April 15, 2022
Howard A. Fischer was quoted in an April 15, 2022 Grid article discussing the possible implications that could put him in regulators’ crosshairs and pose significant regulatory risks to Tesla and SpaceX. Fischer said Musk’s focus on Twitter illustrates a fundamental transformation of the equities market from a model where people invest based on a business’s fundamentals and key performance metrics to a market where tribal identity rules. In that model, people buy shares in a company to indicate they’re part of the same group. Other recent examples include Reddit users organizing to buy stock in GameStop and AMC en masse.
“Rather than looking at fundamentals, people are looking at personalities,” said Fischer. “That could work for a while, but it presents some serious systemic stability issues — ultimately, historically, companies that aren’t based on fundamentals tend to suffer falls. You can’t keep this going forever. And who is hurt?”