WEBVTT - Tesla Slows Down, X's Value Drops and 2024 is Just Getting Started 0:00:04.000 --> 0:00:06.760 Well, Elon Musk gives now the richest person on the planet. 0:00:07.240 --> 0:00:10.080 More than half the satellites in space are owned and 0:00:10.200 --> 0:00:15.600 controlled by one man starting his own artificial intelligence company. Well, 0:00:15.640 --> 0:00:17.279 he's a legitimate super genius. 0:00:17.480 --> 0:00:19.000 I mean legitimate. He says. 0:00:19.000 --> 0:00:21.599 He's always voted for Democrats, but this year it will 0:00:21.640 --> 0:00:22.040 be different. 0:00:22.079 --> 0:00:23.040 He'll vote Republican. 0:00:23.320 --> 0:00:25.759 There is a reason the US government is so reliant 0:00:25.840 --> 0:00:26.239 on him. 0:00:26.440 --> 0:00:30.000 Elon Musk is a scam artist and he's done nothing. 0:00:30.640 --> 0:00:33.400 Anything he does is fascinating people. 0:00:42.520 --> 0:00:45.600 Welcome to Elon Inc. Where we talk about Elon Musk's 0:00:45.680 --> 0:00:49.360 vast corporate empire, his latest gambits and antics, and try 0:00:49.360 --> 0:00:51.520 to make sense of it all. I'm your host, Max 0:00:51.600 --> 0:00:56.880 Chapkin in for David Poppadopolis. Today we're talking about Tesla. 0:00:57.160 --> 0:01:00.840 The company's fourth quarter sales numbers came out earlier this morning, 0:01:01.000 --> 0:01:04.679 and Elon Musk's car company reported that had delivered nearly 0:01:04.800 --> 0:01:08.920 four hundred and eighty five thousand vehicles between October and December. 0:01:09.200 --> 0:01:13.240 That's basically what Wall Street expected. Meanwhile, something that did 0:01:13.240 --> 0:01:17.120 not meet expectations, Fidelity once again said that x Elon 0:01:17.240 --> 0:01:21.640 Musk's social media company was worthless, not worthless, but worth 0:01:21.920 --> 0:01:24.880 less than it was when Elon bought it. X lost 0:01:25.000 --> 0:01:28.040 nearly eleven percent of its value in November, which sounds 0:01:28.600 --> 0:01:30.720 bad until you realize that was the same month he 0:01:30.800 --> 0:01:33.640 told Bob Eiger, the CEO of one of the world's 0:01:33.640 --> 0:01:36.760 most beloved companies, to go fuck himself, to discuss this 0:01:36.920 --> 0:01:39.360 and to look at what's ahead in the new year. 0:01:39.400 --> 0:01:42.040 We've got our panel here, Sarah Fryar, who leads our 0:01:42.080 --> 0:01:46.440 big tech team here at Bloomberg News. Hello Sarah, Happy New. 0:01:46.400 --> 0:01:47.680 Year, Happy New Year. 0:01:48.120 --> 0:01:51.840 And Dana Hull, the world's most diligent Tesla reporter. Happy 0:01:51.840 --> 0:01:56.320 New Year to you, Dana, twenty twenty four, LFG Okay. 0:01:56.800 --> 0:02:00.800 So Elon Musk has over the last few years, I think, 0:02:00.960 --> 0:02:03.960 Dana correct me if I'm wrong, bragged that he's spent 0:02:04.040 --> 0:02:06.560 the new year delivering cars that he's been, you know, 0:02:06.880 --> 0:02:09.560 in the factory, you know, trying to put the last 0:02:09.760 --> 0:02:12.200 bow on in another year for Tesla. Do we have 0:02:12.200 --> 0:02:15.240 any sense of whether that's what he did over this holiday? 0:02:16.240 --> 0:02:18.280 So it's not that I'm on the phone with Elon, 0:02:18.360 --> 0:02:19.840 but my sense is that he spent part of the 0:02:19.840 --> 0:02:22.480 holidays in Puerto Rico or at least his his jet 0:02:22.560 --> 0:02:25.079 was in Puerto Rico, And yeah, I did not get 0:02:25.080 --> 0:02:28.160 the sense that he was in Fremont or in Austin, 0:02:28.840 --> 0:02:31.320 like helping out the delivery guys, which you know he 0:02:31.360 --> 0:02:33.320 has done in years past. But yeah, no, I mean 0:02:33.360 --> 0:02:34.560 I think I think he was out of town. 0:02:35.080 --> 0:02:36.560 What do you make of the numbers? So four hundred 0:02:36.560 --> 0:02:38.919 and eighty five thousand vehicles for the last three months 0:02:38.960 --> 0:02:41.560 of twenty twenty three, one point eight million cars for 0:02:41.600 --> 0:02:44.800 the year. I mean, it sounds it sounds like a lot. 0:02:44.919 --> 0:02:47.800 I mean in historic terms. On the other hand, you know, 0:02:47.880 --> 0:02:49.120 not as high as some other companies. 