WEBVTT - Emergency Episode: Elon's $55 Billion Pay Problem 0:00:00.200 --> 0:00:03.840 Welcome back to Elon Inc. We're in your feed twice 0:00:03.840 --> 0:00:06.600 this week because we had to do an emergency pod. 0:00:07.280 --> 0:00:11.639 I'm your host, David Papadopoulos. Last night, Delaware Chancery Court 0:00:11.720 --> 0:00:15.880 Judge Kathleen McCormick voided Elon's fifty five billion dollar compensation 0:00:16.079 --> 0:00:19.759 package in a strongly worded decision. The ruling could have 0:00:20.000 --> 0:00:23.480 enormous ramifications for Musk's entire business empire. 0:00:25.280 --> 0:00:28.200 Well, Elon Musk is now the richest person on the planet. 0:00:28.520 --> 0:00:31.360 More than half the satellites in space are owned and 0:00:31.480 --> 0:00:33.159 controlled by one. 0:00:33.000 --> 0:00:37.800 Man, starting his own artificial intelligence company. Well, he's a legitimate, 0:00:37.840 --> 0:00:40.280 super genius, legitimate, he says. 0:00:40.280 --> 0:00:42.880 He's always voted for Democrats, but this year it will 0:00:42.880 --> 0:00:43.320 be different. 0:00:43.360 --> 0:00:44.360 He'll vote Republican. 0:00:44.600 --> 0:00:47.080 There is a reason the US government is so reliant 0:00:47.120 --> 0:00:47.520 on him. 0:00:47.720 --> 0:00:50.720 Elon Musk is a scam artist and he's done nothing. 0:00:51.920 --> 0:00:54.680 Anything he does, he's fascinating the people. 0:01:04.000 --> 0:01:07.440 Note we are taping this at eleven am. We're joined 0:01:07.440 --> 0:01:10.319 by Jeff Feely, a legal reporter here at Bloomberg who 0:01:10.319 --> 0:01:14.680 covers the Delaware Chancery Court. Hello, Jeff, Morning, Dana Hall, 0:01:15.000 --> 0:01:20.920 our ace tesla reporter Dana Good morning. He and Max Chafkin, 0:01:21.080 --> 0:01:25.399 senior reporter at Business Week. Low Max, Hi, David back again, 0:01:25.760 --> 0:01:28.319 We'll dig into what the ruling said, what it means 0:01:28.319 --> 0:01:33.400 for Elon and for Tesla, and what Elon might do next. So, Jeff, 0:01:33.600 --> 0:01:36.960 we will start with you. Elon never loses in court 0:01:37.520 --> 0:01:42.440 until now. This is a very complicated matter. Briefly, the 0:01:42.600 --> 0:01:45.600 idiot's version for all of us. Please what happened? 0:01:46.160 --> 0:01:53.400 Okay, So judge zapped his two eighteen compensation package, which 0:01:53.720 --> 0:01:57.560 would have been the largest compensation award to a US 0:01:57.680 --> 0:02:02.559 executive in history. She found that conflicts of interest among 0:02:02.600 --> 0:02:08.160 the directors and problems with disclosures about the plan required 0:02:08.200 --> 0:02:09.040 her to sink. 0:02:08.840 --> 0:02:13.120 It sinc it, So the package is zapped. So, Dana, 0:02:13.200 --> 0:02:16.960 this is potentially a really big deal for Musk right, 0:02:17.000 --> 0:02:21.280 both personally, for Tesla and for the broader Musk empire. 0:02:21.680 --> 0:02:23.560 Oh yeah, for sure. I mean, Jeff and I have 0:02:23.639 --> 0:02:25.960 joked a lot over the years about how Elon is 0:02:26.000 --> 0:02:29.080 Teflon Elon, and he always wins in court because he 0:02:29.160 --> 0:02:31.880 hires the best attorneys, and he's not afraid to litigate, 0:02:31.880 --> 0:02:34.240 and he will go to the mat on every issue. 0:02:34.280 --> 0:02:37.600 But this was a huge rebuke. And the whole reason 0:02:37.639 --> 0:02:40.120 why Elon is the richest person on the planet is 0:02:40.160 --> 0:02:44.080 because of this twenty eighteen comp package, and now that 0:02:44.240 --> 0:02:47.839 is basically being tabled. The judge is saying, no, we're 0:02:47.880 --> 0:02:50.920 not going to allow this, So it's like retroactively, the 0:02:50.960 --> 0:02:52.840 Tesla board has to come up with a new way 0:02:52.880 --> 0:02:56.040 to compensate him. And Musk is furious. I don't know 0:02:56.040 --> 0:02:58.640 if you saw the tweets overnight, but now he's like 0:02:58.760 --> 0:03:04.760 threatening to move Tesla's incorporation status from Delaware to Texas. 