{"id":21873,"date":"2024-06-11T07:30:09","date_gmt":"2024-06-11T11:30:09","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21873"},"modified":"2024-06-11T07:30:09","modified_gmt":"2024-06-11T11:30:09","slug":"the-problem-with-celebrity-ceos","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-problem-with-celebrity-ceos\/","title":{"rendered":"The Problem With Celebrity CEOs\u2026"},"content":{"rendered":"

Jensen Huang is a rock star.<\/p>\n

More than that… the CEO of Nvidia (NVDA) has achieved a cult-like following. And why not? Mr. Huang has sailed the NVDA ship to become the second-most valuable company in the world. He is the leading force in the artificial intelligence industry and has created vast amounts of wealth for his shareholders.<\/p>\n

So, it’s no surprise that women line up to ask Huang to autograph the front of their T-shirts.<\/p>\n

The problem for NVDA shareholders, though, is this sort of CEO notoriety often occurs near a peak in the share price.<\/p>\n

Let me explain…<\/p>\n

Peak Popularity = Peak Prices<\/h2>\n

Think back to 2020\/2021. Tesla (TSLA) was the best-performing stock in the market back then. It rallied from $25 per share (split adjusted) at the beginning of 2020 to $400 per share at the end of 2021.<\/p>\n

Elon Musk, Tesla’s CEO, was arguably the most popular person on the planet.<\/p>\n

A single tweet from him – “To the moon” – helped Gamestop (GME) rally from $20 per share to over $400.<\/p>\n

When he acquired a Shiba Inu puppy, the value of Dogecoin – a cryptocurrency that was started as a joke – rallied from $0.07 to over $0.70.<\/p>\n

And, his appearance on Saturday Night Live <\/em>gave the show its best ratings in years.<\/p>\n

Musk became a cult-like icon. Indeed, it would be hard to imagine anyone becoming more popular than Elon Musk was in late 2021.<\/p>\n

And that is when TSLA peaked.<\/p>\n

In 2022, TSLA shares fell from $400 at the start of the year to $110 by the end of the year. Much of the wealth that Musk’s popularity created was wiped out.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

And that should serve as a cautionary note to folks who own NVDA right now.<\/p>\n

NVDA has been the best-performing stock in the market over the past two years. That performance has granted Jensen Huang cult-icon status.<\/p>\n

It’s hard to imagine his popularity increasing even more from here. That might make it hard for NVDA shares to increase much from here as well.<\/p>\n

Granted, there are only a few examples of corporate CEOs achieving cult-icon status – Musk, Jobs, Gates, to name a few. So, we don’t want to draw too broad a conclusion based on a small sample size. But, in those few cases, the CEO’s peak popularity coincided with a peak in the company share price.<\/p>\n

NVDA shareholders should be careful right now. If Mr. Huang adopts a Shiba Inu, or if he takes a gig as guest host on Saturday Night Live<\/em>, it might prove to be a sell signal for the stock.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
Editor, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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