Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Let me tell you we have a new star. A
Speaker 2: star is born Elon.
Speaker 3: Juson Kennedy.
Speaker 2: He is the Thomas Edison plus plus plus.
Speaker 4: Of our age.
Speaker 2: Holy, his whole life is from a position of insecurity.
Speaker 2: I feel for the guy.
Speaker 4: I would say ninety eight percent really appreciate what he does.
Speaker 4: But those two percent that are nasty today, I'll pay
Speaker 4: in four post.
Speaker 2: We are meant for great things in the United States
Speaker 2: of America, and Elon reminds.
Speaker 3: Us of that.
Speaker 2: I'm very disappointed in Elon. I've helped Elon a lot.
Speaker 2: Welcome to Elon, a Bloomberg's weekly podcast about Elon Musk.
Speaker 2: It's Tuesday, July eighth. I'm your host, David Papadopolos. Okay, America,
Speaker 2: are you ready for the America Party? Elon Musk appareently
Speaker 2: thinks you are launching the third Party late last week
Speaker 2: and making bold declarations about upending the US political order
Speaker 2: and what amounts to a dramatic escalation of his feud
Speaker 2: with President Donald Trump. So we're going back to DC
Speaker 2: to bring in another one of our star political reporters,
Speaker 2: Nancy Cook, to get into the nitty gritty with me
Speaker 2: and Elon inks stalwart Max Chafkin. Hello to you both.
Speaker 1: Hey, David, Hi, David, Hi Max. Thanks for having me.
Speaker 2: Yeah, Nancy, you know, thanks for coming back. It's been
Speaker 2: a while, it's been too long. Now listen. If Elon's
Speaker 2: politics are the yin well, then Tesla and its wobbly
Speaker 2: share price is the yang. By the way, I actually
Speaker 2: have no idea if this actually makes any sense, but
Speaker 2: I'm gonna go with it. In with Max, you sort
Speaker 2: of yeah, sure, well it's close enough, yeah, good enough
Speaker 2: for rock and roll. And we'll bring in Esha Day
Speaker 2: to talk about the growing ang swirling in the market
Speaker 2: as Musk wades right back into politics. Okay, now, Nancy,
Speaker 2: so with your colleague there in Washington, Josh Green, we
Speaker 2: had previewed this last week, but then the big beautiful
Speaker 2: bill got final approval in Congress and signed into law
Speaker 2: by Trump on the fourth of July, and Musk then
Speaker 2: announces the formation of the America Party the very next day.
Speaker 2: So tell us here, what do we need to know
Speaker 2: about the America Party And what as you see it,
Speaker 2: do the prospects look like for this thing?
Speaker 1: Well, so Elon Musk was not happy with the tax bill,
Speaker 1: which I think that you guys have talked about extensively,
Speaker 1: and also hasn't been happy with the tariffs, and so
Speaker 1: he has broken with Trump and his advisors on some
Speaker 1: very key policy areas and then has threatened to start
Speaker 1: this third political party on X. And so far the
Speaker 1: idea just lives on X.
Speaker 2: And you use the term threat. Is that really all
Speaker 2: it's still is at this point a threat?
Speaker 1: Yes, that's all it is. I mean, creating a third
Speaker 1: political party is a huge heavy lift, and not just
Speaker 1: heavy lift initially, it's a sustained heavy lift.
Speaker 2: What are some of the mechanics of this heavy lifting?
Speaker 1: Sure, so it would require a ton of money. He
Speaker 1: has that, but you know, does he want to you know,
Speaker 1: invest that money for the long term to make an
Speaker 1: effect in both the midterms and the twenty twenty eight
Speaker 1: presidential election or does he need to focus on his companies?
Speaker 1: So money is one? Two is his attention span?
Speaker 2: You know?
Speaker 1: Sure he is threatening Trump and Trump officials about this
Speaker 1: on X. But to create a third political party, you
Speaker 1: have to register with a federal election commission. You have
Speaker 1: to go to each individual state and make sure that
Speaker 1: your party is registered in each political state. Like you know,
Speaker 1: there are some political consultants, I'm sure in DC who
Speaker 1: are salivating at the idea of taking Elon's money and
Speaker 1: doing this, But to actually do it, it's so much
Speaker 1: effort in all these states to do it, and there's
Speaker 1: so much paperwork, and so, you know, in addition to
Speaker 1: the money, question is does he have sort of this
Speaker 1: sustained attention span to do this. And then the other
Speaker 1: thing is that we have never really seen a successful
Speaker 1: third party. You know, Ross Perrot has tried it in
Speaker 1: the past, Andrew Yang tried it, Eddie Roosevelt, yeah, exactly,
Speaker 1: No Labels has tried it, but we've never seen like Wallace. Sure,
Speaker 1: but we've never seen like a really successful bid for
Speaker 1: a third party. This is sort of a threat that
Speaker 1: he's making.