0:02:49.600 --> 0:02:51.400 Yeah, So the big news out of the numbers for 0:02:51.440 --> 0:02:53.760 me was they didn't break out how many cyber trucks 0:02:53.760 --> 0:02:56.240 they delivered, which is pretty funny given that this is 0:02:56.240 --> 0:03:00.919 their brand new vehicle. So they delivered, you know, four hundred, 0:03:00.160 --> 0:03:04.160 five hundred and seven vehicles. They broke out the three 0:03:04.200 --> 0:03:07.160 and the Y, and then they had other models which 0:03:07.200 --> 0:03:10.000 includes the S, the X, and the cyber trucks. So 0:03:10.040 --> 0:03:12.360 we have no idea how many cyber trucks have actually 0:03:12.360 --> 0:03:14.560 been handed over to customers, and it just is weird 0:03:14.560 --> 0:03:15.800 that they didn't break that out. 0:03:16.000 --> 0:03:18.000 So it has to be intentional, right. 0:03:17.919 --> 0:03:21.520 Right, it's a lousy number, so they didn't broadcast it. 0:03:21.560 --> 0:03:24.680 If it was a positive number, they would have absolutely said, oh, 0:03:24.720 --> 0:03:26.760 we you know, we did a thousand or something like that. 0:03:26.840 --> 0:03:31.480 So they're basically obfuscating how many cyber trucks they've actually made. 0:03:31.720 --> 0:03:33.560 And then the big thing. 0:03:33.440 --> 0:03:36.720 Is that they've lost their like EV crown to BYD, 0:03:36.920 --> 0:03:40.160 which is the Warren Buffett backed Chinese company that also 0:03:40.200 --> 0:03:42.200 makes evs, And you know, Musk has said over and 0:03:42.200 --> 0:03:44.400 over again that their biggest competition is in China. But 0:03:44.440 --> 0:03:47.280 this is the first quarter that we've actually seen BYD 0:03:47.440 --> 0:03:50.280 kind of like come ahead now in terms of full 0:03:50.440 --> 0:03:53.800 EV deliveries ahead of Tesla. But the stock reaction today 0:03:53.880 --> 0:03:56.320 is kind of mixed. I think it's like the delivery 0:03:56.360 --> 0:03:58.680 numbers were in line with what Wall Street was expecting, 0:03:58.760 --> 0:04:00.480 but nothing earth shattering. 0:04:01.520 --> 0:04:04.120 So, Sarah, I mean you sort of hinted at this. 0:04:04.240 --> 0:04:07.120 On December twenty ninth, Musk wrote, I stand by my 0:04:07.160 --> 0:04:10.000 prediction that if Tesla executes extremely well over the next 0:04:10.000 --> 0:04:13.160 five years, that the long term value could exceed Apple 0:04:13.240 --> 0:04:14.920 and a Ramco combine. That I mean is that the 0:04:14.960 --> 0:04:16.920 spin that we're going to see like this is just 0:04:17.000 --> 0:04:19.240 you know what, strength on strength. He's just gonna play 0:04:19.279 --> 0:04:20.600 this as a as a huge victory. 0:04:21.320 --> 0:04:24.120 I mean, I think that the game of talking about 0:04:24.160 --> 0:04:27.839 these things is to surprise and delight, right, So you 0:04:27.880 --> 0:04:31.200 want to start with like, you know, this grand vision, 0:04:31.279 --> 0:04:35.280 and I think that's the thing that Musk always excels at. 0:04:35.360 --> 0:04:38.120 He makes people believe that the future is going to 0:04:38.200 --> 0:04:43.960 be like way crazier and unimaginably amazing compared to today. And 0:04:44.000 --> 0:04:46.920 then you know, the details are kind of like they 0:04:46.920 --> 0:04:50.359 should probably exceed expectations, but in the case of Tesla, 0:04:50.400 --> 0:04:53.800 they haven't always except for you know, when it comes 0:04:53.839 --> 0:04:58.960 to the actual uptake of evs or EV's, I think 0:04:59.240 --> 0:05:02.719 for Tesla have a little bit of a better chance 0:05:02.800 --> 0:05:06.039 because the charging network for everyone else is kind of crumbling, 0:05:06.120 --> 0:05:09.680 So you know, that's one way you might bet on them. 0:05:09.680 --> 0:05:12.000 But I think when it comes to talking about the numbers, 0:05:12.160 --> 0:05:15.480 the best case scenario is to just say the future 0:05:15.560 --> 0:05:17.760 is going to be so much better than you can 0:05:17.800 --> 0:05:20.360 even imagine and not focus on what's right now. 0:05:20.800 --> 0:05:23.040 And I guess that's what he's saying. Dan, you brought 0:05:23.080 --> 0:05:26.760 up byd refresh our memories, Like what is BYD and 0:05:26.800 --> 0:05:29.200 to what extent is it fair to compare them to Tesla? 