditional investments altogether. We’ve even seen thought leaders of financial rebellions like the crypto bros conclude that the entire stock market has become an elaborate Ponzi scheme. Though stock markets don’t match the definition of a Ponzi — which is a financial structure that produces a negative-sum outcome — the fact that even notable finance figures have reached such a conclusion exposes an extreme amount of distrust in the system. 

Alas, with the ever-increasing amount of shenanigans forming around Tesla, a company whose stock will likely gain increased market dominance, things are likely to get a whole lot worse.

Greg Barker is an independent journalist and quant, who also writes under the name Concoda. You can find him on Substack and Twitter at @concodanomics.