Speaker 2: That is true. But Teddy Roosevelt and the Bull Moose Party,
Speaker 2: I believe, and Ross Perro and whatever the hell the
Speaker 2: name of his party was, they did very much affect
Speaker 2: those elections.
Speaker 1: Sure, there is no question that it could affect the election,
Speaker 1: and it could you know, sort of siphon off votes
Speaker 1: for a Prima Democrat or Republican party. Like Americans are
Speaker 1: very unhappy with the political system at this point. But
Speaker 1: I think it's just like, does he have the attention
Speaker 1: span and the money to do it? You know, for
Speaker 1: a while, because really the next marker would be the midterms,
Speaker 1: the twenty twenty six mid terms, when Republicans could lose
Speaker 1: the House. That's sort of what's up for grabs. Then
Speaker 1: and then the twenty twenty eight election, the presidential election.
Speaker 1: You know, assuming Trump doesn't try to say a third term,
Speaker 1: which would require him changing the constitution, but let's not
Speaker 1: put it past him. It will be a totally open election.
Speaker 1: There will be people running on the Republican side and
Speaker 1: people on the Democratic side, and I think it will
Speaker 1: be a very crowded field. And so, you know, does
Speaker 1: Musk want to put up a candidate for that? You know,
Speaker 1: I think that that's a ways off, but you know,
Speaker 1: I think that there are certainly these conversations happening.
Speaker 2: Yeah, so Max, this is something that Josh Green also raised,
Speaker 2: the attention span issue, the stick to itiveness sort of dubious,
Speaker 2: like Nancy is and Joshing General has a very grim
Speaker 2: outlook on the future of the America Party. But it's
Speaker 2: curious to me that they both raised that question from
Speaker 2: afar and I get it at some level because the
Speaker 2: guy just bounces around all over the place, and yet
Speaker 2: at the same time, it strikes me that you doubt him,
Speaker 2: you question him and his stick toitiveness on something that
Speaker 2: he starts obsessing about, and you can get burned.
Speaker 3: Right, Yeah, it's true.
Speaker 5: And you know, some of what Musk has said over
Speaker 5: the last couple of days has suggested that he's thinking
Speaker 5: about this in the same way that he's thinking about
Speaker 5: these big bets. He keeps reposting these comments from fans
Speaker 5: that say, like.
Speaker 2: They doubted he could start space X and he did.
Speaker 3: You know, so this is like his next act.
Speaker 5: People forget though, that Musk has threatened to start lots
Speaker 5: of that he never actually followed such a so he
Speaker 5: threatened to start like a news outlet, or he's done
Speaker 5: it a few times, so, you know, made various threats
Speaker 5: about media. You know, even give you well he did,
Speaker 5: You're right, he did by X. But he said he
Speaker 5: was starting this thing called Pravda a few years ago
Speaker 5: and that never happened. It's not like he never sort
Speaker 5: of flakes out on it. In fact, he flakes out
Speaker 5: on threats that he makes on X.
Speaker 2: What's just hit rich.
Speaker 3: I don't know.
Speaker 5: Now obviously, the like sort of maximalist version of this,
Speaker 5: which is like he finds, like I don't like, you know,
Speaker 5: four hundred congressional candidates and goes through the very hard,
Speaker 5: very boring, probably humbling work of trying to get these
Speaker 5: people on ballots in individual districts. It's this is what
Speaker 5: Nancy's talking about. It would take forever, it would be
Speaker 5: very expensive. These candidates would also have to raise a
Speaker 5: ton of money from outside. It would just be like
Speaker 5: a very messy thing, pretty much the opposite of like
Speaker 5: flying into Butler for an hour and enjoying the fun
Speaker 5: of a shop rally. But I do wonder what if
Speaker 5: something in between happens, right, and Musk has already floated
Speaker 5: various versions of this, like he could just like fund
Speaker 5: a handful of Republican primary challenges, call it the America Party,
Speaker 5: like not actually file with the FEC, but just say, like,
Speaker 5: you know, that's what this effort is, and just act
Speaker 5: like a normal kind of right wing mega donor attempting
Speaker 5: essentially to drag you know, the MAGA coalition to the
Speaker 5: right and also probably in the direction of subsidies, you know,
Speaker 5: for his companies.
