Musk criticizes financial markets

Elon Musk has criticized the US financial markets with harsh words. Speaking to Cathie Wood, Founder of ARK Investment Management, on Thursday, Elon Musk complained about the regulations that public companies face, while arguing that pressure from shareholders reduces efficiency and that passive index investing increases volatility. Musk, the CEO of high-market companies such as Tesla and SpaceX, said, “There is intense pressure for public companies not to have a bad quarter. This can result in less efficient operations. The time horizon between investors and the long-term vision of the companies is not matched.” Musk, who stated that passive investments that track indexes such as ETFs have reached very large scales, said, “At the end of the day, someone is making an active investment decision. Passive investors act according to the decisions of active investors. As a result, huge stock movements occur according to the decisions of four or five active investors.” Musk admitted that Tesla has easier access to capital by being publicly traded, while he stated that SpaceX can take higher risks because it is closed to the public.