0:03:05.040 --> 0:03:07.120 You know, he's he's pissed. I mean, this is a 0:03:07.200 --> 0:03:10.280 huge blow to his personal wealth, and it just kind 0:03:10.320 --> 0:03:13.320 of shows for you know, plainly for all just how 0:03:13.400 --> 0:03:16.160 rife all of the corporate governance issues of Tesla are. 0:03:16.560 --> 0:03:19.720 Huge blow for his personal wealth. Exactly how much would 0:03:19.760 --> 0:03:22.240 it come down if this ruling is upheld. 0:03:22.800 --> 0:03:24.359 Well, that's one of the things that we're still trying 0:03:24.360 --> 0:03:27.399 to figure out, because I don't believe that he exercised 0:03:27.440 --> 0:03:29.960 all of the options because of the five year rule. 0:03:29.840 --> 0:03:32.399 But that you never exercised any of them data. 0:03:32.360 --> 0:03:35.040 Right, But he was as of the end of the day, 0:03:35.360 --> 0:03:38.400 the business day yesterday, the richest person in the world over. 0:03:38.560 --> 0:03:41.160 According to the Bloomberg Index, two hundred billion dollars is 0:03:41.280 --> 0:03:45.800 net value. How much ballpark would that come down by I. 0:03:45.760 --> 0:03:48.000 Don't think we know, honestly, because the board is going 0:03:48.080 --> 0:03:51.000 to have to redo it. They're going to basically have 0:03:51.040 --> 0:03:53.240 to redo this plan. I mean, but it could be 0:03:53.280 --> 0:03:54.120 billions of dollars. 0:03:54.600 --> 0:03:57.360 Some of the estimates are as much as fifty billion. 0:03:57.560 --> 0:04:01.680 You know, huge, not just because us it speaks to 0:04:02.480 --> 0:04:04.560 a huge amount of money for the world's riches man, 0:04:04.840 --> 0:04:07.840 but also the way he's run Tesla, because the logic 0:04:07.960 --> 0:04:11.160 on this in this case was essentially that the board 0:04:11.240 --> 0:04:13.960 was not independent and that that was not properly disclosed 0:04:14.000 --> 0:04:14.760 to shareholders. 0:04:15.120 --> 0:04:15.320 You know. 0:04:15.440 --> 0:04:18.039 At the same time, Musk is asking for even more money, 0:04:18.080 --> 0:04:20.520 saying he doesn't feel like he can do his AI 0:04:20.640 --> 0:04:23.960 and you know, innovations unless he gets an even greater 0:04:24.080 --> 0:04:27.080 percentage of Tesla. And so I think this throws a 0:04:27.160 --> 0:04:30.800 lot of uncertainty into not just Tesla, but but, like 0:04:30.839 --> 0:04:33.520 you said, the whole empire, because you've had this kind 0:04:33.560 --> 0:04:36.479 of threat bubbling under the surface, like maybe I'll take 0:04:36.480 --> 0:04:39.360 my you know, maybe I'll do all my brilliant AI stuff, 0:04:39.480 --> 0:04:41.680 you know, inside of XAI, which oh, by the way, 0:04:42.400 --> 0:04:44.520 that you know it may or may not be raising 0:04:44.560 --> 0:04:46.919 additional money. You know, Elon Musk has denied it, others 0:04:46.920 --> 0:04:49.680 have reported it maybe in process. And I think we 0:04:49.760 --> 0:04:53.200 need to start looking at the possibility that Elon kind 0:04:53.200 --> 0:04:56.120 of ups the level of threat. Right he's already threatening 0:04:56.560 --> 0:04:58.960 to you know, to do AI elsewhere. What if he 0:04:59.040 --> 0:05:01.240 threatens to walk away entirely? I mean, it would be 0:05:01.320 --> 0:05:04.160 disastrous for Tesla, at least for Tesla's share price. 