0:05:29.480 --> 0:05:32.000 How similar or different are they from Tesla? 0:05:32.640 --> 0:05:34.960 I mean it's a Chinese electric car company and a 0:05:35.000 --> 0:05:37.160 battery company. And I think that like what most people 0:05:37.200 --> 0:05:39.760 are realizing is that when you look at the EV market, 0:05:39.800 --> 0:05:43.039 there's kind of two clear leaders BYD and Tesla, which 0:05:43.040 --> 0:05:47.479 are vertically integrated companies that make the cars, basically make 0:05:47.480 --> 0:05:50.919 the batteries, know a lot about like powertrain and engineering 0:05:50.960 --> 0:05:53.479 and battery sale development. And then there's like everybody else, 0:05:53.480 --> 0:05:55.920 which is the legacy OEMs that are trying to pivot 0:05:55.960 --> 0:05:59.279 to evs but don't have that kind of in house expertise. 0:05:59.360 --> 0:06:01.880 And so, like one of the big narratives in twenty 0:06:01.880 --> 0:06:04.919 twenty three was like slowing EV growth that like the 0:06:04.960 --> 0:06:08.120 EV market is still growing, but it's like slower than usual, 0:06:08.800 --> 0:06:10.840 and you saw like Ford and GM and all these 0:06:10.880 --> 0:06:13.680 other players kind of like pull back on their expectations. 0:06:13.720 --> 0:06:17.479 But like BYD and and Tesla are totally leading the 0:06:17.480 --> 0:06:20.320 world in volume, and Tesla deliveries year over year it 0:06:20.360 --> 0:06:23.440 was thirty eight percent growth. I mean that's that's still 0:06:23.480 --> 0:06:26.520 like significant growth. I mean, Tesla's growth is not like 0:06:26.560 --> 0:06:29.400 the runaway fifty percent growth that they have had some years, 0:06:29.440 --> 0:06:31.960 but it's still it's still growing. And yeah, I mean 0:06:31.960 --> 0:06:34.240 I think BYD does not really sell cars in the 0:06:34.279 --> 0:06:36.240 United States. So that's why, like a lot of people 0:06:36.440 --> 0:06:38.720 like are like what the hell is BYD because you 0:06:38.720 --> 0:06:41.160 don't see like a BYD car on the freeway. 0:06:41.480 --> 0:06:43.440 But they are a massive player. 0:06:44.279 --> 0:06:46.400 Yeah, and China is a massive market, a massive market 0:06:46.400 --> 0:06:50.280 that of course Tesla has wanted to participate in. I mean, 0:06:50.320 --> 0:06:52.960 does this, I mean, does this bode ill at least 0:06:52.960 --> 0:06:56.599 for Tesla's sort of like big hope for growth in China. 0:06:57.480 --> 0:06:59.480 I think it's going to be very interesting to see 0:06:59.520 --> 0:07:02.239 in the coming year how Tesla reacts to be widdy 0:07:02.480 --> 0:07:04.760 in China. They've done a lot to kind of cut 0:07:04.800 --> 0:07:07.839 prices in China. They do a lot of marketing in China. 0:07:07.880 --> 0:07:10.160 You know, Tesla owes a lot to China. I mean, 0:07:10.200 --> 0:07:13.160 the Chinese government really supported the building of that factory 0:07:13.200 --> 0:07:16.640 in Shanghai. And after the United States, China is far 0:07:16.680 --> 0:07:19.160 and away Tesla's largest market. So I think just like 0:07:19.320 --> 0:07:21.880 keeping an eye on price cuts and in the ways 0:07:21.920 --> 0:07:24.840 that Tesla tries to pull demand levers in China's going 0:07:24.880 --> 0:07:25.640 to be really interesting. 0:07:26.200 --> 0:07:29.440 Sarah, do you think that Elon Musk's sort of seeding 0:07:29.480 --> 0:07:32.280 the crown, the electric vehicle crown to another company is significant? 