Good evening, I'm William D. Cohan.

Welcome back to Dry Powder. Today, I'm opening my notebook and responding to industry questions about what's really happening on Wall Street, including, among other things, the import of Glenn Youngkin's private equity-fueled victory in Virginia; the irony of Elon Musk's move to unload Tesla stock; and what Succession gets right about the Sumner and Murdoch family dynastic drama. 

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The Agony of the Tesla Shorts, the P.E. Revolving Door, and Shari vs. Succession

Regarding the most pressing questions on Wall Street and in my inbox.

Each week, I receive feedback from readers and sources about Wall Street's biggest characters and concerns. I'll be engaging with some of those questions here—in addition to a few observations of my own.

Bill, you’re familiar with all the big private equity guys. What are they thinking after one of their own, former Carlyle Group co-C.E.O. Glenn Youngkin, won the governor’s mansion in Virginia? 

The truth is this is not anything particularly new. The Wall Street crowd has long been making the pilgrimage into government once they have made their loot. Right off the top of my head, I can think of Mitt Romney, a founder of Bain Capital who was governor of Massachusetts and then the 2012 Republican presidential nominee. Jon Corzine, the former senior partner at Goldman Sachs, was the governor of New Jersey and a U.S. Senator from New Jersey. His former Goldman partner, Phil Murphy, just squeaked by in his re-election bid as New Jersey governor. 

Illinois has had a thing for private-equity guys turned politicians, too. Bruce Rauner, the co-founder of Golder Thoma Rauner, was the Illinois governor from 2015 to 2019 and the current governor, Jay Pritzker, is a co-founder of the Pritzker Group, a family investment firm. Heck, we even had a president—Donald Trump—who, fair to say, ran his own private investment firm—whether well or poorly is open to debate. 

And Wall Street types have been filling cabinet positions, White House staff positions, and other government positions for decades. The surprising thing to me about Youngkin, who I had never heard of before he briefly became co-C.E.O. of Carlyle, was how much money he seems to have made from working there. According to Forbes, Youngkin has amassed a fortune of $470 million, some of which he used to finance his campaign for governor. Wowza. 

The Independent research firm New Constructs suggests that Tesla is overvalued by... $1 trillion. Would love your thoughts, Bill. 

This really isn’t up for debate anymore, is it? Tesla’s valuation is totally out of control. The company’s stock price is certainly overvalued. But whether it is overvalued by $1 trillion—meaning it should be valued at $200 billion, rather than $1.2 trillion—is a matter of nuance. 

There is no reason on the face of the earth that Tesla, which makes most of its money selling carbon credits, not cars, should be worth more than the entire automotive industry combined. Elon Musk could buy all of GE’s stock himself, and still have more than $200 billion left over. Does the word insanity mean anything to anybody anymore? Musk himself has acknowledged repeatedly that Tesla is almost certainly overvalued. (“What am I supposed to do?” he asked Kara Swisher in September. “I’m not the one making it go up.”) On Saturday, he tweeted a poll asking his Twitter followers whether he should sell 10 percent of his stock, ostensibly to pay more tax, but also, conveniently, after Tesla’s market valuation jumped more than 50 percent in the past month. I think Musk’s tweet is a way to give him cover to allow him to sell Tesla stock without causing the stock price to crater. After all, how would it look if he suddenly decided to sell 10 percent of Tesla unannounced...

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