1 00:00:02,480 --> 00:00:09,160 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:12,280 --> 00:00:15,240 Speaker 2: Well, Elon Musk is now the richest person on the planet. 3 00:00:15,520 --> 00:00:18,360 Speaker 3: More than half the satellites in space are owned and 4 00:00:18,480 --> 00:00:20,200 Speaker 3: controlled by one man. 5 00:00:20,800 --> 00:00:22,680 Speaker 1: Well, he's a legitimate super genius. 6 00:00:22,880 --> 00:00:23,799 Speaker 4: I mean legitimate. 7 00:00:24,000 --> 00:00:26,640 Speaker 5: He says he's always voted for Democrats, but this year 8 00:00:26,680 --> 00:00:27,440 Speaker 5: it will be different. 9 00:00:27,480 --> 00:00:28,440 Speaker 1: He'll vote Republican. 10 00:00:28,680 --> 00:00:31,200 Speaker 6: There is a reason the US government is so reliant 11 00:00:31,240 --> 00:00:31,600 Speaker 6: on him. 12 00:00:31,800 --> 00:00:34,839 Speaker 7: Alon Musk is a scam artist and he's done nothing. 13 00:00:36,000 --> 00:00:49,479 Speaker 3: Anything he does, he's fascinating people. Welcome to Eylan Ink, 14 00:00:49,520 --> 00:00:54,000 Speaker 3: Bloomberg's weekly podcast about Elon Musk. It's Tuesday, January twenty eighth. 15 00:00:54,080 --> 00:00:58,600 Speaker 3: I'm your host, David Papadopolis. It's Tesla Earnings Week, people, 16 00:00:58,680 --> 00:01:02,639 Speaker 3: which means, of course, earnings bingo. You know that, get 17 00:01:02,680 --> 00:01:05,880 Speaker 3: out your popcorn. But it'll also give us a fresh 18 00:01:05,920 --> 00:01:09,280 Speaker 3: window into the financials of a company that is absolutely 19 00:01:09,520 --> 00:01:12,959 Speaker 3: taken off in the stock market since Trump's selection. So 20 00:01:13,040 --> 00:01:15,360 Speaker 3: the question is are the fundamentals catching up to these 21 00:01:15,400 --> 00:01:18,399 Speaker 3: growing expectations of what Tesla can be in the Trump 22 00:01:18,480 --> 00:01:21,880 Speaker 3: era or are they falling further behind. We'll dive into 23 00:01:21,920 --> 00:01:25,800 Speaker 3: those numbers with our regulars here, Max Chafkin and Dana Hull. 24 00:01:25,920 --> 00:01:26,959 Speaker 3: Hello to you both. 25 00:01:27,200 --> 00:01:29,399 Speaker 2: Happy almost earnings day, David, and. 26 00:01:29,400 --> 00:01:32,639 Speaker 3: Happy earnings day to you Max. Dana, Hello, Hello, Hello, 27 00:01:33,360 --> 00:01:36,959 Speaker 3: and we have our global autos are beaming in from London. 28 00:01:37,000 --> 00:01:38,760 Speaker 3: Craig Trudell. Craig, Hello, sir. 29 00:01:38,800 --> 00:01:39,560 Speaker 7: Thanks for having me. 30 00:01:39,959 --> 00:01:41,959 Speaker 3: Then we're going to talk about Muskin is Wall Street 31 00:01:42,000 --> 00:01:46,480 Speaker 3: bankers who suddenly and finally see an opportunity to unload 32 00:01:46,520 --> 00:01:49,360 Speaker 3: the thirteen billion dollars of loans they doled out the 33 00:01:49,400 --> 00:01:53,960 Speaker 3: finance's purchase of Twitter. After two years, the stars seem 34 00:01:54,080 --> 00:01:56,240 Speaker 3: a ligne to make a sale happen, unless that is 35 00:01:56,760 --> 00:01:59,680 Speaker 3: the out of the blue emergence of deep seek scuttles 36 00:01:59,680 --> 00:02:02,120 Speaker 3: the whole thing. We'll talk about all that with one 37 00:02:02,120 --> 00:02:06,040 Speaker 3: of our top Wall Street reporters, Shredar Naderjan Okay, Dan, 38 00:02:06,480 --> 00:02:10,639 Speaker 3: I start with you, though tomorrow is Tesla earnings Day. 39 00:02:11,040 --> 00:02:14,080 Speaker 3: Remind us what we know so far in terms of 40 00:02:14,080 --> 00:02:17,360 Speaker 3: how the fourth quarter went for Tesla and what you're 41 00:02:17,400 --> 00:02:20,600 Speaker 3: going to be looking for the most in the numbers 42 00:02:20,600 --> 00:02:22,880 Speaker 3: that come out and in the conference call that follows 43 00:02:22,919 --> 00:02:23,359 Speaker 3: the release. 44 00:02:23,680 --> 00:02:26,720 Speaker 1: So Tesla earnings, we know how many cars the company 45 00:02:26,760 --> 00:02:29,120 Speaker 1: delivered in the fourth quarter. We know that for the year, 46 00:02:29,320 --> 00:02:32,280 Speaker 1: sales were down roughly one percent, and so the big 47 00:02:32,280 --> 00:02:35,160 Speaker 1: thing for earnings is the growth outlook, And you know, 48 00:02:35,200 --> 00:02:37,160 Speaker 1: Elon Musk is going to do whatever he can to 49 00:02:37,240 --> 00:02:39,760 Speaker 1: kind of take control of the narrative and promise Wall 50 00:02:39,800 --> 00:02:42,720 Speaker 1: Street that everything is great, that they are making progress 51 00:02:42,760 --> 00:02:46,399 Speaker 1: with FSD, that the Model Y Refresh is happening, And 52 00:02:47,080 --> 00:02:49,080 Speaker 1: this is going to be the first call since Donald 53 00:02:49,080 --> 00:02:51,000 Speaker 1: Trump was elected, and so I expect there's going to 54 00:02:51,040 --> 00:02:55,280 Speaker 1: be a lot of questions about Doge, about tariffs, about 55 00:02:55,480 --> 00:02:57,840 Speaker 1: you know, is Tesla ever going to build a Mexico 56 00:02:57,880 --> 00:03:00,080 Speaker 1: plan or not, And so it's really more about the 57 00:03:00,080 --> 00:03:01,520 Speaker 1: call than the numbers itself. 