0:05:04.320 --> 0:05:06.120 Well, the share price as of this morning when I 0:05:06.200 --> 0:05:10.080 last checked it definitely down, not tanking, but down a bit. 0:05:10.120 --> 0:05:13.839 And it does seem to point to to certainly to 0:05:13.920 --> 0:05:17.560 some angst among the investor community that that's something like that, 0:05:17.720 --> 0:05:20.360 you know, could happen. Okay, Dan, So if we continue 0:05:20.360 --> 0:05:23.839 to go down this hypothetical path of Elon truly carrying 0:05:23.880 --> 0:05:27.080 out this threat that he's been making that hey, I 0:05:27.160 --> 0:05:29.600 might just pick up my toys and leave. If you 0:05:29.680 --> 0:05:31.800 were indeed to pull the trigger on that and do that, 0:05:32.120 --> 0:05:33.160 what's in it for him? 0:05:33.360 --> 0:05:33.560 Yeah? 0:05:33.560 --> 0:05:35.600 I mean that's why I think it's it's still kind 0:05:35.640 --> 0:05:38.240 of far fetched, because I think he's very frustrated running 0:05:38.240 --> 0:05:40.719 a publicly traded company. I think he would much rather 0:05:40.920 --> 0:05:42.920 just run private companies, right. 0:05:42.960 --> 0:05:45.919 And to be clear that Dana, sorry, he tweeted or 0:05:46.200 --> 0:05:49.640 xed a fair amount about that overnight. He basically doesn't 0:05:49.760 --> 0:05:53.320 like being, you know, tied to all these different rules 0:05:53.320 --> 0:05:55.880 that come with having a company that's publicly traded right. 0:05:56.440 --> 0:05:59.200 Right, like just having to like disclose earnings and the 0:05:59.240 --> 0:06:03.120 pressures from you know, ESG and DEI and having everything 0:06:03.160 --> 0:06:05.680 scrutinized in Delaware. I mean, when you are a publicly 0:06:05.720 --> 0:06:07.920 traded company, you are open to a lot more scrutiny, 0:06:07.920 --> 0:06:10.680 and so I think that he just is very frustrated 0:06:10.680 --> 0:06:12.760 by that. It is hard for me to see him 0:06:12.839 --> 0:06:15.320 walking completely. I mean, he has poured his heart and 0:06:15.360 --> 0:06:17.599 soul into this company. It's not the only company that 0:06:17.640 --> 0:06:19.520 he runs. But you know, he didn't sleep on the 0:06:19.560 --> 0:06:22.800 factory floor back during the Model three ramp for nothing, 0:06:23.000 --> 0:06:25.320 and it's been such a part of his personality and 0:06:25.360 --> 0:06:28.640 it's why he's so famous and he needs that money. 0:06:28.720 --> 0:06:30.800 I mean, that's the other thing, Like if he was 0:06:30.839 --> 0:06:33.320 to walk away, I think the valuation of Tessel would 0:06:33.320 --> 0:06:37.240 collapse because they are so dependent on him. So, you know, 0:06:37.480 --> 0:06:39.640 does he step back in some way and just become 0:06:39.760 --> 0:06:42.440 like product design and maybe they actually name a COO. 0:06:43.000 --> 0:06:45.680 I don't know, but it's like there, it's stuck, like 0:06:45.760 --> 0:06:48.320 the board has been kind of stuck in this position forever. 0:06:48.480 --> 0:06:51.320 Like there's key Man risk. The key man has now 0:06:51.360 --> 0:06:53.479 basically lost in court for the first time that I 0:06:53.480 --> 0:06:56.279 can think of, and you know what happens next. I 0:06:56.279 --> 0:06:59.040 think everyone would really love some clarification from the from 0:06:59.080 --> 0:07:01.719 the board, like and is he going to appeal or not? 0:07:01.920 --> 0:07:04.760 Like I would assume he's going to appeal, but isn't 0:07:04.800 --> 0:07:05.480 said for sure? 0:07:05.680 --> 0:07:08.560 Yeah, I mean it is. It is the key Man 0:07:08.680 --> 0:07:11.440 risk of all key Man risks of all time, right like, 0:07:11.920 --> 0:07:14.000 it very much is. And I will actually, you know, 0:07:14.400 --> 0:07:17.200 thinking a bit more about how how upset he's been 0:07:17.360 --> 0:07:20.120 of late about you know, the you know all the 0:07:20.120 --> 0:07:23.480 the onus in Burnen of being of owning a publicly 0:07:23.520 --> 0:07:26.800 traded company. It is correct me if I'm wrong, Tesla 0:07:26.880 --> 0:07:30.920 is the loan publicly traded company in his empire, right correct. 