0:07:32.320 --> 0:07:34.600 I mean, how much of his mythology is kind of 0:07:34.640 --> 0:07:36.920 baked into like being the market leader. Do you think this, 0:07:37.280 --> 0:07:39.840 you know, ultimately becomes no big deal. 0:07:40.080 --> 0:07:42.480 I think if if I'm Elon Musk, I'm taking credit 0:07:42.520 --> 0:07:45.640 for it, right, it's like a victory because he started 0:07:45.680 --> 0:07:50.240 the evy revolution of the modern era, and so other 0:07:50.320 --> 0:07:53.400 companies succeeding in it. It's like a reflection of his 0:07:53.520 --> 0:07:56.800 own influence on the market, or at least that's how 0:07:57.040 --> 0:08:01.160 I'd see if I were being optimistic. But I think that, 0:08:01.520 --> 0:08:03.240 you know, in the past, we've heard him say, like 0:08:04.080 --> 0:08:06.880 take credit for the whole ev revolution, which is why 0:08:06.880 --> 0:08:10.520 we've talked about how he felt so snubbed when Biden 0:08:10.680 --> 0:08:13.520 didn't so much as mentioned Tesla when he talked about 0:08:13.600 --> 0:08:16.080 the proliferation of EV's in the US. 0:08:16.600 --> 0:08:18.880 Dana, you talked about the cyber truck briefly, you know. 0:08:19.040 --> 0:08:21.520 I read your article on Bloomberg dot Com about sort 0:08:21.520 --> 0:08:23.960 of different guesses as to how many cyber trucks were sold. 0:08:24.000 --> 0:08:26.880 I think the analyst estimates range from anywhere from what 0:08:27.000 --> 0:08:30.320 several hundred to several thousand. We know that there was 0:08:30.400 --> 0:08:32.920 at least one cyber truck out there because there was 0:08:32.920 --> 0:08:36.760 a crash reported over the weekend involving a Toyota Corolla 0:08:36.880 --> 0:08:39.320 did not end super well for the Corolla, although there 0:08:39.320 --> 0:08:42.840 are no injuries. I mean, just just from sort of 0:08:42.880 --> 0:08:46.800 social media and scattered reports from Tesla dealerships, do we 0:08:46.840 --> 0:08:50.160 have any sense of how many cyber trucks are on 0:08:50.200 --> 0:08:52.960 the road or how this whole process is going that 0:08:52.960 --> 0:08:55.080 we've been talking about for the last few months. 0:08:55.160 --> 0:08:56.960 I think Elon tweeted over the weekend that there are 0:08:57.000 --> 0:08:59.080 a couple hundred out there now and a lot of 0:08:59.080 --> 0:09:02.160 them are in so a couple of hundred on the roads, 0:09:02.200 --> 0:09:04.520 I guess in the hands of customers. You know, there 0:09:04.559 --> 0:09:07.520 are cyber trucks in showrooms. You know, it's a big 0:09:07.559 --> 0:09:09.440 marketing thing for Tesla. They want people to come to 0:09:09.440 --> 0:09:11.520 the showroom to see the cyber truck and then hopefully 0:09:11.520 --> 0:09:13.000 like sit in a model why and then buy a 0:09:13.040 --> 0:09:16.000 model why. I mean I saw one in real life. 0:09:16.040 --> 0:09:18.400 I was walking to Trader Joe's and like one drove by, 0:09:18.440 --> 0:09:19.920 and I was like, oh, there's a cyber. 0:09:19.679 --> 0:09:22.280 Truck, so an actual moving one, an actual moving one. 0:09:22.720 --> 0:09:25.679 You know, they largely seem to be like on the 0:09:25.800 --> 0:09:29.040 road in Texas and in California. I think that's where 0:09:29.040 --> 0:09:31.560 the first deliveries are probably going to. But you know, 0:09:31.600 --> 0:09:33.559 they've warned that it's going to be a very slow ram. 0:09:33.720 --> 0:09:35.400 I just think the fact that they didn't break out 0:09:35.760 --> 0:09:38.880 how many of the delivered in today's quarterly sales report 0:09:38.960 --> 0:09:41.240 is just really telling, like it's not a lot. The 0:09:41.320 --> 0:09:44.840 crash that you mentioned was kind of classic in that, like, 0:09:45.400 --> 0:09:48.280 you know, we don't really I mean, most journalists don't 0:09:48.280 --> 0:09:50.960 write about car crashes unless it's a Tesla, and that's 0:09:50.960 --> 0:09:52.880 been like a beef that Tesla has had for quite 0:09:52.880 --> 0:09:55.520 some time. Like God, you know, like there are thousands 0:09:55.559 --> 0:09:58.360 of car crashes across the country every day and like 0:09:58.440 --> 0:10:01.000 none of them make headlines unless it's Tesla. In this case, 0:10:01.040 --> 0:10:03.840 I think the Corolla across the median and like ran 0:10:03.880 --> 0:10:06.960 into the cyber truck, and there's no evidence that the 0:10:07.000 --> 0:10:09.080 cyber truck caused this crash. 