58 00:03:02,440 --> 00:03:05,400 Speaker 3: Right by the way, just for the record, my bet 59 00:03:05,440 --> 00:03:08,600 Speaker 3: on the Mexico plant is we never see that, at 60 00:03:08,680 --> 00:03:12,120 Speaker 3: least not over the next four years. Craig Danna mentions 61 00:03:12,200 --> 00:03:15,720 Speaker 3: the Model Why Refresh, which reminds me, I don't know 62 00:03:15,760 --> 00:03:17,960 Speaker 3: that we've talked about it on this show. Tell us 63 00:03:18,000 --> 00:03:20,880 Speaker 3: a bit about it and how high expectations are for 64 00:03:20,960 --> 00:03:24,880 Speaker 3: it in terms of driving sales of Tesla's top model. 65 00:03:25,160 --> 00:03:27,440 Speaker 7: So I guess the first thing to start with is 66 00:03:27,520 --> 00:03:30,440 Speaker 7: the look of it on the exterior. It's got a 67 00:03:30,720 --> 00:03:33,760 Speaker 7: sort of cyber truck like face. It's got a light 68 00:03:33,800 --> 00:03:38,640 Speaker 7: bar running across the front, very similar to the cyber truck. Otherwise, 69 00:03:38,880 --> 00:03:41,040 Speaker 7: there's honestly not that much to say about it. I mean, 70 00:03:41,080 --> 00:03:43,280 Speaker 7: there's in the rear seat you now have a screen, 71 00:03:43,520 --> 00:03:45,680 Speaker 7: you know, along with the screen that you know, folks 72 00:03:45,720 --> 00:03:49,160 Speaker 7: are used to up in the front row. There's some 73 00:03:49,280 --> 00:03:52,839 Speaker 7: interior changes in terms of, you know, number of speakers. 74 00:03:53,000 --> 00:03:56,120 Speaker 7: They kept a turn signal stock which they took out 75 00:03:56,120 --> 00:03:59,400 Speaker 7: of the Model three when they refresh that, and Tesla 76 00:03:59,440 --> 00:04:03,480 Speaker 7: owners didn't particularly care for that, you know that. I mean, 77 00:04:03,480 --> 00:04:07,680 Speaker 7: that's the sort of level of of you know, lack 78 00:04:07,760 --> 00:04:09,560 Speaker 7: of newness that actually. 79 00:04:09,200 --> 00:04:11,840 Speaker 3: So it's it's pretty it's pretty minor stuff. So you 80 00:04:11,880 --> 00:04:14,760 Speaker 3: don't seem to expect necessarily that that refresh is going 81 00:04:14,800 --> 00:04:17,760 Speaker 3: to make an enormous difference. But tell us what you're 82 00:04:17,800 --> 00:04:20,800 Speaker 3: most looking for tomorrow in these numbers and in the 83 00:04:20,800 --> 00:04:21,640 Speaker 3: call that follows. 84 00:04:21,960 --> 00:04:23,960 Speaker 7: Yeah, I mean, I think I agree with Dana that 85 00:04:24,040 --> 00:04:26,240 Speaker 7: the outlook is going to be what's most important. But 86 00:04:26,279 --> 00:04:29,080 Speaker 7: I also think that it will be interesting to see, 87 00:04:29,240 --> 00:04:31,760 Speaker 7: you know, just how much of a of a you know, 88 00:04:31,839 --> 00:04:34,640 Speaker 7: hit they potentially took in the fourth quarter, they did 89 00:04:34,680 --> 00:04:38,120 Speaker 7: deliver more evs than in any quarter than they ever have, 90 00:04:38,360 --> 00:04:41,080 Speaker 7: but they really pulled out all the stops to get there. 91 00:04:41,279 --> 00:04:44,040 Speaker 7: So you know, they did you know, big discounts, they 92 00:04:44,080 --> 00:04:47,120 Speaker 7: had you know cut rate loan and lease offers, they 93 00:04:47,160 --> 00:04:50,640 Speaker 7: had you know, free charging deals, and so you know 94 00:04:50,720 --> 00:04:53,520 Speaker 7: how much did they sort of need to give away 95 00:04:53,680 --> 00:04:57,159 Speaker 7: in terms of you know, profitability to get a result 96 00:04:57,200 --> 00:04:59,880 Speaker 7: that honestly was a bit disappointing even for for Tesla. 97 00:05:00,080 --> 00:05:02,440 Speaker 7: Think they you know, guided to this idea that they 98 00:05:02,480 --> 00:05:04,840 Speaker 7: would be able to grow for the year, and as 99 00:05:04,920 --> 00:05:07,680 Speaker 7: Dana mentioned, they actually ended up even despite all of 100 00:05:07,720 --> 00:05:11,440 Speaker 7: those you know, promotions and efforts, actually having a down 101 00:05:11,520 --> 00:05:13,280 Speaker 7: year for the first time in more than a decade. 102 00:05:13,480 --> 00:05:15,160 Speaker 3: Craig, not to belabor the point, but just give us, 103 00:05:15,160 --> 00:05:19,039 Speaker 3: give our listeners a cent. So, when margins were at 104 00:05:19,080 --> 00:05:23,760 Speaker 3: their highest and just spectacular for Tesla, a standout in 105 00:05:23,760 --> 00:05:27,760 Speaker 3: the auto industry, what exactly were they and where are 106 00:05:27,800 --> 00:05:29,760 Speaker 3: they now? What do folks expect for the fourth quarter? 107 00:05:30,160 --> 00:05:33,320 Speaker 7: Yeah, I mean during the pandemic, I think we saw, 108 00:05:33,520 --> 00:05:37,080 Speaker 7: you know, across the industry this huge run up in margins, 109 00:05:37,120 --> 00:05:40,320 Speaker 7: and so you know, we saw for everybody you know, 110 00:05:40,800 --> 00:05:43,880 Speaker 7: a big you know bump in terms of you know, 111 00:05:43,920 --> 00:05:46,920 Speaker 7: they had plenty of demand but not enough supply. And 112 00:05:46,960 --> 00:05:49,960 Speaker 7: so for for Tesla, we were seeing you know, more 113 00:05:49,960 --> 00:05:52,800 Speaker 7: than twenty percent margins on a quarterly basis of you 114 00:05:52,800 --> 00:05:55,599 Speaker 7: know for some time, and that was as sort of 115 00:05:55,720 --> 00:05:58,200 Speaker 7: as good as it gets aside from you know, a 116 00:05:58,200 --> 00:06:01,440 Speaker 7: brand like a Ferrari, right, and so we've seen now 117 00:06:01,480 --> 00:06:05,599 Speaker 7: that come back down into you know, into the double 118 00:06:05,640 --> 00:06:09,840 Speaker 7: digits still, but in terms of having profit margins more 119 00:06:10,440 --> 00:06:13,360 Speaker 7: in line with what you would expect to see from 120 00:06:13,440 --> 00:06:16,719 Speaker 7: other carmakers you know, in the past, at that margin 121 00:06:16,800 --> 00:06:20,520 Speaker 7: used to be much better than their Detroit competitors. 