Elon Musk stood beside a seated President Donald Trump in the Oval Office on Tuesday and ranted about examples of government inefficiency his DOGE department was seeking to root out of the federal government.
“There’s a limestone mine where we store all the retirement paperwork…This mine looks like something out of the ’50s, because it was started in 1955, so it looks like it’s, like, a time warp,” said Musk, who went on to explain that the mine’s elevator speed determines the pace at which the government can process the retirements of federal employees.
“Doesn’t that sound crazy?,” he asked.
That mine is run by a little-known company named Iron Mountain, whose shares were hit this week in the wake of Musk’s comments.
But Iron Mountain CEO Bill Meaney on Thursday said that he sees the new government efficiency initiative led by Musk as a “growth opportunity,” given the company’s other work in digital transformation with federal agencies.
“We see this as a continued opportunity for the company,” Meaney told analysts during Iron Mountain’s Thursday morning earnings call. Earlier, he said this digitizing arm of the company aligns with the “drive to be more efficient” within the federal government and noted “recent interest” in Iron Mountain’s federal business dealings.
Meaney said Iron Mountain rakes in $130 million in revenue from its data center and digitization transformation businesses. That figure dwarfs the $10 million earned from the government storing physical documentation in sites like the namesake Iron Mountain mine. In all, Meaney said that $10 million accounts for less than half of one percentage point of Iron Mountain’s total physical volume.
‘Working in a mine shaft’
The Pennsylvania mine, which was the focus on Musk’s statements about the company, is where the federal government houses and processes retirement paperwork more than 200 feet underground. Located less than an hour outside of Pittsburgh, the mine is billed by the company as offering “unbeatable” levels of security and protection from disasters.
DOGE — the acronym for the Department of Government Efficiency — has been central to conversations and criticisms around President Trump’s return to the White House as Musk’s team scours federal agencies for fat to cut. Musk’s comments about the government’s contracts with Iron Mountain bring attention to a quirky setup for document storage used by the federal government, which has been under Republican scrutiny for a perceived lack of efficiency.
Additionally, these comments — and the company’s subsequent explanation of its work — can offer a roadmap for what firms that work with federal agencies can expect amid the Trump administration’s focus on slashing spending.
Musk’s critical analysis of Iron Mountain’s work with the federal government appeared to hurt the stock as concerns mounted that the contracts could be on the chopping block. Shares have dropped more than 10% so far this week, pulling the stock down more than 9% on the year. (A large chunk of those declines came in Thursday’s session as investors reacted to the company’s slight miss on revenue expectations from analysts.)
DOGE posted photos of the mine on X, the social media platform owned by Musk. Text accompanying the photos noted that more than 700 employees work in the mine, and Musk said that at most 10,000 retirement applications can be processed each month through this system.
“Instead of working in a mine shaft and carrying manila envelopes to boxes in a mine shaft, you could do practically anything else, and you would add to the goods and services of the United States in a more useful way,” Musk said.
In describing Iron Mountain’s work with government entities, Meaney told analysts the company partners with more than 200 federal government agencies as either a direct provider or subcontractor of services. Additionally, he also pointed to an agreement with a state government for a hard drive destruction program that can be used within its agencies.
‘A big overreaction’
Wall Street, for its part, sees the stock’s decline following Musk’s comments and the DOGE post as unreasonable.
“We view it as a big overreaction,” Wells Fargo analyst Eric Luebchow wrote to clients on Wednesday.
Luebchow said the company’s revenue is not driven by any single customer, meaning that it likely wouldn’t take a hit even if the federal government ended its deal with the mine. If the government does pull out, Luebchow said it would likely have to pay Iron Mountain termination fees that can amount to around one or two years of annual rent.
The analyst also backed up Meaney’s claim that a focus on efficiency may actually be a boon for other parts of Iron Mountain’s business.
Barclays’ Brendan Lynch agreed, adding that the government has a legal requirement to keep records that Iron Mountain stores somewhere.
“We see this as a non-issue,” Lynch told clients on Wednesday, before recommending they “buy the weakness.”