0:10:09.120 --> 0:10:11.560 And crucially, I think you know, the Corolla driver's okay, 0:10:11.720 --> 0:10:15.040 which obviously there are people warning and probably validly warning 0:10:15.040 --> 0:10:17.439 about the size of this thing and the potential danger 0:10:17.480 --> 0:10:19.719 composed to sedans, although in this case it seems like 0:10:19.840 --> 0:10:22.839 luckily everybody was okay. I mean, for me, the big 0:10:22.880 --> 0:10:26.280 thing with the cyber truck is that this, you know, 0:10:26.320 --> 0:10:30.760 it's this kind of boundary breaking vehicle. It's totally different, 0:10:30.760 --> 0:10:33.160 it's totally sci fi and because of the way it's 0:10:33.240 --> 0:10:35.760 rolling out, there's a bit of a letdown here, and 0:10:36.000 --> 0:10:37.800 we see it in these numbers, you know, we see 0:10:37.840 --> 0:10:40.640 it over the last few weeks where Elon Musk did 0:10:40.679 --> 0:10:43.080 this amazing thing. He introduced this like back to the 0:10:43.120 --> 0:10:46.679 future car and it's kind of like, you know, not 0:10:46.760 --> 0:10:49.400 a whole lot of excitement, partly because they haven't managed 0:10:49.400 --> 0:10:50.960 to get these on the road. 0:10:51.600 --> 0:10:53.680 All the ones I've seen in San Francisco have been 0:10:54.280 --> 0:10:58.960 prototypes that actual employees are testing or driving. Yeah, they 0:10:58.960 --> 0:11:00.959 say RC and the side release candidate. 0:11:01.360 --> 0:11:03.280 Does that make you the coolest person in San Francisco 0:11:03.440 --> 0:11:06.280 or the least cool person in San Francisco, Sarah? 0:11:06.520 --> 0:11:10.040 That I've seen them, they're just surrounding by. 0:11:10.040 --> 0:11:12.839 You Ris here. All right. So last thing I want 0:11:12.840 --> 0:11:15.400 to do before we move on is just is Dan, 0:11:15.440 --> 0:11:17.959 I just get a sense from you over what this 0:11:18.080 --> 0:11:20.520 means for the for Tesla going forward. So we're going 0:11:20.600 --> 0:11:22.360 to see an earnings report at the end of the 0:11:22.640 --> 0:11:24.400 at the end of the month. What are you thinking 0:11:24.440 --> 0:11:26.840 about there? What are you thinking about kind of looking 0:11:26.880 --> 0:11:29.599 ahead for Elon Musk's car company. 0:11:29.800 --> 0:11:32.160 Yeah, So the big question I think on everybody's mind 0:11:32.240 --> 0:11:34.680 is what guidance does Tesla give for twenty twenty four 0:11:34.679 --> 0:11:36.720 in terms of how many vehicles are they going to deliver? 0:11:37.000 --> 0:11:39.319 You know, they set a target of one point eight 0:11:39.360 --> 0:11:42.480 million for twenty twenty three. They met that target, but 0:11:42.559 --> 0:11:43.719 what is it for twenty twenty four? 0:11:43.840 --> 0:11:44.360 Is it like. 0:11:44.400 --> 0:11:46.600 Barely any growth? Is it going to be like two million, 0:11:46.679 --> 0:11:48.120 Is it going to be two point five? Is it 0:11:48.160 --> 0:11:50.840 going to be three? I mean, Elon is always about growth, 0:11:50.840 --> 0:11:52.600 and they don't really have They have like a pretty 0:11:52.640 --> 0:11:55.360 stale lineup right now, and the cyber truck is not 0:11:55.520 --> 0:11:57.480 out in high volumes. So how are they going to 0:11:57.600 --> 0:12:01.400 grow given that, like their best seller. 