122 00:06:19,960 --> 00:06:24,400 Speaker 3: You know, Max. This company is and I'm not saying 123 00:06:24,440 --> 00:06:26,680 Speaker 3: this just because we're doing this podcast, you know, but 124 00:06:26,720 --> 00:06:29,560 Speaker 3: it really is one of the most fascinating stocks out 125 00:06:29,560 --> 00:06:32,479 Speaker 3: there right now, and fascinating companies right now, because the 126 00:06:32,560 --> 00:06:37,280 Speaker 3: stock is still even after a recent selloff, up like crazy. 127 00:06:37,360 --> 00:06:40,359 Speaker 3: It's up more than fifty percent since Trump was elected. 128 00:06:40,760 --> 00:06:43,080 Speaker 3: But the sales numbers, as these guys are saying, are 129 00:06:43,160 --> 00:06:47,160 Speaker 3: just margins are shrinking. And there's this growing sense out 130 00:06:47,200 --> 00:06:50,360 Speaker 3: there that the more Elon gets involved in politics, the 131 00:06:50,400 --> 00:06:53,719 Speaker 3: more he's alienating a big chunk of his potential customers. So, 132 00:06:54,640 --> 00:06:58,200 Speaker 3: you know, unless this dream and this vision of the 133 00:06:58,320 --> 00:07:02,240 Speaker 3: robotaxi and the AI future comes to pass, I don't 134 00:07:02,279 --> 00:07:04,080 Speaker 3: know that the math gets tricky. 135 00:07:04,440 --> 00:07:06,599 Speaker 2: So like with Tesla, and I think this is true 136 00:07:06,640 --> 00:07:10,240 Speaker 2: about basically all of Musk's companies. You have kind of 137 00:07:10,240 --> 00:07:14,320 Speaker 2: like the business and the story and at times they've 138 00:07:14,320 --> 00:07:17,200 Speaker 2: been kind of pointing in the same direction, and at 139 00:07:17,200 --> 00:07:19,520 Speaker 2: times they've kind of diverged over the course of the 140 00:07:19,520 --> 00:07:22,080 Speaker 2: company's life. And you know, since we've been doing this 141 00:07:22,160 --> 00:07:25,440 Speaker 2: podcast for like two years, almost the business of Tesla 142 00:07:25,480 --> 00:07:26,640 Speaker 2: has been kind of the same. 143 00:07:26,760 --> 00:07:27,760 Speaker 3: You have an. 144 00:07:27,680 --> 00:07:31,119 Speaker 2: Aging product line that people are not that excited about. 145 00:07:31,240 --> 00:07:34,040 Speaker 2: Craig mentioned the refresh of the Model three, which I 146 00:07:34,040 --> 00:07:37,200 Speaker 2: don't know if we've actually ever mentioned that on this podcast. 147 00:07:37,480 --> 00:07:39,400 Speaker 2: Maybe we have and I've just forgotten it. But like, 148 00:07:39,480 --> 00:07:41,360 Speaker 2: they went and refreshed the Model three, and it doesn't 149 00:07:41,360 --> 00:07:43,720 Speaker 2: seem to have made a huge difference, or if it 150 00:07:43,760 --> 00:07:46,280 Speaker 2: did make a difference, it was you know, helping from 151 00:07:46,760 --> 00:07:49,520 Speaker 2: a place of weakness. The growth story that you're hitting 152 00:07:49,600 --> 00:07:53,880 Speaker 2: on the AI robotaxi. Somehow Trump's gonna do something amazing. 153 00:07:53,920 --> 00:07:56,400 Speaker 2: He's going to bring the good vibes back or whatever. 154 00:07:56,880 --> 00:07:58,800 Speaker 2: He has a lot of ways to go on the 155 00:07:58,880 --> 00:08:02,280 Speaker 2: Ernie's call to do that, and I think he will try. Right, 156 00:08:02,360 --> 00:08:06,080 Speaker 2: He's going to try to talk about robotaxis and the 157 00:08:06,120 --> 00:08:09,440 Speaker 2: potential for the regulatory environment to change. The problem is, 158 00:08:09,440 --> 00:08:12,760 Speaker 2: of course, you need an actual working robotaxi to be 159 00:08:12,800 --> 00:08:15,520 Speaker 2: able to take advantage of a favorable regulatory environment, which 160 00:08:15,560 --> 00:08:18,000 Speaker 2: is not clear they have. And then the other problem 161 00:08:18,120 --> 00:08:20,800 Speaker 2: is there are sort of headwinds or whatever you want 162 00:08:20,800 --> 00:08:22,200 Speaker 2: to call it, you know, sort of blowing in the 163 00:08:22,200 --> 00:08:25,240 Speaker 2: face of this story. One of them is that we've 164 00:08:25,280 --> 00:08:28,760 Speaker 2: seen a sudden kind of correction in AI, so like 165 00:08:29,000 --> 00:08:32,079 Speaker 2: we have investors reacting to the release of this Chinese 166 00:08:32,360 --> 00:08:35,880 Speaker 2: large language model Deep Seek and suddenly devaluing a bunch 167 00:08:35,880 --> 00:08:39,360 Speaker 2: of AI stocks. That potentially hurts, you know, the AI 168 00:08:39,480 --> 00:08:41,440 Speaker 2: story that Elon Musk is going to try to tell. 169 00:08:41,720 --> 00:08:44,240 Speaker 2: And the other thing is these regulatory credits, which has 170 00:08:44,240 --> 00:08:46,520 Speaker 2: been a big source of Tesla's profit, as well as 171 00:08:46,559 --> 00:08:49,199 Speaker 2: the tax subsidies. Trump in an executive order has basically 172 00:08:49,240 --> 00:08:50,840 Speaker 2: said he's gonna get He's gonna get rid of these 173 00:08:50,920 --> 00:08:53,679 Speaker 2: or at least begin considering getting rid of these which 174 00:08:53,920 --> 00:08:57,000 Speaker 2: arguably would hurt other EV companies more than it would 175 00:08:57,040 --> 00:08:59,120 Speaker 2: hurt Tesla, but it will also hurt Tesla. 