On Tuesday, in the unique setting of the Oval Office, Elon Musk, standing beside a seated President Donald Trump, voiced his concerns about inefficiencies within the federal government that his DOGE department was eager to eliminate. One particularly intriguing example Musk cited was a limestone mine where federal retirement paperwork is stored. “It’s like stepping into the 1950s,” Musk remarked, highlighting that the mine began operations in 1955 and likening it to a time machine. The pace at which retirements are processed, he explained, depended on the speed of the vintage elevator there. He queried, “Doesn’t that sound crazy?”
This limestone mine is operated by Iron Mountain, a name not widely recognized until Musk’s comments abruptly caused its shares to take a hit this week. In response, Iron Mountain’s CEO, Bill Meaney, saw opportunity rather than setback in the spotlight Musk inadvertently cast on them. He embraced Musk’s government efficiency drive as a chance for growth, particularly through their digital transformation endeavors with federal agencies.
Speaking to analysts during an earnings call on Thursday morning, Meaney expressed optimism about this potential. He noted that their digital services align well with the federal push for greater efficiency and hinted at renewed interest in Iron Mountain’s federal operations. Meaney revealed that the company generates $130 million in revenue from its data center and digitization efforts. This figure starkly contrasts with the $10 million earned from storing physical documents in sites like their Pennsylvanian mine, which represents a minuscule fraction of their total business.
Delving deeper into Musk’s critique, the Pennsylvania mine, situated just outside Pittsburgh and housing federal retirement paperwork over 200 feet underground, became the focal point. Promoting it as a bastion of security and disaster protection, the company underscores its value. Yet, the mine’s role in the federal efficiency narrative was highlighted by the DOGE department, drawing attention amid the political dialogue surrounding the government’s document storage infrastructures.
Musk’s remarks ignited speculation about the future of government contracts with Iron Mountain, and shares have dipped over 10% this week, exacerbated by a recent revenue miss reported during Thursday’s session. The DOGE department shared images of the mine on X, Musk’s social media platform. Accompanying text explained that more than 700 employees are involved in processing up to 10,000 retirement applications monthly, a setup Musk criticized as inefficient. “Instead of toiling in a mine shaft, carrying manila envelopes,” Musk suggested, “people could contribute more valuably to the nation’s economy.”
Further defending Iron Mountain’s federal collaborations, Meaney outlined their expansive partnerships with over 200 government agencies, either directly or through subcontracting services, and mentioned a state government contract involving hard drive destruction.
In contrast to market reactions, Wall Street experts consider the stock decline post-Musk’s commentary as excessive. Wells Fargo analyst Eric Luebchow deemed it “a big overreaction,” emphasizing that Iron Mountain’s diverse client base shields it from individual contract disruptions. If the government were to terminate the mine contract, penalty fees likely covering one to two years’ rent would compensate the company. Luebchow reinforced the idea that the focus on efficiency might benefit Iron Mountain’s wider business.
Similarly, Barclays analyst Brendan Lynch noted the government’s obligation to maintain records, which Iron Mountain securely stores. He described the situation as a “non-issue” and advised clients to “buy the weakness,” pointing out an overlooked opportunity.
