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Being named Time’s “Person of the Year” can be a dubious honor.
The 2021 honorific went to divisive Tesla
TSLA,
CEO and SpaceX founder Elon Musk, with Time’s editor in chief Edward Felsenthal writing on Monday that “few individuals have had more influence than Musk on life on Earth, and potentially life off Earth too. In 2021, Musk emerged not just as the world’s richest person but also as perhaps the richest example of a massive shift in our society.”
The ensuing profile highlights Musk’s momentous year, such as: SpaceX scoring a $2.9 billion NASA contract in April to fly U.S. astronauts to the moon for the first time since 1972; Musk hosting “Saturday Night Live” in May and revealing he’s on the autism spectrum; and Hertz
HTZ,
announcing in October that it plans to order 100,000 Tesla vehicles, which pushed Tesla Inc.’s valuation past $1 trillion at the time.
But plenty of readers were quick to ground the larger-than-life CEO and Twitter
TWTR,
personality as a man who’s said and done questionable things, such as the ProPublica report released in June that found billionaires including Musk and Amazon
AMZN,
founder/space race rival Jeff Bezos have avoided paying federal income tax in some years. Or when Musk defied local health regulations to reopen a California Tesla plant early in the pandemic; more than 400 COVID-19 cases among workers in the factory were reported in the months afterward.
Granted, plenty of people, including Musk’s little brother Tosco Musk, applauded the award.
So being named Time’s Person of the Year is certainly a win in the public relations department, as Musk and his companies Tesla and SpaceX dominated Google and Twitter trends on Monday morning and early afternoon.
But what could this mean in the long run? After all, landing some coveted magazine cover awards has often been considered a curse. The “Sports Illustrated cover jinx” and the People magazine “Sexiest Man Alive curse” are two popular urban legends that claim the teams, athletes or stars who grace these No. 1 spots end up jinxing their careers.
And some past “Person of the Year” winners have fallen on hard times after their Time covers. For example, Bezos was named the “Person of the Year” in 1999 as e-commerce was just beginning to take off — but the dot-com bubble burst just months later in March 2000, and Amazon stock plummeted 90% by the end of the year. (Granted, many tech companies were crushed that year as the Nasdaq lost almost half of its value, and Amazon has certainly recovered since then.)
Former New York City Mayor Rudy Giuliani graced the 2001 cover for his leadership after the Sept. 11, 2001 terrorist attacks, but his political career has taken a turn since, and he was recently suspended from practicing law in both New York and Washington, D.C.
Former President Donald Trump was named “Person of the Year” after he was elected in 2016, but he was impeached twice and voted out of office after his first term. He has been permanently suspended from Twitter for spreading misinformation, and the former president continues to face questions about his handling of the COVID-19 pandemic and the Jan. 6 attack on the Capitol.
It’s not all bad news, however. Time awarded Facebook
FB,
CEO Mark Zuckerberg the title in 2010; the social media company wasn’t public yet, but in the following year, the company reached 1 trillion page views and became the second most-visited website in the U.S. behind Alphabet’s
GOOGL,
Google.
Former President Barack Obama was named “Person of the Year” in 2008 and 2012, and while his legacy will also continue to be debated, he’s largely avoided controversy — and enjoyed Netflix and Spotify contracts, and published a best-selling memoir — since leaving office.
It should be noted, of course, that high-profile individuals like world leaders, innovative thinkers, business titans and celebrities can lead somewhat volatile lifestyles that swing between extreme highs and lows, and that’s due to many factors beyond simply being profiled by a magazine.
And it’s hard to gauge what these kinds of awards do for company performance. For one thing, Time hasn’t given “Person of the Year” (previously “Man of the Year”) to many business leaders — most times, the title is given to world leaders and politicians. Musk, Bezos and Zuckerberg are exceptions, along with Chrysler founder Walter Chrysler in 1928 and General Motors
GM,
president Harlow Curtice in 1955.
“A 2007 research paper found something interesting: the companies with positive magazine profiles saw their stock prices dip, while those with the negative coverage often started to recover.”
But a 2007 paper from the University of Richmond in Virginia looked into how cover stories affected company shares, and it found something interesting. Researchers looked at 549 covers over 20 years from Forbes, Business Week and Fortune, and divided the coverage into positive, negative and neutral, before comparing how each cover company’s shares performed in the 500 days before and after the magazine profile.
They found that companies whose stocks had been doing well before the coverage were often featured in positive magazine cover stories, while companies whose stocks had been down were more likely to get negative coverage. No big surprise there.
But after those stories hit newsstands, there was often a reversal of fortune: the companies with the positive profiles saw their stock prices dip, while those with the negative coverage often started to recover. The findings were published in the Economist, which noted, “positive stories generally indicate the end of superior performance and negative news generally indicates the end of poor performance.”
And one of the researchers suggested this is because these magazine covers often come at peak positive or negative performance, which means the company is due for a correction. “What you can extrapolate [from the research] is that the extraordinary performance is capped by the magazine cover,” one researcher told the Economist. “You’ve hit your apex. So instead of staying superior, they just became average afterwards.”
What goes up must come down. And once you hit bottom, there’s nowhere to go but up again.
So is this Time award an apex for Musk and his companies? Or can they still fly higher? That remains to be seen.
As for the Twitter debate over whether he’s the “right” choice for the year’s most influential person, Time itself notes that its choices are often controversial — such as when it selected Adolf Hitler in 1938, or Joseph Stalin in 1939 and 1942.