176 00:09:00,440 --> 00:09:03,040 Speaker 3: I noticed that, I mean Tesla when the deep Seek 177 00:09:03,080 --> 00:09:06,559 Speaker 3: news came out yesterday and much of the tech complex 178 00:09:06,600 --> 00:09:09,800 Speaker 3: absolutely collapse. I mean in Nvidia, you know fell I 179 00:09:09,840 --> 00:09:13,560 Speaker 3: don't know fifteen percent or something like that. Tesla didn't 180 00:09:13,600 --> 00:09:18,000 Speaker 3: move that much. But it does strike me that if 181 00:09:18,360 --> 00:09:21,880 Speaker 3: Deep Seek was something of China spot Nick moment in 182 00:09:21,960 --> 00:09:26,560 Speaker 3: terms of AI, there could be a potential warning sign 183 00:09:26,640 --> 00:09:30,040 Speaker 3: there for Tesla and its plans going forward. 184 00:09:30,480 --> 00:09:32,960 Speaker 7: Yeah, I think that's right, and I do think that 185 00:09:33,400 --> 00:09:35,480 Speaker 7: Tesla did sort of take it on the chin. It 186 00:09:35,920 --> 00:09:38,800 Speaker 7: was certainly no Navidia in terms of how much of 187 00:09:38,920 --> 00:09:42,200 Speaker 7: a hit they took yesterday, But they too, you know, 188 00:09:42,280 --> 00:09:44,480 Speaker 7: did have a rough day in the market, along with 189 00:09:44,520 --> 00:09:47,200 Speaker 7: a lot of other companies. I do think that, you know, 190 00:09:47,240 --> 00:09:50,800 Speaker 7: to Max's point, you know, we've also just generally seen 191 00:09:51,120 --> 00:09:55,480 Speaker 7: challenges that companies that have gotten much further in actually 192 00:09:55,480 --> 00:09:59,880 Speaker 7: commercializing robotaxis. We've seen a major player in that field 193 00:10:00,280 --> 00:10:03,560 Speaker 7: already fall by the wayside, right and GM's you know, Cruse, 194 00:10:03,679 --> 00:10:06,280 Speaker 7: and today they're out with their earnings and sort of 195 00:10:06,280 --> 00:10:08,079 Speaker 7: beating their chests about the fact that they're going to 196 00:10:08,400 --> 00:10:10,600 Speaker 7: lose a whole heck of a lot less money on 197 00:10:10,720 --> 00:10:14,320 Speaker 7: that business that they've decided to just fold in into 198 00:10:14,360 --> 00:10:17,200 Speaker 7: the car company. They're happy about that. So I think 199 00:10:17,320 --> 00:10:19,600 Speaker 7: we've also seen, you know, companies that didn't get so 200 00:10:19,679 --> 00:10:23,319 Speaker 7: far as Cruise fold I'm thinking rg AI, which Volkswagen 201 00:10:23,520 --> 00:10:27,319 Speaker 7: and Ford acquired. We've seen some people start to commercialize 202 00:10:27,440 --> 00:10:31,120 Speaker 7: the robotaxi business, but nobody's making any money, so it 203 00:10:31,200 --> 00:10:34,520 Speaker 7: remains to be seen how anybody's going to actually earn 204 00:10:34,559 --> 00:10:35,160 Speaker 7: anything here. 205 00:10:35,360 --> 00:10:37,320 Speaker 1: Yeah, I think one of the big questions that investors 206 00:10:37,320 --> 00:10:39,160 Speaker 1: are hopefully going to ask is, you know, the Trump 207 00:10:39,200 --> 00:10:41,360 Speaker 1: administration has alluded to this idea that they're going to 208 00:10:41,400 --> 00:10:44,200 Speaker 1: have a federal framework for AVE, so rather than this 209 00:10:44,320 --> 00:10:47,679 Speaker 1: patchwork of state regulations, there could be sort of a 210 00:10:47,720 --> 00:10:50,960 Speaker 1: federal framework that would make it easier for Elon to 211 00:10:50,960 --> 00:10:54,680 Speaker 1: get his robotaxi approved. So if anyone asks Elon about that, 212 00:10:54,800 --> 00:10:56,440 Speaker 1: I mean he could say, oh, yeah, like I was 213 00:10:56,520 --> 00:10:58,640 Speaker 1: just talking to Emil Michael and blah blah blah. I mean, 214 00:10:59,040 --> 00:11:01,680 Speaker 1: he is part of the govern now, and there's a 215 00:11:01,720 --> 00:11:05,040 Speaker 1: reason why he donated so many millions of dollars to Trump. 216 00:11:05,080 --> 00:11:08,560 Speaker 1: There are things on his ask list, and so av 217 00:11:08,800 --> 00:11:11,320 Speaker 1: regulation or lack thereof is one of them, and so 218 00:11:11,679 --> 00:11:13,200 Speaker 1: I think that's going to be a big part of 219 00:11:13,200 --> 00:11:14,280 Speaker 1: the call tomorrow as well. 220 00:11:14,679 --> 00:11:16,880 Speaker 2: One thing, aren't they supposed to have an affordable car 221 00:11:17,040 --> 00:11:19,640 Speaker 2: like now, Craig, weren't we promised to twenty five thousand 222 00:11:19,679 --> 00:11:21,920 Speaker 2: dollars car? Like shouldn't this whole podcast just be like, 223 00:11:21,960 --> 00:11:23,800 Speaker 2: when's the twenty five thousand dollars car coming? 224 00:11:24,120 --> 00:11:28,360 Speaker 7: My best guess to that is is it's never coming. 