0:07:30.920 --> 0:07:33.960 He oversees six companies in Tesla is the only publicly 0:07:33.960 --> 0:07:36.560 traded one. And I would note that he started sort 0:07:36.560 --> 0:07:39.760 of intimating that he wanted a twenty five percent stake 0:07:39.800 --> 0:07:42.040 in Tesla, you know, over the past couple of weeks, 0:07:42.400 --> 0:07:45.800 knowing that this decision was pending so and maybe maybe 0:07:45.800 --> 0:07:48.080 knowing that it didn't seem to be going his way. 0:07:48.560 --> 0:07:50.680 So I think that the timing of that is very interesting. 0:07:55.640 --> 0:07:58.880 Let me ask you this, Jeff. Earlier, Dana referred to 0:07:59.240 --> 0:08:01.680 elanis teff on. Elon said that was the term you 0:08:01.680 --> 0:08:04.480 guys had for him because he never lost in court. 0:08:04.880 --> 0:08:06.640 What went wrong this time? 0:08:06.880 --> 0:08:09.520 Well, it's obviously always tied to the facts in the case. 0:08:10.040 --> 0:08:13.000 He won a shareholder suit a couple of years ago 0:08:13.040 --> 0:08:17.480 over the acquisition of Solar City, a renewable power provider, 0:08:17.760 --> 0:08:20.520 but on completely different facts than they has had nothing 0:08:20.520 --> 0:08:25.800 to do with the compensation this one. Frankly, guys, Elon 0:08:25.920 --> 0:08:29.520 Musk has been running in a way that you know, 0:08:29.600 --> 0:08:34.160 breaks all the norms, and somebody had to pull the reins. 0:08:34.400 --> 0:08:39.600 And Judge Kathleen McCormick is somebody who believes in pulling 0:08:39.640 --> 0:08:44.400 the reins. She is somebody who believes the system that 0:08:44.480 --> 0:08:48.079 we have is you know, pretty good, and people need 0:08:48.120 --> 0:08:51.000 to play by the rules, and everybody needs to play 0:08:51.000 --> 0:08:53.040 by the rules, including Elon Musk. 0:08:53.480 --> 0:08:57.160 Now is her ruling the final final ruling in this matter. 0:08:57.360 --> 0:09:00.120 Is this an appealable decisions? 0:09:00.080 --> 0:09:02.680 An appealable decision? But I must tell you if my 0:09:02.800 --> 0:09:08.080 thirty years here at Bloomberg covering Delaware courts, the chances 0:09:08.120 --> 0:09:10.800 that the Delaware Supreme Court are going to overturn her 0:09:10.840 --> 0:09:12.839 in this are slim. 0:09:13.120 --> 0:09:14.560 I would just like to point out that this is 0:09:14.600 --> 0:09:18.520 the exact same judge who oversaw Elon's attempt to get 0:09:18.559 --> 0:09:21.679 out of the Twitter deal when he was buying it, right, Jeff, 0:09:21.720 --> 0:09:23.600 I mean, this is sort of his second go round 0:09:23.640 --> 0:09:24.680 with Judge Katie. 0:09:24.960 --> 0:09:27.640 Let's put a little nuance into that. Judge Katie never 0:09:27.679 --> 0:09:31.440 had to rule in the Twitter case because Elon waived 0:09:31.480 --> 0:09:34.439 the white flag, because she started ruling in some of 0:09:34.480 --> 0:09:37.880 the pre trial hearings against him, and he you know, 0:09:37.960 --> 0:09:40.400 Elon is not a dumb person. 0:09:40.520 --> 0:09:43.679 So teflon Elon in court. I guess he meets his 0:09:43.800 --> 0:09:46.720 match in court when he when he tangles with this judge. 