Speaker 2: So like the Tea Party is a wing of the
Speaker 2: Republican Party, so too with the America Party. That's what
Speaker 2: I'm saying now, Nancy, are you familiar with the term
Speaker 2: man moot?
Speaker 1: I am not.
Speaker 5: Oh that's our version of taco. It's Musk always makes
Speaker 5: up with Trump. So it's this idea, and I feel
Speaker 5: like you are even buying into it in this answer.
Speaker 5: It's this idea that like.
Speaker 2: Yeah, don't don't tell her what.
Speaker 5: He's talking a big game, but he's not really gonna
Speaker 5: follow through, you know, and we kind of saw this.
Speaker 2: He's got a lot more to lose than Trump does.
Speaker 2: But I gotta say this, Max, this is my point here.
Speaker 2: Man moot's not right now. It's a looking a little rough.
Speaker 2: I actually think it's looking a little bit more like twamum,
Speaker 2: what is that? Just that's me moood backwards? Right, But
Speaker 2: you're still all in on that mood.
Speaker 3: No.
Speaker 5: I mean, I just think that the force pushing Musk
Speaker 5: and Trump together remains, and like you see it even
Speaker 5: in the way that Trump is attacking Musk, like he
Speaker 5: has like insulted Musk a few times, but it doesn't
Speaker 5: feel like and maybe Nancy, maybe I'm just you know,
Speaker 5: failing to appreciate this. But like it feels like he
Speaker 5: hasn't used his like meanest insults yet. He's also focused
Speaker 5: on the third party, not as this like hideous affront,
Speaker 5: but he's just sort of said, it's impractical, this is
Speaker 5: the way the system is. It feels like he's pulling
Speaker 5: his punches a little bit and avoiding giving Musk the
Speaker 5: full double barreled you know, insult canon that he sometimes
Speaker 5: reserves for his enemies.
Speaker 3: It's always been a two party system, and I think
Speaker 3: starting a third party just adds to confusion. It really
Speaker 3: seems to have been developed for two parties. Third parties have.
Speaker 5: Never worked, so he can have fun with it, but
Speaker 5: I think it's ridiculous.
Speaker 1: Well, Trump also just historic, like does get mad at people.
Speaker 1: But I would say one interesting thing about him and
Speaker 1: he will attack them and he can be vicious, is
Speaker 1: there are very few people that he like the Bridges
Speaker 1: are totally burned. You know, he was furious with Steve
Speaker 1: Bannon when Steve Bannon left the White House during the
Speaker 1: first term. Now they talk. You know, Steve Bannon was
Speaker 1: at lunch at the White House, you know, a few
Speaker 1: days before Trump bomb Durant. Trump is willing to make
Speaker 1: up with people, like I think, much more so than
Speaker 1: people realize, and so I could see them one hundred
Speaker 1: percent making up. I also just want to make the
Speaker 1: point that Elon doing this, you know, also runs the
Speaker 1: risk of just really alienating Republican voters who are completely
Speaker 1: beholden to Trump, and like, if they're going to pick
Speaker 1: someone Trump versus Elon, they're going to pick Trump. I mean,
Speaker 1: Trump is not just like a political figure or president,
Speaker 1: do you know, He's almost like a movement figure in
Speaker 1: terms of politics. I mean, people just feel so strongly
Speaker 1: about him. His supporters, his detractors also feel strongly that
Speaker 1: I just think, you know, Musk would not just have
Speaker 1: to take on the mechanics of the third party and
Speaker 1: the money and the time and the attention, but also
Speaker 1: just take on sort of the cult of Trump's personality.
Speaker 2: You know.
Speaker 5: I've seen Nancy brought up these political consultants like salivating
Speaker 5: over the chance to take Elon Musk's money, and I
Speaker 5: uctually see some of this slipping out into public. Andrew
Speaker 5: Yang has been tweeting at Musk. Mark Cuban has been
Speaker 5: tweeting at Musk. These consultants are all talking about how
Speaker 5: great an idea a third party is. But most of
Speaker 5: these people are talking about a centrist third party, which
Speaker 5: is not what Elon Musk is talking about. He's talking
Speaker 5: about like a far right political party. Yes, all right,
Speaker 5: what is his complaints, Like, what are his policy positions? Well,
Speaker 5: his policy position is that we need to drastically cut
Speaker 5: the deficit. Essentially, it's not that the Big Beautiful Bill
Speaker 5: is bad because it cut Medicaid, which is what the
Speaker 5: centrists think and which actually might be a credible position
Speaker 5: from which to start trying to build some kind of
Speaker 5: political movement. It's that they didn't cut enough. He's called
Speaker 5: social Security a Ponzi scheme on the Joe Rogan Show.