225 00:11:28,600 --> 00:11:30,640 Speaker 7: And the only way I could see, you know, some 226 00:11:30,760 --> 00:11:34,360 Speaker 7: potential for them actually making good on that is actually 227 00:11:34,400 --> 00:11:36,640 Speaker 7: sticking a steering wheel in that cyber cap that they 228 00:11:36,679 --> 00:11:39,760 Speaker 7: showed a few months back and selling it as a 229 00:11:39,840 --> 00:11:43,000 Speaker 7: human driven car for some time. Maybe they could make 230 00:11:43,040 --> 00:11:46,160 Speaker 7: that sort of you know, smaller sized car at least, 231 00:11:46,200 --> 00:11:49,320 Speaker 7: you know, closer to that price point. But I think 232 00:11:49,440 --> 00:11:52,520 Speaker 7: from what we've sort of gathered over the last year, 233 00:11:52,559 --> 00:11:57,280 Speaker 7: it looks like that's been abandoned for self driving purposes. 234 00:12:02,559 --> 00:12:04,840 Speaker 3: Craig. I wanted to go back, though, for a second, 235 00:12:05,080 --> 00:12:10,119 Speaker 3: to the topic of how Musk's politics are alienating potentially 236 00:12:10,160 --> 00:12:13,840 Speaker 3: a chunk of his customers. We have seen signs of 237 00:12:14,000 --> 00:12:19,280 Speaker 3: late of resistance of sorts or to the company and 238 00:12:19,559 --> 00:12:22,600 Speaker 3: people lashing out at the company and its products. And 239 00:12:22,679 --> 00:12:25,439 Speaker 3: you guys also had an interview with a Tesla rival 240 00:12:25,640 --> 00:12:27,800 Speaker 3: where he spoke to this topic. Tell us a little 241 00:12:27,800 --> 00:12:28,319 Speaker 3: bit about that. 242 00:12:28,480 --> 00:12:31,720 Speaker 7: Yeah, we met with the CEO of Polestar, which you know, 243 00:12:31,800 --> 00:12:34,920 Speaker 7: of course, any company that is trying to compete with 244 00:12:34,960 --> 00:12:38,800 Speaker 7: Tesla is you know, of course incentivized to talk about, 245 00:12:38,840 --> 00:12:42,480 Speaker 7: you know, ways in which they could potentially benefit from 246 00:12:42,520 --> 00:12:45,920 Speaker 7: any setbacks at their rival. But I did find this 247 00:12:45,960 --> 00:12:49,679 Speaker 7: conversation with Michael Loschler, that the relatively new CEO of Polestar, 248 00:12:49,760 --> 00:12:53,400 Speaker 7: really interesting because he's German and as we know, you know, 249 00:12:53,600 --> 00:12:56,600 Speaker 7: Elon has been inserting himself in German politics to this 250 00:12:56,679 --> 00:13:00,400 Speaker 7: really significant degree and throwing his weight beyond the a 251 00:13:00,520 --> 00:13:03,440 Speaker 7: f D, which is, you know, a far right party 252 00:13:03,480 --> 00:13:06,600 Speaker 7: in Germany with a lot of skeletons in its closet. 253 00:13:07,120 --> 00:13:09,600 Speaker 7: And he said in no uncertain terms that you know, 254 00:13:09,679 --> 00:13:13,480 Speaker 7: the way that Musk has inserted himself into the sort 255 00:13:13,480 --> 00:13:18,480 Speaker 7: of political conversation in Germany is unacceptable and is not 256 00:13:18,559 --> 00:13:21,200 Speaker 7: going to fly. And you know, I think that we've 257 00:13:21,240 --> 00:13:25,000 Speaker 7: seen some indications that you know, he's he's right to 258 00:13:25,000 --> 00:13:29,240 Speaker 7: say that. We've seen protesters project the emotion that Musk 259 00:13:29,360 --> 00:13:32,960 Speaker 7: made at last week's Trump event that you know, people 260 00:13:33,000 --> 00:13:35,760 Speaker 7: saw as a sort of Roman salute, you know, that 261 00:13:35,880 --> 00:13:41,440 Speaker 7: projected onto Tesla's factory outside Berlin with the words kile Tesla. 262 00:13:42,120 --> 00:13:45,200 Speaker 7: We've seen in Poland, which you know, this week is 263 00:13:45,240 --> 00:13:48,800 Speaker 7: commemorating eighty years since Auschwitz. You know, a minister call 264 00:13:48,880 --> 00:13:51,960 Speaker 7: for a boycott against the company. We've seen you know, 265 00:13:52,080 --> 00:13:56,000 Speaker 7: vandalized cyber trucks in the Bay Area, and just this 266 00:13:56,080 --> 00:13:58,160 Speaker 7: morning I saw something about, you know, a store in 267 00:13:58,240 --> 00:14:01,720 Speaker 7: Seattle that was tagged with you know, references to Hitler 268 00:14:01,760 --> 00:14:02,120 Speaker 7: and so. 269 00:14:02,320 --> 00:14:05,000 Speaker 3: Yeah, I know that vandalized storn Seattle really jumped out. 270 00:14:05,040 --> 00:14:07,800 Speaker 3: I mean it was the language that was sprayed on 271 00:14:07,960 --> 00:14:12,559 Speaker 3: the window was aggressive, Nazi scum golf. Well, and that's 272 00:14:12,600 --> 00:14:13,000 Speaker 3: what it says. 273 00:14:13,040 --> 00:14:14,240 Speaker 2: Well, you know, we can get to this, maybe we 274 00:14:14,280 --> 00:14:16,600 Speaker 2: talk about X, but like we're seeing a lot the 275 00:14:16,640 --> 00:14:21,480 Speaker 2: backlash has been much much more pronounced since the quote 276 00:14:21,520 --> 00:14:25,600 Speaker 2: unquote awkward gesture. You know, we've seen Reddit, lots of 277 00:14:25,640 --> 00:14:28,680 Speaker 2: boards on Reddit spanning X links like and you're just 278 00:14:28,720 --> 00:14:31,120 Speaker 2: seeing like it's more than just like a bumper sticker 279 00:14:31,200 --> 00:14:33,760 Speaker 2: or two. You're seeing more people pushing against it. On 280 00:14:33,800 --> 00:14:36,680 Speaker 2: the other hand, of course, like America's polarized country. You 281 00:14:36,720 --> 00:14:38,280 Speaker 2: know a lot of Tesla sales. 