0:12:01.160 --> 0:12:02.959 The Model Why, is four years old. 0:12:03.000 --> 0:12:05.800 I mean, I'm sure that they'll like refresh it, they'll 0:12:05.840 --> 0:12:08.560 probably enter some new markets, but they don't have anything 0:12:08.600 --> 0:12:11.760 fancy and snazzy, and the cyber truck is going to 0:12:11.800 --> 0:12:14.240 be very slow going, So just the whole question of 0:12:14.280 --> 0:12:17.040 their guidance is the big one for investors. And then 0:12:17.080 --> 0:12:19.600 how do these price cuts that they've had all year 0:12:19.800 --> 0:12:22.640 impact the margins and it? You know, in twenty twenty three, 0:12:22.760 --> 0:12:25.360 Elon Musk made this very shrewd decision that they were 0:12:25.400 --> 0:12:29.520 going to chase volume over margins to kind of protect 0:12:29.520 --> 0:12:31.840 their market share, and that gambit basically worked. I mean, 0:12:32.040 --> 0:12:35.960 they cut prices, they moved metal, but how far how 0:12:36.000 --> 0:12:36.960 low are they willing to go? 0:12:37.000 --> 0:12:37.839 I mean, are they going to. 0:12:37.760 --> 0:12:40.520 Continue to cut prices or have we reached kind of 0:12:40.520 --> 0:12:43.720 like a steady state. And then do they start advertising, 0:12:43.760 --> 0:12:45.480 Like what are they going to do to actually get 0:12:45.600 --> 0:12:48.800 new people into these cars? People who are not like 0:12:48.840 --> 0:12:52.920 your generic like sort of early adopter, tech savvy, you know, 0:12:53.040 --> 0:12:57.160 environmental climate change caring person Like the wave of people 0:12:57.200 --> 0:13:00.240 who wanted to buy an EV basically already have out. 0:13:00.240 --> 0:13:03.520 It's this like real effort to kind of convince Middle 0:13:03.559 --> 0:13:06.840 America to consider an EV and that's something that Tesla 0:13:06.840 --> 0:13:07.560 hasn't really had. 0:13:07.480 --> 0:13:09.240 To do before. Well, we know they're going to advertise 0:13:09.280 --> 0:13:12.480 on X yeah, which really needs it, right, Yeah. 0:13:12.360 --> 0:13:14.640 I wonder how much they'll spend with what the spend 0:13:14.679 --> 0:13:15.040 will be. 0:13:19.360 --> 0:13:22.640 All right, well, let's talk about X then, because you know, 0:13:22.679 --> 0:13:25.640 on the last day of twenty twenty three, Axios reported 0:13:25.640 --> 0:13:27.720 that Fidelity, as I said at the top of the show, 0:13:27.760 --> 0:13:32.560 the big asset manager, cut its valuation of the company, uh, 0:13:33.040 --> 0:13:36.679 making it seventy one point five percent less valuable than 0:13:36.720 --> 0:13:38.680 it was at the time that Elon Musk purchased it 0:13:38.720 --> 0:13:41.160 for forty four billion. I think that implies a valuation 0:13:41.240 --> 0:13:45.559 about just over twelve billion. This disclosure includes a nearly 0:13:45.559 --> 0:13:49.880 eleven percent drop in November. Sarah, I found myself kind 0:13:49.920 --> 0:13:52.640 of a nerd to this kind of report just because 0:13:52.640 --> 0:13:55.719 it's like, oh, yeah, you know this platform that's been 0:13:55.800 --> 0:13:58.520 gasping for air for months that Elon Musk has been 0:13:58.720 --> 0:14:03.679 you know, insulting you know, advertisers. It's almost like, yeah, no, crap, 0:14:03.720 --> 0:14:06.960 it's lost a lot of money. What does this report mean? 0:14:07.760 --> 0:14:11.479 I think that there is some real significance here because 0:14:12.440 --> 0:14:17.600 we don't have any insight right now into how X 0:14:17.800 --> 0:14:22.440 is valuing itself, how they are telling bankers they're doing, 0:14:22.880 --> 0:14:25.800 and investors what kind of information those people are getting, 0:14:26.200 --> 0:14:29.480 and so the Fidelity numbers, although you know it's not 0:14:29.560 --> 0:14:31.840 perfect we don't know how many shares they hold, we 0:14:31.880 --> 0:14:36.720 don't know what kind of information they get from from X. 0:14:37.160 --> 0:14:41.680 It is at least like a rare public disclosure of 0:14:41.720 --> 0:14:43.720 something about this company. 