0:09:46.720 --> 0:09:46.880 Max. 0:09:46.960 --> 0:09:48.280 You were saying, so I was gonna say, first of all, 0:09:48.280 --> 0:09:51.000 you got fifty billion here, forty four billion on the 0:09:51.040 --> 0:09:54.559 forced Twitter ocquisitions starting to really add up, you know, 0:09:54.640 --> 0:09:56.839 even for somebody as rich as I just wanted to 0:09:56.880 --> 0:09:59.800 ask Jeff, How is it realistic that he could just 0:09:59.880 --> 0:10:03.600 move the incorporation of Tesla to a different state. Have 0:10:03.640 --> 0:10:06.640 any other people done that? Like, what would be involved 0:10:06.640 --> 0:10:07.640 in that? Do you have any sense? 0:10:08.679 --> 0:10:11.720 Yeah? The Delaware chance Re Court has been the target 0:10:11.760 --> 0:10:15.440 of a lot of people's ire over the last you know, decade, 0:10:15.480 --> 0:10:18.800 and it's almost always people who have lost cases. Right. So, 0:10:19.480 --> 0:10:24.080 there are other companies that have expressed an interest to 0:10:24.120 --> 0:10:27.760 follow Elon to Nevada. Trip Advisor owned by Greg Mfay 0:10:28.440 --> 0:10:31.960 comes to mind. But you know, some trip Advisor shareholders, 0:10:32.360 --> 0:10:34.880 as soon as they announced they wanted to move to Nevada, 0:10:35.280 --> 0:10:39.319 filed suit saying, oh, no, you're moving to Nevada so 0:10:39.400 --> 0:10:42.880 you can take advantage of lacks corporate governance laws, and 0:10:42.920 --> 0:10:44.079 that's not in our favor. 0:10:44.440 --> 0:10:48.040 Let me ask you this. This case, this lawsuit was 0:10:48.080 --> 0:10:54.200 obviously brought by a disgruntled Tesla investor against Musk and 0:10:54.280 --> 0:10:56.960 the board that assigned him this pay package. You know, 0:10:56.960 --> 0:10:59.640 the investor just you know, argued that this pay package 0:10:59.679 --> 0:11:02.679 is ec We were duped when we voted on it. 0:11:02.920 --> 0:11:06.000 The board wasn't upfront in terms of the nature in 0:11:06.040 --> 0:11:08.880 which you know, they arrived at this package that is 0:11:09.000 --> 0:11:13.280 the gripe and the complaint lodged by this one investor. 0:11:13.800 --> 0:11:16.360 Do we feel like that investor is speaking for the 0:11:16.400 --> 0:11:19.880 totality of the investor universe. Would they say, oh my god, 0:11:19.920 --> 0:11:22.559 please yes, pay this man what he wants, give him 0:11:22.559 --> 0:11:24.200 whatever he wants. Or would they say, no, we backed 0:11:24.200 --> 0:11:25.560 this investor, this is excessive. 0:11:25.840 --> 0:11:28.160 When the vote about the compensation went to shareholders, it 0:11:28.200 --> 0:11:31.319 was overwhelmingly approved by the shareholders. But the lawsuit sort 0:11:31.320 --> 0:11:33.520 of points out that, like the shareholders were duped into 0:11:33.559 --> 0:11:35.559 how this whole package came about. But no, I think 0:11:35.600 --> 0:11:37.800 that retail investors are upset. I mean they want to 0:11:37.840 --> 0:11:41.839 sue Delaware themselves, like they want Elon to Still they 0:11:41.880 --> 0:11:45.880 believe that Elon deserves this package, and you know, the 0:11:45.920 --> 0:11:49.160 retail shareholders I think are very nervous about what happens 0:11:49.280 --> 0:11:50.160 going forward. 0:11:50.280 --> 0:11:52.760 Okay, so that's the small like the mom and pop 0:11:52.880 --> 0:11:55.240 or the Reddit crowd shareholders. And do we have a 0:11:55.240 --> 0:11:58.480 sense on the larger, more institutional investors. Do we have 0:11:58.520 --> 0:12:01.040 any sense of what their stances or or hard to know. 0:12:01.400 --> 0:12:03.800 I'll mean a lot of them voted for this package, 0:12:03.840 --> 0:12:06.040 so I don't Yeah, I don't know what they're what 0:12:06.120 --> 0:12:07.640 they're feeling is today. I think a lot of them 0:12:07.640 --> 0:12:09.760 are still kind of trying to decipher the ruling. But 0:12:09.800 --> 0:12:12.559 the other point to make is that if all goes 0:12:12.600 --> 0:12:16.000 accordion to plan and Musk doesn't appeal, then his shares 0:12:16.440 --> 0:12:19.840 that he was awarded go back to Tesla and everyone 0:12:19.920 --> 0:12:22.960 and the dilution number comes down. So in theory this 0:12:23.080 --> 0:12:26.040 is good for shareholders. But the risk obviously is that 0:12:26.160 --> 0:12:29.120 Elon walks, and that is why everyone is on edge 0:12:29.200 --> 0:12:29.520 right now. 0:12:33.640 --> 0:12:37.040 So that appeal, Jeff, that you think is coming from 0:12:37.120 --> 0:12:40.000 Musk's legal team, as much of a long shot as 0:12:40.040 --> 0:12:43.200 it may be. Do these appeals tend to come really 0:12:43.320 --> 0:12:45.240 quickly or is it something that takes time? 0:12:45.800 --> 0:12:48.040 I mean relatively quickly. We're going to see an appeal 0:12:48.080 --> 0:12:48.640 within a month. 0:12:49.000 --> 0:12:51.560 Got it with it within a month. And one thing 0:12:51.800 --> 0:12:54.880 that struck me as I read your piece overnight was 0:12:55.400 --> 0:12:59.760 that ruling from the judge Kathleen McCormick. Two hundred pages long. 0:13:01.320 --> 0:13:03.640 It seems like a lot of pages for a ruling that, hey, 0:13:03.640 --> 0:13:06.359 in the end, I'm digging you avoiding this pay package. 0:13:06.440 --> 0:13:09.360 And it also came one year after the legal arguments 0:13:09.360 --> 0:13:11.960 were finished up. Are these the Norman in such matters. 0:13:12.240 --> 0:13:14.559 No, it's the first time in thirty years I've seen 0:13:15.000 --> 0:13:18.640 a decision take this long. She had back surgery last year, 0:13:18.720 --> 0:13:21.520 so that slowed it down. And then she also got 0:13:21.520 --> 0:13:24.320 a couple of cases that were fast tracked, so that 0:13:24.440 --> 0:13:27.880 slowed it down as well. Delaware prides itself on handling 0:13:27.960 --> 0:13:31.480 cases fast when they need to be handled fast, and 0:13:31.640 --> 0:13:33.480 there wasn't any need for speed on this. 0:13:33.920 --> 0:13:36.160 So and she decided Max to write on and I 0:13:36.200 --> 0:13:37.920 guess she's not that fast a writer. She was knocking 0:13:37.920 --> 0:13:38.960 out a couple pages a day. 0:13:39.200 --> 0:13:40.760 There's some spicy lines in there. 0:13:41.480 --> 0:13:44.000 I also think that she wanted to make it bulletproof, right. 0:13:44.040 --> 0:13:47.240 I mean, we're talking about the largest corporate pay package 0:13:47.440 --> 0:13:50.400 in history, and if she's going to shoot it down, 0:13:50.800 --> 0:13:54.959 she wants to make sure that the reasoning is rock solid, 0:13:55.160 --> 0:13:58.040 and that takes time. It's not something you can just, 0:13:58.440 --> 0:14:00.720 you know, regurgitate ten minutes. 0:14:01.000 --> 0:14:03.560 It's a remarkable opinion. I mean, everyone should read it. 0:14:03.559 --> 0:14:07.000 It's two hundred pages. There's Shakespeare references. You can command 0:14:07.000 --> 0:14:10.440 deaf the word Mars, and there's all these lines about Mars. 0:14:10.480 --> 0:14:12.160 There are like a lot of zingers. 0:14:12.400 --> 0:14:14.120 I'm not going through two hundred pay you went through 0:14:14.120 --> 0:14:16.600 two hundred pages overnight. If so, I need the cliff 0:14:16.600 --> 0:14:17.199 notes from you. 0:14:17.320 --> 0:14:19.920 I went through two hundred pages in about forty minutes. 0:14:20.200 --> 0:14:23.000 Wow, that's why you cover the Delaware chance to record 0:14:23.000 --> 0:14:25.920 for us here at Bloomberg News. That's a skill you 0:14:26.000 --> 0:14:27.040 develop over thirty years. 