282 00:14:38,080 --> 00:14:40,640 Speaker 3: Or something, but it's not just America, it's the world, 283 00:14:40,720 --> 00:14:41,840 Speaker 3: Yes is pointing out. 284 00:14:41,920 --> 00:14:43,680 Speaker 2: It definitely seems like this is going to be bad 285 00:14:43,680 --> 00:14:46,360 Speaker 2: for business in Europe. It does seem like Tesla sales 286 00:14:46,360 --> 00:14:49,680 Speaker 2: have suffered from Elon Musk's political turn. I don't think 287 00:14:49,720 --> 00:14:51,560 Speaker 2: we know yet just how much. 288 00:14:51,760 --> 00:14:53,560 Speaker 3: Yeah, I mean, and Dan, I know I've already got 289 00:14:53,560 --> 00:14:55,800 Speaker 3: you in my year saying, oh, you know that that's 290 00:14:55,840 --> 00:14:58,720 Speaker 3: anecdotal evidence. You know, I won't show it to me 291 00:14:58,720 --> 00:15:01,440 Speaker 3: in the macro numbers. Given that there are some people 292 00:15:01,480 --> 00:15:04,400 Speaker 3: who feel so strongly about it that they're willing to 293 00:15:04,440 --> 00:15:09,000 Speaker 3: go out and vandalize private property in multiple countries, is 294 00:15:09,040 --> 00:15:14,960 Speaker 3: that not a window into a broader sentiment among a 295 00:15:15,080 --> 00:15:19,960 Speaker 3: much larger percentage of potential Tesla customers who you are 296 00:15:20,040 --> 00:15:20,720 Speaker 3: driving away. 297 00:15:20,920 --> 00:15:24,920 Speaker 1: Listen, there's no question that Elon's politics are hurting sales. 298 00:15:24,960 --> 00:15:28,600 Speaker 1: I think that's irrefutable, But there's no hard data that 299 00:15:29,240 --> 00:15:34,440 Speaker 1: ties the two together. Because people don't buy Tesla's for 300 00:15:34,440 --> 00:15:36,520 Speaker 1: any number of reasons. And like you know the person 301 00:15:36,600 --> 00:15:39,040 Speaker 1: who went out and spray painted a Nazi scum on 302 00:15:39,080 --> 00:15:41,400 Speaker 1: a store, Like do they own a Tesla? Were they 303 00:15:41,440 --> 00:15:43,400 Speaker 1: about to buy a Tesla and then they weren't. Like 304 00:15:43,640 --> 00:15:46,160 Speaker 1: a lot of this is like performative outrage, and I 305 00:15:46,200 --> 00:15:48,480 Speaker 1: mean I get it, Like the outrage is real, but 306 00:15:48,520 --> 00:15:51,280 Speaker 1: like it's the same thing of like everyone's saying they're 307 00:15:51,280 --> 00:15:53,680 Speaker 1: going to move to Canada if Trump is reelected. These 308 00:15:53,720 --> 00:15:56,320 Speaker 1: are not people who necessarily owned a car or were 309 00:15:56,360 --> 00:16:00,320 Speaker 1: in the market for a car like so and like 310 00:16:00,360 --> 00:16:02,360 Speaker 1: I see the same thing. Like all there's lots of 311 00:16:02,360 --> 00:16:04,440 Speaker 1: people that are like, oh my god, I know I'm 312 00:16:04,480 --> 00:16:07,120 Speaker 1: embarrassed to drive my Tesla and it's like, well you're 313 00:16:07,160 --> 00:16:09,520 Speaker 1: still but you're still driving it. And like the biggest 314 00:16:09,520 --> 00:16:12,880 Speaker 1: thing is the stock. Like if you're so upset about 315 00:16:13,440 --> 00:16:16,840 Speaker 1: Elon and his and his behavior, then sell the stock. 316 00:16:16,920 --> 00:16:21,160 Speaker 1: Like like the biggest example is California's pension fund is 317 00:16:21,160 --> 00:16:23,480 Speaker 1: a huge shareholder of Tesla. They have sold off their 318 00:16:23,520 --> 00:16:25,600 Speaker 1: position a bit, but they are still like a top holder. 319 00:16:25,920 --> 00:16:28,400 Speaker 1: So I'm not like a big fan of like this 320 00:16:28,560 --> 00:16:32,960 Speaker 1: performative outrage. Like if people were really upset the stock 321 00:16:33,040 --> 00:16:35,400 Speaker 1: valuation would not be as high as it is, and 322 00:16:35,440 --> 00:16:38,600 Speaker 1: the fact that the stock has remained so high despite 323 00:16:38,680 --> 00:16:42,440 Speaker 1: all of his shenanigans over the past six months is 324 00:16:42,520 --> 00:16:44,880 Speaker 1: really telling. So I think you know, you will continue 325 00:16:44,920 --> 00:16:48,400 Speaker 1: to see Tesla lose market share in states like California, 326 00:16:48,800 --> 00:16:52,680 Speaker 1: you will continue to see brand erosion, and like you know, 327 00:16:52,760 --> 00:16:56,800 Speaker 1: surveys about the value of the brand erode. But Elon 328 00:16:56,920 --> 00:16:59,240 Speaker 1: is a financial engineer, and as long as that stock 329 00:16:59,280 --> 00:17:02,320 Speaker 1: price stays hi, he is going to be fine. And 330 00:17:02,400 --> 00:17:05,760 Speaker 1: like no analyst on Wall Street is calling out this. 331 00:17:06,000 --> 00:17:08,040 Speaker 3: No, no, Dana. That's a good point. But I will 332 00:17:08,119 --> 00:17:10,480 Speaker 3: I will note that in speaking with Esha Day, our 333 00:17:10,600 --> 00:17:13,080 Speaker 3: Tesla stock reporter this morning, she did say to me 334 00:17:13,600 --> 00:17:16,600 Speaker 3: that she and her conversations with analysts that they at 335 00:17:16,680 --> 00:17:18,680 Speaker 3: least they are bringing it up more with her than 336 00:17:18,680 --> 00:17:20,639 Speaker 3: they ever have before in the past. Perhaps not to 337 00:17:20,680 --> 00:17:23,000 Speaker 3: the point indeed of penning it into notes, but there 338 00:17:23,040 --> 00:17:24,120 Speaker 3: at least it's something that can. 339 00:17:24,040 --> 00:17:26,520 Speaker 1: Because they're afraid. So if you, if you really care, 340 00:17:26,600 --> 00:17:27,360 Speaker 1: then put it in a. 341 00:17:27,320 --> 00:17:29,600 Speaker 3: Note, put it in Wall Street, put it in a note. 342 00:17:29,640 --> 00:17:31,080 Speaker 3: Otherwise we don't want to hear about it. 343 00:17:31,720 --> 00:17:35,080 Speaker 2: Max tell Us Bingo about being I mean, you know, 344 00:17:35,600 --> 00:17:38,359 Speaker 2: the best time of the year. We have huge news 345 00:17:38,400 --> 00:17:42,640 Speaker 2: here in elin Klan tell us Bloomberg Terminal subscribers. I'm 346 00:17:42,680 --> 00:17:45,680 Speaker 2: sure that most of our listeners already subscribe to the 347 00:17:45,680 --> 00:17:49,359 Speaker 2: Bloomberg Terminal can now play Bingo on their terminal and 348 00:17:49,400 --> 00:17:50,199 Speaker 2: it's interactive. 