0:14:43.800 --> 0:14:46.120 Yeah, and I guess it's also a counterpoint. You know. 0:14:46.760 --> 0:14:49.880 Unfortunately for me, I listened to the Kathy Wood Elon 0:14:49.960 --> 0:14:54.680 Musk Twitter spaces Kathy would investor in X, and you know, 0:14:55.600 --> 0:14:57.800 sort of spent most of the time talking her book 0:14:58.040 --> 0:15:01.320 and was sort of keeping praise on the on Elon 0:15:01.400 --> 0:15:04.400 Musk's campaign to take on the woke mind virus, as 0:15:04.440 --> 0:15:06.120 she sees it. And so of course this is a 0:15:06.160 --> 0:15:09.320 counterpoint and maybe like a douse of cold water or 0:15:09.320 --> 0:15:12.720 something on the kind of universe of boosters who've been 0:15:12.800 --> 0:15:13.840 kind of promoting this thing. 0:15:14.120 --> 0:15:16.400 I think it's also just interesting because it really kind 0:15:16.400 --> 0:15:20.320 of punctuates this myth of Elon as being this financial genius, right, 0:15:20.400 --> 0:15:23.160 like he has done all these incredible things. SpaceX is 0:15:23.160 --> 0:15:26.480 the most valuable private company in the US. Tesla is 0:15:26.520 --> 0:15:29.720 like the eighth or ninth largest company in the world. 0:15:29.840 --> 0:15:33.120 He like really shrewdly raised capital at a time when 0:15:33.160 --> 0:15:35.600 interest rates were low, and then like X is like 0:15:35.640 --> 0:15:37.760 the big time that he really missed time in the market, 0:15:37.800 --> 0:15:41.040 he overpaid, He spent forty four billion dollars on this 0:15:41.120 --> 0:15:44.680 thing right before the market started to createor and he 0:15:44.720 --> 0:15:46.440 has not been able to turn it around. And like 0:15:46.520 --> 0:15:48.400 for him to sort of be the owner of a 0:15:48.440 --> 0:15:51.040 company that is now worth far less than what he 0:15:51.080 --> 0:15:53.480 paid for it, and then he's got all this debt. 0:15:53.320 --> 0:15:56.120 That he has to service. And also I think what's 0:15:56.240 --> 0:16:00.200 important here is this number is not about Elon. I 0:16:00.200 --> 0:16:03.640 mean a lot of the other rhetoric about X, the 0:16:03.680 --> 0:16:06.520 other decisions we've seen people make have been about his 0:16:06.680 --> 0:16:10.600 behavior directly, you know, advertisers pulling money. Elon Musk calls 0:16:10.640 --> 0:16:15.080 them haters, says, go f yourself. Like he he really 0:16:15.120 --> 0:16:19.880 feels like every time somebody takes money away from X, 0:16:19.920 --> 0:16:24.200 that's you know, a personal slight against him and the 0:16:24.240 --> 0:16:28.960 company and the future. This you know, consciousness of humanity 0:16:29.040 --> 0:16:32.240 or what have you. This is about Fidelity telling its 0:16:32.280 --> 0:16:35.880 investors here's what we have and what it's worth based 0:16:35.920 --> 0:16:38.240 on our best guesses, based on all the numbers we 0:16:38.360 --> 0:16:41.600 have all you know, whether it's a third party valuation 0:16:41.920 --> 0:16:45.440 or you know, market comps or what have you. This 0:16:45.560 --> 0:16:48.520 is Fidelity, you know, not making it about Elon just 0:16:48.600 --> 0:16:51.520 kind of giving an update to their portfolio. 0:16:51.720 --> 0:16:54.680 Do we have any sense actually what goes into this 0:16:54.680 --> 0:16:57.320 this sort of valuation, or like what they're even going on. 0:16:57.480 --> 0:16:59.560 I mean, that's that's the hard part. It's all behind 0:16:59.560 --> 0:17:02.480 the scenes that we know that X has given its 0:17:03.120 --> 0:17:06.840 largest holders some information about the progress of the business. 0:17:07.200 --> 0:17:11.760 Bloomberg reported that the company's ad sales were projected to 0:17:11.960 --> 0:17:16.080 slump this year to about two point five billion. That 0:17:16.280 --> 0:17:20.720 is a dramatic slump from from last year. So there's 0:17:20.760 --> 0:17:23.359 some real, you know, money at play here. I should 0:17:23.359 --> 0:17:27.919 note that this change in valuation happened almost right after 0:17:28.560 --> 0:17:32.280 the Musk comments to advertisers at the deal Book conference. 