Speaker 5: He is not in sort of the mainstream of like
Speaker 5: what centrist voters think. His views are sort of out there.
Speaker 5: They're all over the place, and he's attacking Trump from
Speaker 5: the right.
Speaker 2: Okay, So that is a fair point that saying we
Speaker 2: got to go harder at social Security and Medicare and
Speaker 2: Medicaid is not a centrist view. But Nancy's saying that
Speaker 2: the debt is out of control and our deficits are
Speaker 2: out of control. That's not far right politics, is it.
Speaker 1: That's just not a view that is in vogue right
Speaker 1: now in Washington, I would say broadly. And it's not
Speaker 1: something that voters are caring about. And talking about cutting
Speaker 1: social security regardless of party is like the third rail
Speaker 1: for voters. Like old people want their social security. They
Speaker 1: don't want to support some political figure who talks about
Speaker 1: cutting it or even changing it. I mean that's why
Speaker 1: Doje I think was so unpopular. That's not a winning position.
Speaker 3: Yeah.
Speaker 5: I mean we're seeing like a little mini illustration of
Speaker 5: how what a headache doses is going to be both
Speaker 5: for the White House but also maybe even more so
Speaker 5: for Elon Musk with this tragedy in Texas right like
Speaker 5: one of the subplots. And I think we're I don't
Speaker 5: think we know yet, but you're starting to see reports
Speaker 5: about was Noah the Weather Service essentially understaff? Did that
Speaker 5: contribute to not predicting? Like there's just like a lot
Speaker 5: of ways in which.
Speaker 2: An understaff because potentially they were gutted by Doge.
Speaker 5: Yeah, And they're just all sorts of these kind of
Speaker 5: little things where we're attacking government services that were working well,
Speaker 5: created all sorts of liabilities for Musk and then in
Speaker 5: turn for.
Speaker 2: And whether or not that actually turns out to be
Speaker 2: the case or not. And I'm not sure we know
Speaker 2: the answer to that. The narrative politically certainly does not help.
Speaker 5: Yeah, no, no, And it just shows that like beyond
Speaker 5: just like going to the DOGE website and seeing the
Speaker 5: top line number, you know, one hundred billion or whatever, like,
Speaker 5: there aren't a lot of successes that you can point to.
Speaker 5: So it's like it's like a lot of political liabilities
Speaker 5: and a lot of disruption, kind of in the bad sense,
Speaker 5: without necessarily a ton of political upside.
Speaker 2: Dirt parties have never worked in the sense that they've
Speaker 2: never won an election, as you were pointing out, Nancy,
Speaker 2: but as I was remembering, Teddy Roosevelt did cause believe
Speaker 2: William Howard Taff to lose the election way back when.
Speaker 2: And I think you can make an argument that Ross
Speaker 2: Perrot cost George Bush the nineteen ninety two election. If
Speaker 2: the America Party picks off voters, who is it picking off,
Speaker 2: even if it's some at the margin, is it twenty
Speaker 2: something year old guys, And where is it pulling people from? Well,
Speaker 2: what's a.
Speaker 1: Little early to say, because you would often also have
Speaker 1: to see like who are the candidates that this party
Speaker 1: is putting forth and backing, and what do those people
Speaker 1: look like? But I think it would probably pick up
Speaker 1: off like you know tech bros who are like, oh right,
Speaker 1: we should cut social security, we should shrink the federal government.
Speaker 1: I'm not sure like how big of a slice of
Speaker 1: the electric it is, But again, it would really depend
Speaker 1: what Elon's going to have to do if he does
Speaker 1: the Third Party is find all these candidates who also
Speaker 1: want to cross Trump, and then he will put them
Speaker 1: up for different congressional seats. But each candidate will sort
Speaker 1: of have to run his or her own race and
Speaker 1: have his or her own policy positions, which I guess
Speaker 1: Elon would have to support, And so you know, I
Speaker 1: think each of those candidates would appeal to probably different people.
Speaker 2: Yeah, now, Max, when we were talking about what this
Speaker 2: party stands for, down on very very much against debt
Speaker 2: and deficits. That, by the way, is also the origin
Speaker 2: story of Doge. What else in his eeks is in
Speaker 2: such do we know that this party will stand for?
Speaker 5: It's like a combination of Elon's interests and sort of
Speaker 5: techno Silicon Valley right wing is and I'm piecing this
Speaker 5: together from a bunch of tweets, but Elon has indicated
Speaker 5: that modernizing the military with AI and robotics.
Speaker 3: Pro tech, pro crypto, pro natalist.
Speaker 5: It's like a bunch of essentially you know, internet guy ideas.