0:14:27.280 --> 0:14:29.920 It starts with a line that's something like, was the 0:14:30.000 --> 0:14:32.680 richest man in the world overpaid? And then it just 0:14:32.760 --> 0:14:34.840 gets into it and it goes through the facts of 0:14:34.840 --> 0:14:38.120 the case, and there's a Shakespeare reference to Henry the Fifth, 0:14:38.240 --> 0:14:40.880 and then there's a lot of references to Mars and 0:14:40.920 --> 0:14:43.400 how Musk was very like up front about the fact 0:14:43.400 --> 0:14:45.840 that he was using his wealth in Tesla to kind 0:14:45.880 --> 0:14:48.240 of fund the Mars mission. And then it just gets 0:14:48.280 --> 0:14:51.280 into how cozy he is with all of the board directors. 0:14:51.680 --> 0:14:54.000 I'm no like legal scholar, but it is like a 0:14:54.040 --> 0:14:56.600 real Zinger and it, you know, I mean, I think 0:14:56.600 --> 0:14:59.360 that's what the legal aces are sort of pouring over today. 0:14:59.360 --> 0:15:00.920 I mean, there are just a lot of really great 0:15:01.040 --> 0:15:03.560 lines in the opinion. The other thing that I think 0:15:03.600 --> 0:15:07.880 is remarkable is that Tesla's board so far has said nothing, 0:15:08.040 --> 0:15:10.800 I mean nothing from no comment from the board and 0:15:10.840 --> 0:15:13.520 believe me. I'm like texting the share and trying to 0:15:13.520 --> 0:15:16.760 get them to say something. There's been radio silence from 0:15:16.800 --> 0:15:17.560 this board. 0:15:17.560 --> 0:15:20.560 And presumably, even though the board is not communicating publicly, 0:15:21.000 --> 0:15:23.040 one can only imagine that behind the scenes, they are 0:15:23.080 --> 0:15:25.520 frantically trying to figure out what the hell to do here, 0:15:25.560 --> 0:15:28.040 and presumably are in contact with mister Musky. 0:15:28.120 --> 0:15:30.720 And remember that Elon is on the board. I mean 0:15:30.920 --> 0:15:33.320 there's an eight member board. Elon is on the board, 0:15:33.440 --> 0:15:35.800 so is his brother. It's very much his board. 0:15:35.960 --> 0:15:38.000 Yeah, I mean, this is one of the things I believe. 0:15:38.000 --> 0:15:41.400 The judge argued that essentially Elon is the board. I believe. 0:15:41.920 --> 0:15:44.040 Correct me if I'm wrong here. At one point, you know, 0:15:44.160 --> 0:15:47.200 he said during the trial, well, I was essentially negotiating 0:15:47.280 --> 0:15:48.800 against myself. 0:15:48.960 --> 0:15:51.160 Said he said that in his Yeah, that's. 0:15:51.080 --> 0:15:53.760 Probably not a great look in trying to argue that 0:15:53.760 --> 0:15:56.239 the pay package was properly negotiated. 0:15:56.760 --> 0:15:58.600 So as we've you know, the whole premise of this 0:15:58.680 --> 0:16:01.520 show is that it's Elon in right, and Tesla is 0:16:01.560 --> 0:16:05.040 the crown jewel of the empire, because that is the 0:16:05.080 --> 0:16:07.880 publicly traded company that has the biggest market valuation, and 0:16:08.560 --> 0:16:11.800 Musk's steak in Tesla and this compackage are the key 0:16:11.840 --> 0:16:14.760 to his wealth which he is using to fund his 0:16:14.800 --> 0:16:18.560 Mars mission. And if that is all now thrown out, 0:16:18.640 --> 0:16:21.000 it just really brings in all kinds of questions like 0:16:21.080 --> 0:16:24.880 does must just get so pissed off that he leaves? 0:16:24.920 --> 0:16:26.720 Like does he take his toys and go home and 0:16:26.760 --> 0:16:29.360 say screwt find another CEO? I'm out? 0:16:29.400 --> 0:16:32.480 Like, yeah, I'm super intrigued by that, right, Like, because 0:16:32.520 --> 0:16:35.400 he has, as you guys are saying, even before this 0:16:35.520 --> 0:16:38.440 came up, he was already that was his public posture. 