349 00:17:50,280 --> 00:17:53,359 Speaker 6: You have there's a leaderboard. The card will change. We 350 00:17:53,440 --> 00:17:56,399 Speaker 6: are very Dana and I are very excited about there. 351 00:17:56,640 --> 00:17:59,200 Speaker 3: There's a leaderboard wayman, so everyone's not getting the same 352 00:17:59,240 --> 00:17:59,960 Speaker 3: card anymore. 353 00:18:00,040 --> 00:18:01,720 Speaker 6: You got a different car gives its shuffled. 354 00:18:01,800 --> 00:18:05,280 Speaker 1: We have we have, we have, we have iterated our 355 00:18:05,359 --> 00:18:07,960 Speaker 1: product and it is soft launch. 356 00:18:08,600 --> 00:18:10,840 Speaker 6: This is all human labor as far as I know. 357 00:18:11,160 --> 00:18:12,919 Speaker 6: But but we are very excited. 358 00:18:12,520 --> 00:18:14,480 Speaker 3: About it and to you by deep seek. 359 00:18:14,640 --> 00:18:16,880 Speaker 2: I do think that like this is really just from 360 00:18:16,880 --> 00:18:21,760 Speaker 2: a pure Bingo perspective, leaving out politics or money. Just 361 00:18:21,800 --> 00:18:24,920 Speaker 2: like the question of how trumpy does this earnings call 362 00:18:25,040 --> 00:18:28,040 Speaker 2: get to me is like it will be interesting. We've 363 00:18:28,040 --> 00:18:31,040 Speaker 2: got a few trumpy categories on the Bingo cards. Some 364 00:18:31,280 --> 00:18:36,840 Speaker 2: i'd say some reaches. First Buddy Greenland are both potential squares. 365 00:18:36,560 --> 00:18:39,080 Speaker 3: All right, So you like First Buddy as a Bingo 366 00:18:39,440 --> 00:18:42,879 Speaker 3: as a Bingo square. You also like Greenland Fun Dana, 367 00:18:42,920 --> 00:18:44,840 Speaker 3: what are your favorite squares out there? 368 00:18:45,560 --> 00:18:45,760 Speaker 6: Oh? 369 00:18:45,800 --> 00:18:48,600 Speaker 1: Deep Seek, Come on, this is gonna be all about 370 00:18:48,640 --> 00:18:53,040 Speaker 1: I mean, I'm waiting for you Deep China questions, Deep Seek, 371 00:18:53,560 --> 00:18:57,280 Speaker 1: cybercab Tariffs. Let's go Geo, I want, I want full 372 00:18:57,320 --> 00:18:58,560 Speaker 1: on geopolitical Elon. 373 00:18:59,520 --> 00:19:03,399 Speaker 3: You all can still download the card, and this is 374 00:19:03,400 --> 00:19:06,600 Speaker 3: for those who are not Bloomberg terminal subscribers. That's small 375 00:19:06,680 --> 00:19:09,720 Speaker 3: universe out there. You can download it at Bloomberg dot 376 00:19:09,760 --> 00:19:14,280 Speaker 3: com backslash Elon Inc. And play with everyone here. 377 00:19:14,240 --> 00:19:16,280 Speaker 6: The terminal handle b NNGO. 378 00:19:16,760 --> 00:19:16,800 Speaker 2: Go. 379 00:19:17,160 --> 00:19:20,360 Speaker 3: By the way, no I b n g O. Isn't 380 00:19:20,359 --> 00:19:23,320 Speaker 3: that what I said? I'm just just for emphasis, right, 381 00:19:25,040 --> 00:19:27,840 Speaker 3: Craig Trudell Dan out. We say goodbye to you, but 382 00:19:28,200 --> 00:19:30,600 Speaker 3: enjoy Bingo, enjoy the earnings, and we'll talk next week. 383 00:19:30,680 --> 00:19:32,000 Speaker 6: Thank you, Thanks much. 384 00:19:35,160 --> 00:19:39,000 Speaker 3: Okay, Max and I are now joined by shred Ar Nadaijan, 385 00:19:39,320 --> 00:19:42,280 Speaker 3: one of our crack Wall Street reporters. Here, Shri, Hello, 386 00:19:42,320 --> 00:19:45,240 Speaker 3: welcome to the show. Hello. Now listen, Max. Shre's got 387 00:19:45,240 --> 00:19:47,600 Speaker 3: this story that he likes to periodically through out there 388 00:19:47,640 --> 00:19:49,280 Speaker 3: that I just want to just debunk from the get go. 389 00:19:49,400 --> 00:19:52,040 Speaker 3: He alleges that at some point in early on his career, 390 00:19:52,080 --> 00:19:54,000 Speaker 3: I tried to fire him. That's not true, because had 391 00:19:54,040 --> 00:19:58,480 Speaker 3: I tried to fire him, he wouldn't be here today. 392 00:19:58,480 --> 00:20:02,200 Speaker 3: But Shre is a non mitigated superstar. And that's why 393 00:20:02,240 --> 00:20:03,120 Speaker 3: we have used. 394 00:20:03,000 --> 00:20:04,720 Speaker 6: To believe this story because it's funny. 395 00:20:06,119 --> 00:20:09,600 Speaker 3: True, it is not, it's bold, all right, So Shre, 396 00:20:10,160 --> 00:20:14,920 Speaker 3: We're going to talk about Musk and his bankers and 397 00:20:14,960 --> 00:20:19,560 Speaker 3: his acquisition of Twitter for our listeners out there who've 398 00:20:19,560 --> 00:20:21,960 Speaker 3: forgotten a bit about this, which may be a number 399 00:20:21,960 --> 00:20:24,440 Speaker 3: of them. Not they haven't certainly haven't forgotten about Twitter 400 00:20:24,520 --> 00:20:27,240 Speaker 3: or X, but they've forgotten about, perhaps about the way 401 00:20:27,280 --> 00:20:29,880 Speaker 3: the deal went down. Let's go back to the beginning 402 00:20:29,920 --> 00:20:32,119 Speaker 3: and remind them the way, remind him about how this 403 00:20:32,200 --> 00:20:33,080 Speaker 3: deal was financed. 