Speaker 5: But again, like I don't know how Big Musk's bases, Like,
Speaker 5: it's not that many people. It's enough people to build
Speaker 5: a very successful car company. I'm not sure it's enough
Speaker 5: people to build a successful political movement, you know, watching
Speaker 5: this so I covered Peter Teal's donations in the twenty
Speaker 5: twenty cycle, and he, you know, Teal spent all the time.
Speaker 5: I had, I don't know, more than fifty million dollars.
Speaker 3: To get too.
Speaker 5: Essentially two Republican Senate candidates who are sort of far
Speaker 5: right candidates to win their primaries.
Speaker 3: And it was it was pretty successful. Both JD.
Speaker 5: Vans and Blake Masters managed to win their primaries, and
Speaker 5: one of those two guys, JD. Vans, won a Senate
Speaker 5: election that costs fifty million dollars. And the reason it
Speaker 5: worked primarily was not the money, but the fact that
Speaker 5: Donald Trump endorsed both of those guys, and in those elections,
Speaker 5: the big thing as big as the money was. It
Speaker 5: was trying to get Trump to endorse those guys, and
Speaker 5: it just kind of shows you that, like on the right,
Speaker 5: it's pretty hard to run a successful election and not
Speaker 5: get smushed if you're on the wrong side of Trump.
Speaker 1: To me, Elon sort of putting together this third party,
Speaker 1: I'm like, who does that appeal to, apart from David Sachs,
Speaker 1: who like maybe would go along with him.
Speaker 3: I don't know, Nancy, I don't know. David sax is
Speaker 3: a pretty good job right now. He may stick with it,
Speaker 3: which is which is he's the President's AI advisor. He's
Speaker 3: in proximity to power.
Speaker 1: Right So if he goes with Elon, which I could
Speaker 1: sort of see him being one of the few people
Speaker 1: who does, he will lose that job because the Trump
Speaker 1: people are all about revenge and leverage and they will
Speaker 1: lace out anybody who goes along with this Elon idea.
Speaker 2: Nancy, on your point about how Trump has a way
Speaker 2: actually of making up with quite a few people, Does
Speaker 2: he have a sense of gratitude towards Musk and the
Speaker 2: money in the ground game in twenty twenty four, and
Speaker 2: is Donald Trump in the White House right now? If
Speaker 2: not for Elon Musk.
Speaker 1: So I haven't talked to Trump about this specifically, so
Speaker 1: I have no idea exactly what he's thinking. I mean,
Speaker 1: I think, you know, the people around Trump and sort
Speaker 1: of the Trump world at large, you know, I think
Speaker 1: they're grateful for Elon's money. I think they think Elon's
Speaker 1: a little weird. I think Elon made a bunch of
Speaker 1: people in the White House mad or annoyed them. But
Speaker 1: I also think they think they won also because of
Speaker 1: Trump and like the political figure that he is, and
Speaker 1: and the team's of sort of political savviness. I don't
Speaker 1: think that they give all the credit to Elon. I
Speaker 1: think they would be like offended by that suggestion.
Speaker 2: Not all the credit. But did he perhaps tip the balance?
Speaker 1: I guess would be I don't think they would say
Speaker 1: he tipped the balance. I think that they would say
Speaker 1: things like Trump getting indicted, which like supercharged the bas's
Speaker 1: sense of grievance and like made really people coalesce around him,
Speaker 1: was a key moment, you know, the assassination attempt, Biden
Speaker 1: just being such a bad candidate. I think that there
Speaker 1: were a bunch of things Musk helped with some money
Speaker 1: in some key primary states. But I don't think that
Speaker 1: they would say they owe the election to him, and
Speaker 1: I think that he has created a lot of headaches
Speaker 1: for them since then. I will also just say, like broadly,
Speaker 1: the vibe in the White House now and in Trump
Speaker 1: world is like they feel like they're winning. Their ecstatic
Speaker 1: you know, they feel like they passed this big tax bill.
Speaker 1: You know, Trump is like riding high. Staff is riding high,
Speaker 1: and Elon, meanwhile, is just kind of annoying them. And
Speaker 1: so that is the kind of the context in which
Speaker 1: all of this is happening.
Speaker 2: Okay, So Naty, I'm going to ask you again now
Speaker 2: about mam moot and whether you indeed subscribe to the
Speaker 2: Max Chaffkin theory. Do you believe in memot? Yeah?
Speaker 1: I think people miss this about Trump. One is that
Speaker 1: he is a very hospitable person and like is actually
Speaker 1: more charming in person than people think. And the second
Speaker 1: is is that he he will like accept people's apology
Speaker 1: or forgive people. So I feel like, yeah, Elon's not
Speaker 1: in the wilderness like they could make up, you know
Speaker 1: today without an issue.