0:17:32.359 --> 0:17:35.960 This is a November thirtieth update, so it could have 0:17:36.040 --> 0:17:38.320 even you know, they're going to have to reevaluate it. 0:17:38.840 --> 0:17:41.479 And does this have any impact on the you know, 0:17:41.520 --> 0:17:43.359 the debt payments that Elon Musk give, you know, the 0:17:43.560 --> 0:17:47.280 efforts to renegotiate debt, like the like what Sarah looking ahead, 0:17:47.680 --> 0:17:50.880 where is X financially and like, does does Elon Musk 0:17:50.920 --> 0:17:53.119 have you know, have any hope of of sort of 0:17:53.359 --> 0:17:54.520 quickly turning things around? 0:17:55.040 --> 0:17:57.240 Well quickly is going to be tough, but you know, 0:17:57.600 --> 0:18:01.280 all of the banks have the debt on hand on 0:18:01.320 --> 0:18:04.600 their balance sheets. Obviously it's been uncomfortable for them. They 0:18:04.600 --> 0:18:07.560 can't sell it. They've tried, and they have this agreement 0:18:07.600 --> 0:18:10.479 amongst themselves that if they sell it, you know, everyone 0:18:10.520 --> 0:18:12.880 gets to sell it at the same price. So it's 0:18:12.880 --> 0:18:15.520 not like, you know, Morgan Stanley can just sell it 0:18:15.560 --> 0:18:18.639 at twenty cents on the dollar and get rid of it. 0:18:19.160 --> 0:18:23.120 If they sell it at that amount, everyone is allowed 0:18:23.160 --> 0:18:26.360 to sell whatever portion they have. That's so they don't 0:18:26.440 --> 0:18:30.560 end up undercutting each other on offloading this debt. Eventually, 0:18:31.000 --> 0:18:32.960 so a few things could happen. I mean, there could 0:18:33.000 --> 0:18:38.200 be restructuring of X. If it gets really bad, they 0:18:38.200 --> 0:18:41.800 could go into some as Musk has hinted at. I 0:18:41.840 --> 0:18:48.080 don't think that they will because if that happens, then 0:18:48.240 --> 0:18:53.280 all the equity would just become zero. And I don't 0:18:53.320 --> 0:18:55.640 think that Musk would want to do that to all 0:18:55.720 --> 0:19:01.120 his close friends and investors that put money into this company. 0:19:01.160 --> 0:19:04.840 And he's actually said like, I don't I don't plan 0:19:04.960 --> 0:19:08.800 to start losing money for people now. So I think 0:19:08.800 --> 0:19:10.360 he's going to try to find a way to turn 0:19:10.400 --> 0:19:13.359 it around. My best guess is that he's going to 0:19:13.560 --> 0:19:18.520 use the Grock AI as like a launch point for 0:19:18.600 --> 0:19:23.240 trying to make X about more than just a social 0:19:23.280 --> 0:19:27.040 network and ride the AI hypewave. That's one way that 0:19:27.040 --> 0:19:30.040 could happen. But then, you know, everyone has a chatbot now, 0:19:30.080 --> 0:19:31.159 so how special is that? 0:19:31.840 --> 0:19:38.080 I guess we'll see, all right, Before we get to 0:19:38.119 --> 0:19:40.480 any you know, full fully fledged predictions, I want to 0:19:40.520 --> 0:19:43.159 ask one more question to Dana, which is, you know, 0:19:43.320 --> 0:19:45.800 we've been talking I feel like for a year, over 0:19:45.840 --> 0:19:47.440 a year really over. 0:19:47.560 --> 0:19:50.960 The sort of behavior on X potentially spilling over to Tesla. 0:19:51.040 --> 0:19:54.560 You know, we got these new numbers basically meeting expectations. 0:19:54.640 --> 0:19:57.679 Why hasn't what's happening on X seemed to have an 0:19:57.720 --> 0:20:00.399 impact on Tesla? And can we are we getting to 0:20:00.400 --> 0:20:02.080 the point where you can include maybe it won't like 0:20:02.160 --> 0:20:04.760 maybe maybe the attributes of the car, you know, exist 0:20:04.880 --> 0:20:05.440 on their own. 0:20:06.080 --> 0:20:07.760 Well, I mean, you and I have kind of wrote 0:20:07.760 --> 0:20:10.000 a story about this last year, right, Like, there's definitely 0:20:10.119 --> 0:20:13.320