0:16:38.520 --> 0:16:41.200 Obviously some of that was saber rattling. I want more control, 0:16:41.280 --> 0:16:44.440 I want more money. But you know, here is a 0:16:44.520 --> 0:16:46.920 guy who does have a history of at some point 0:16:47.000 --> 0:16:48.560 saying exactly to hell with it. 0:16:48.720 --> 0:16:51.360 Well not just that, but a guy who is given 0:16:51.560 --> 0:16:55.240 to these kind of grand gestures and also you know 0:16:55.320 --> 0:16:58.680 who behaves in an emotional way. I mean, you know, 0:16:58.720 --> 0:17:02.520 with Twitter, right kind of felt like he fired off 0:17:02.640 --> 0:17:06.119 kind of an ill considered tweet and then just dug 0:17:06.200 --> 0:17:10.119 himself into it. And you could imagine a situation where 0:17:10.119 --> 0:17:13.120 something kind of similar happens. You know. The other thing 0:17:13.200 --> 0:17:14.879 is we we talk about this all the time. On 0:17:14.920 --> 0:17:17.399 this podcast. Elon Musk is very rich. He is not 0:17:17.560 --> 0:17:21.719 cash rich, right, and his ability to be liquid largely 0:17:21.760 --> 0:17:24.800 stems from being able to sell Tesla shares and so 0:17:25.240 --> 0:17:25.520 you know. 0:17:25.760 --> 0:17:27.760 Or or max use them as collateral. 0:17:27.440 --> 0:17:31.080 Right, yeah, so yes, and so so like reducing his 0:17:31.320 --> 0:17:33.520 reducing the number of shares he owns, right, is going 0:17:33.560 --> 0:17:35.920 to have knock on effects for all of these other 0:17:36.040 --> 0:17:40.320 companies that depend on Elon Musk's largest either directly, either 0:17:40.400 --> 0:17:42.440 in the sense that he's financing them or the fact 0:17:42.480 --> 0:17:45.560 that Elon Musk is standing there behind them is allowing 0:17:45.600 --> 0:17:48.720 them to go and raise money from other investors. And again, 0:17:48.880 --> 0:17:52.800 I just think like Tesla is already under such pressure 0:17:52.880 --> 0:17:55.919 right now. We talked yesterday about the two waves of 0:17:55.960 --> 0:17:56.679 growth and how. 0:17:57.680 --> 0:17:59.640 His stock is down more than twenty percent of the year. 0:17:59.720 --> 0:18:02.159 Yeah, now Elon Musk is under pressure, and it just 0:18:02.240 --> 0:18:06.439 feels like wow, like things are really uneasy in this 0:18:06.560 --> 0:18:09.040 empire right now. And then and meanwhile, you know, of 0:18:09.080 --> 0:18:11.640 course it's continued, you know, kind of right wing signaling. 0:18:11.840 --> 0:18:14.960 When he wasn't you know, belly aching about Delaware, he 0:18:15.240 --> 0:18:19.720 was you know, these crazy increasingly frantic tweets about black 0:18:19.840 --> 0:18:23.960 crime and immigration and you know, just just like really 0:18:24.000 --> 0:18:27.880 really hard right stuff bordering on kind of white nationalism, 0:18:28.200 --> 0:18:30.520 and so all of that together it just feels like 0:18:30.600 --> 0:18:30.960 quite a. 0:18:30.880 --> 0:18:33.920 Stew All right, let's leave it there. Thanks for listening 0:18:33.960 --> 0:18:37.800 to Elon Inc. And thanks to our panel Jeff, Dana 0:18:38.119 --> 0:18:48.240 and Max. This episode was produced by Stacy Wong, Cale 0:18:48.280 --> 0:18:52.280 Brooks and Carmen Rodriguez. Naomi Shaven and Rayhan Harmanci are 0:18:52.320 --> 0:18:56.240 our senior editors. The idea for this very show also 0:18:56.440 --> 0:18:59.919 came from Rayhan Blake Maple's Handles Engineering, and we get 0:19:00.119 --> 0:19:04.280 special editing assistance from Jeff Grocott. Our supervising producer is 0:19:04.320 --> 0:19:07.959 Magnus Henrickson Huge thanks to Angel Rasio and Joel Weber. 0:19:08.440 --> 0:19:11.240 The elon Ink theme is written and performed by Taka 0:19:11.280 --> 0:19:14.760 Yasuzawa and Alex Sugiyia. Sage Bauman is the head of 0:19:14.800 --> 0:19:19.000 Bloomberg Podcast and our executive producer. I am David Papadopolis. 0:19:19.160 --> 0:19:21.680 If you have a minute, rate and review our show, 0:19:22.080 --> 0:19:24.960 it'll help other listeners find us. See you next week.