Speaker 5: Listen, Trump hasn't even given Muscow a diminutive nickname yet
Speaker 5: and until that happens like, I don't even think this
Speaker 5: is a full true feud.
Speaker 2: Final question for the two of you. In November twenty
Speaker 2: twenty six, does the America Party take at least one
Speaker 2: one seat in either the chambers of Congress? Nancy Cook, Nope,
Speaker 2: Max Chefkin No.
Speaker 3: My answer is no. But I think that Elon Musk
Speaker 3: will successfully back one House candidate, not necessarily on an
Speaker 3: America Party line.
Speaker 1: Gotcha, I could see that. I agree with Max.
Speaker 2: Nancy come back and join us again soon anytime.
Speaker 1: Thanks for having me.
Speaker 2: So. Max and I are now joined by Esha Day,
Speaker 2: a stocks reporter here at Bloomberg. Thank you for having me, Esha.
Speaker 2: In the wake of the launch of the Great America
Speaker 2: Party on Saturday, the stocks sank seven percent yesterday, which,
Speaker 2: as you've often told us, Escha, by Tesla's standard, it's
Speaker 2: not an enormous move yet seven percent, you know, seven
Speaker 2: percent bounce back a little bit today, But the mood
Speaker 2: out there seems pretty glum. That angst that among the
Speaker 2: bulls that we've noted in recent months seems to keep
Speaker 2: building and building. Tell us about what you're reading in
Speaker 2: notes from analysts. What kind of you know, what you're
Speaker 2: hearing in conversations you're having what is Esha day seeing.
Speaker 4: Sure, I think the mood I would call it one
Speaker 4: of extreme caution at this point. So most of the
Speaker 4: people that I'm speaking to, and mind you, these are
Speaker 4: mostly TESLA investors or I would say bullish and bearish
Speaker 4: analyst as well, but essentially everybody's kind of keeping their
Speaker 4: fingers crossed and really hoping that this will just kind
Speaker 4: of blow over.
Speaker 2: You're just hoping it's going to go away.
Speaker 5: You hear what you hear what Ash's saying, right, She's
Speaker 5: talking about Memoot, Musk and Trump that this will just
Speaker 5: knock over. He's not going to do this. They're gonna
Speaker 5: make up. That's the trade.
Speaker 2: Okay, So they're hoping for Memoot, but at the same
Speaker 2: time they're not thrilled, right, I mean, I think among
Speaker 2: those expressing concern at a louder and louder you know level,
Speaker 2: is Dan ives How do you refer to.
Speaker 3: Dan Ives man the QAnon shaman of right?
Speaker 2: I mean, what did he what did he write? Was
Speaker 2: it just today? I think it's just today?
Speaker 4: But I mean, this is not the first time that
Speaker 4: Dan is coming out and kind of, you know, really
Speaker 4: pushing back on this what he called the soap opera,
Speaker 4: and he's saying that soap opera needs to stop. But
Speaker 4: his note this morning, he doesn't.
Speaker 2: He's not enjoying, no, clearly not, which.
Speaker 4: Is which is unusual for Dan, I would say. So
Speaker 4: he's essentially saying that the company is now at a
Speaker 4: tipping point, I mean, big words. His point is a
Speaker 4: Tesla board. This is the time for Tesla board to
Speaker 4: really step in and make some changes and try and
Speaker 4: rain in Musk and his antics somewhat. And he believes
Speaker 4: that this is the time to do it. I mean
Speaker 4: the note is pretty forceful. As Max said, I would
Speaker 4: call Dan an uber bull. His price target on the
Speaker 4: Tesla stock is the highest on what Street. It's five
Speaker 4: hundred dollars.
Speaker 2: What is the stock at right now?
Speaker 4: I think it's around two hundred dollars, yes, yeah, and
Speaker 4: it's been the stock has been hovering around that level
Speaker 4: despite some fairly large ish moves for about a month
Speaker 4: or so now, so, yeah, it's three hundred dollars. He
Speaker 4: has a five hundred dollars price stylege.
Speaker 2: So Max, the board, mister Ive says, is going to
Speaker 2: step in. I mean he's gonna him to heal.
Speaker 3: You read dan Ives note, and as Iha says, you can.
Speaker 5: Sort of see why it's a problem because because dan
Speaker 5: Ives his big thing after the election was that this
Speaker 5: was great news for Tesla because Trump, the most powerful
Speaker 5: man in the world, is suddenly aligned with the CEO
Speaker 5: of Tesla. You know, Trump is going to basically sort
Speaker 5: of use his political force to essentially legalize autonomous cars
Speaker 5: all of a sudden.
Speaker 3: That's going to ease the path for Tesla's robotaxis. That
Speaker 3: was the thesis. Now as that thesis is falling apart, obviously.
Speaker 5: That that's going to create problems, and that's why you
Speaker 5: see dan Ives wanting to find finding move, find some
Speaker 5: way to avoid.
Speaker 3: A protracted feud.
Speaker 5: However, when you read this note that Ash's talking about
Speaker 5: this morning, you sort of see why it's going to
Speaker 5: be pretty hard for the board to do any of
Speaker 5: the stuff that dan Ives says, because there's no real stick.
Speaker 5: Dan Ives doesn't propose threatening to fire Elon because that
Speaker 5: is pretty much unthinkable to the Uber. Part of ives
Speaker 5: thesis is that Elon Musk creates a lot of the
Speaker 5: value for the company. So his solution is essentially the
Speaker 5: other version of this, which is to just pay him
Speaker 5: a lot of money.
Speaker 3: So the way wait, wait, so really.
Speaker 2: The proposal is to encourage bad behavior.
Speaker 3: The proposals where there's a fork in the road. Musk
Speaker 3: is out of control and.
Speaker 5: To fix this, essentially, he wants the Tesla board to
Speaker 5: write him a big check. And not only one big check,
Speaker 5: because the plan is, if you read this note, is
Speaker 5: to give Musk a new pay package that will bump
Speaker 5: his equity up to twenty five percent. This is the
Speaker 5: idea that if if Musk owned a little bit more
Speaker 5: of Tesla, maybe he would be incentivized to spend some
Speaker 5: more time there. He also wants for the board to
Speaker 5: consider writing a second check, which is to buy Xai,
Speaker 5: which of course would be another mega payout for Elon Musk.
Speaker 5: And remember Xai is this company that Elon sort of
Speaker 5: started in his spare time, recruited a bunch of ex
Speaker 5: Tesla engineers. In certain ways, it seems kind of competitive
Speaker 5: to Tesla. So the solution is to Musk and line
Speaker 5: essentially by aligning the incentives. Another way to say that
Speaker 5: would be to give him a bunch of more money.
Speaker 2: Right, so tie him closer to the company, you punish him,
Speaker 2: you punish him Max by throwing bigger checks at him.
Speaker 2: I mean, I may you know it drives. I mean,
Speaker 2: but here's the thing. If your musk, Esha, and your
Speaker 2: net worth is what roughly, it obviously goes.
Speaker 4: Up and down a lot. But right now it's around
Speaker 4: three hundred and forty five billion.
Speaker 2: Dollars, all right, I mean, is an extra four seven
Speaker 2: eight ten billion? I mean, does it matter? I mean,
Speaker 2: I guess it would only matter if it helps you
Speaker 2: fund the America Party. But part of the whole thesis
Speaker 2: is I did iways want to pry you away from
Speaker 2: that god forsaken idea. So I don't know. I mean
Speaker 2: to Max's point, though, Esha, about how much Elon is
Speaker 2: Tesla and Tesla is Elon. You had somebody quoted in
Speaker 2: his story recently saying that fully ninety five percent of
Speaker 2: the value of Tesla, of the market cap, which is
Speaker 2: some nine hundred and sixty billion dollars, ninety five percent
Speaker 2: is not derived from current operations, but from anticipation of
Speaker 2: what is to come, new business lines, new revenue streams.
Speaker 2: I mean, it's a staggering number. I think for most companies,
Speaker 2: the value that the CEO or the value of what
Speaker 2: is to come down the line and things that we
Speaker 2: can't quite even see yet is going to be far,
Speaker 2: far smaller than that. This is the cult of Musk
Speaker 2: and the genius of Musk, as dan Ives is saying,
Speaker 2: you may be furious with him and disappointed, but you're
Speaker 2: you're stuck with him. Absolutely.
Speaker 4: Yes, what dan Ives is saying, and the really strict
Speaker 4: measures that he's putting out, they really speak to this
Speaker 4: kind of oh, you know, push and pull that Tesla
Speaker 4: investors are feeling right now, like they are furious. They
Speaker 4: do think it's a it's a huge distraction. You know,
Speaker 4: this is they're powerless though they're powerless because I mean
Speaker 4: they have put that power in that man in some
Speaker 4: ways as well.
Speaker 2: So powerless that I've says, give him more money, Look,
Speaker 2: I give him a bigger cat. I think.
Speaker 3: Honestly, there's a sense to it. I mean, it does.
Speaker 5: It does seem like, as you say, David, incentivizing bad behavior.
Speaker 5: Although it's hard to imagine Musk responding well. Everything we
Speaker 5: know about Elon Musk, it's hard to imagine him responding
Speaker 5: well to an ultimatum. You worry, you give him an
Speaker 5: ultimatum he might do something even more rat We've seen
Speaker 5: that over and over again, and that is you know,
Speaker 5: in a weird way, right, It's what gives him so
Speaker 5: much power, is that is that he is a little
Speaker 5: bit of erratic. There is this kind of wild card factor. Again,
Speaker 5: it's a little it's a little bit trumpy.
Speaker 2: It is a little bit trumpy. By the way, Esha
Speaker 2: I will note that since Tesla joined the S and
Speaker 2: P five hundred at the end of twenty twenty, the
Speaker 2: stock is wildly underperformed the S and P five hundreds,
Speaker 2: up all of twenty six percent. I mean for that
Speaker 2: period basically what you could get from owning treasury bills.
Speaker 2: The S and P is up seventy seven percent in
Speaker 2: that time to on a total return basis, and the
Speaker 2: Nasdaq is up eighty three percent over that time. Granted,
Speaker 2: this strips out the immediately preceding period, which was the pandemic,
Speaker 2: the crazy pandemic rally that sent Tesla soaring. But yeah,
Speaker 2: you're not talking about a four and a half year
Speaker 2: period where the stocks treading water.
Speaker 4: Yep, that's true. And why is that? One part of
Speaker 4: it is definitely that there was it was preceded by
Speaker 4: that seven hundred and fifty percent rally in twenty twenty.
Speaker 2: Say that number again, was it seven hundred and fifty
Speaker 2: bigger than I remember? How do we miss that?
Speaker 5: Max?
Speaker 4: But some of it is also just this like constant
Speaker 4: noise that has surrounded the stock since then, the ev
Speaker 4: business has kind of stabilized, so there's not a lot
Speaker 4: of surprise in there.
Speaker 2: Then there was a stabilized it's kind of but then.
Speaker 4: Yes, and then it started kind of slowing down, So
Speaker 4: that was one disappointment. You know, the core business isn't
Speaker 4: really growing kind of leaps and bounds as it was
Speaker 4: supposed to. Then there was the noise around Twitter, him
Speaker 4: buying Twitter, and that entire distraction around it, him having
Speaker 4: to sell stock. I mean, and when I talked to
Speaker 4: investors right now, that is one instance that keeps coming
Speaker 4: up a lot, not so much his other controversies, of
Speaker 4: which there have been many, but that the Twitter controversy
Speaker 4: or you know, buying Twitter, and the distraction related to
Speaker 4: Twitter which is now X and now his political foray.
Speaker 4: These are the two big.
Speaker 2: So the soap opera that I've refers to, I mean,
Speaker 2: there is really several soap operas that seem.
Speaker 4: Refers to the political soap opera, which I think has
Speaker 4: just gone completely out of control, especially after Musk and
Speaker 4: Trump had their fallout. So, you know, I mean, it
Speaker 4: was always kind of a wild bed, right, like the
Speaker 4: fact that these two men are really close and just
Speaker 4: the proximity to the president will give Tesla some sort
Speaker 4: of a wild edge over competitors. It was always a lot.
Speaker 2: There was a lot of steam. It was a lot
Speaker 2: of smoke. Max, being the the ace reporter he is,
Speaker 2: he sniffed that out in November, to which I had said, well,
Speaker 2: if that is true, if it's all smoke and mirrors,
Speaker 2: you know, just just collect the gains and sell the stock.
Speaker 2: And I don't know, And in hindsight.
Speaker 5: Yeah, that would have been Would we should charge.
Speaker 3: More for this podcast?
Speaker 2: Yes? All right, Esha, thanks for joining Max, Thanks as always,
Speaker 2: Thank you, Thanks David. This episode was edited by Anamas
Speaker 2: Racus and produced by Stacy Wong, with help from Rachel Lewis,
Speaker 2: Chrisky Wait, Maple's Handles Engineering, and Dave Percelfact checks. Our
Speaker 2: supervising producer is Magnus Henrikson. The elon Ingk theme is
Speaker 2: written and performed by Taka Yasuzawa and Alex Sugiira. Brendan
Speaker 2: Francis Newnham is our executive producer, and Sage Bauman is
Speaker 2: the head of Bloomberg Podcasts. A big thanks as always
Speaker 2: to our supporters Joel Weber and Brad Stone. I'm David Papadoppo.
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