404 00:20:33,119 --> 00:20:34,679 Speaker 4: So we're in twenty twenty five. You want to go 405 00:20:34,680 --> 00:20:36,600 Speaker 4: back to twenty twenty two, I'll take you further back. 406 00:20:36,640 --> 00:20:38,680 Speaker 4: I'll take you back to twenty ten. That's the first 407 00:20:38,760 --> 00:20:42,160 Speaker 4: time Elon Musk ever tweeted on Twitter. Twenty twenty two. 408 00:20:42,240 --> 00:20:45,360 Speaker 4: Elon picks up this crusade of Twitter is not doing 409 00:20:45,480 --> 00:20:49,080 Speaker 4: enough for free speech and what starts off or at 410 00:20:49,119 --> 00:20:51,320 Speaker 4: least looks like and sounds like a joke. Idea of 411 00:20:51,400 --> 00:20:54,000 Speaker 4: him wanting to buy Twitter, wanting to pull his user 412 00:20:54,040 --> 00:20:55,520 Speaker 4: and wanting to see if he could take over the 413 00:20:55,520 --> 00:21:01,120 Speaker 4: platform actually becomes something serious. Management is rattled by it. 414 00:21:01,200 --> 00:21:04,520 Speaker 4: They even offer him a board seat. But soon things 415 00:21:04,520 --> 00:21:06,520 Speaker 4: are scalid and he just straight up says I want 416 00:21:06,560 --> 00:21:09,159 Speaker 4: to buy Twitter. Comes in with a pretty premium on 417 00:21:09,320 --> 00:21:13,400 Speaker 4: what was then a public company, so forces Twitter management 418 00:21:13,800 --> 00:21:17,240 Speaker 4: and the board to consider his offer pretty seriously. All 419 00:21:17,280 --> 00:21:21,040 Speaker 4: in that was about forty four billion dollars and after 420 00:21:21,160 --> 00:21:23,199 Speaker 4: a little bit of push and pull, I think at 421 00:21:23,240 --> 00:21:26,399 Speaker 4: the end of the day, Twitter, advised by Goldman Sachs, 422 00:21:26,520 --> 00:21:30,160 Speaker 4: JP Morgan, two of the premier investment banks, who have 423 00:21:30,240 --> 00:21:32,440 Speaker 4: to do their duty and do tell the management that 424 00:21:32,520 --> 00:21:34,879 Speaker 4: this is a pretty good deal, like the man or not. 425 00:21:35,119 --> 00:21:38,120 Speaker 4: You can't say no to this because your shareholders will 426 00:21:38,119 --> 00:21:41,560 Speaker 4: be upset, and they approve the deal. That sounds simple enough. 427 00:21:41,680 --> 00:21:43,480 Speaker 4: Now we should move on to the chapter where Elon 428 00:21:43,600 --> 00:21:48,080 Speaker 4: owns Twitter. But with everything Elon thinks are not quite 429 00:21:48,240 --> 00:21:50,919 Speaker 4: that's simple. Two months later, he tries to find a 430 00:21:50,960 --> 00:21:53,919 Speaker 4: creative way to get out of the deal. However, the 431 00:21:53,960 --> 00:21:58,000 Speaker 4: courts force him to go ahead with that deal. And 432 00:21:58,080 --> 00:22:00,320 Speaker 4: so he does front up the money. 433 00:22:00,119 --> 00:22:04,120 Speaker 3: That forty four billion, which comes from both a group 434 00:22:04,160 --> 00:22:06,919 Speaker 3: of equity investors who put up money to buy a 435 00:22:07,000 --> 00:22:10,600 Speaker 3: stake beside him, and also these Wall Street bangs. 436 00:22:10,280 --> 00:22:14,280 Speaker 4: Correct cash from Elon margin loans extended next to Tesla 437 00:22:14,320 --> 00:22:17,280 Speaker 4: stock collateral, a group of equity investors that includes people 438 00:22:17,359 --> 00:22:22,800 Speaker 4: like everyone from Larry Ellison's to Prince Alwalids. So you 439 00:22:22,920 --> 00:22:25,720 Speaker 4: have an eclectic mix there backing this deal, Mark and 440 00:22:25,800 --> 00:22:28,159 Speaker 4: recent sequoia. So all of these players who put in 441 00:22:28,160 --> 00:22:29,240 Speaker 4: some of the equity city. 442 00:22:29,200 --> 00:22:32,040 Speaker 3: I believe right that. I'm not sure that's right. 443 00:22:32,320 --> 00:22:32,840 Speaker 6: He was in there. 444 00:22:32,880 --> 00:22:33,840 Speaker 3: It was a. 445 00:22:33,880 --> 00:22:35,399 Speaker 6: Colectic It wasn't czy. 446 00:22:35,400 --> 00:22:36,240 Speaker 3: A part of the mix is. 447 00:22:36,240 --> 00:22:38,800 Speaker 4: Cz Yeah, you know, yes, right, So that was right, 448 00:22:38,880 --> 00:22:42,840 Speaker 4: eclectic mix of investors. So you have a situation where 449 00:22:43,160 --> 00:22:45,880 Speaker 4: when you still need about thirteen billion dollars of debt. 450 00:22:45,560 --> 00:22:48,159 Speaker 3: Thirteen right, So he's picked up with so it's a 451 00:22:48,200 --> 00:22:50,560 Speaker 3: forty four billion dollar purchase. They've come up with thirty 452 00:22:50,600 --> 00:22:54,080 Speaker 3: some odd in cash money they need financing of about 453 00:22:54,119 --> 00:22:55,200 Speaker 3: thirteen billion. 454 00:22:55,200 --> 00:22:58,159 Speaker 4: And thirteen billion on a company like Twitter, which if 455 00:22:58,200 --> 00:22:59,639 Speaker 4: you go back to twenty twenty one, look at the 456 00:22:59,720 --> 00:23:02,280 Speaker 4: finale Fullier twenty twenty one. I think they were projecting 457 00:23:02,280 --> 00:23:04,520 Speaker 4: EBITDAF something like a billion in Jeta. 458 00:23:04,720 --> 00:23:05,640 Speaker 3: You got to help us out here. 459 00:23:05,640 --> 00:23:10,120 Speaker 4: IBITDA fancy earnings metric, but it's a metric that dead 460 00:23:10,160 --> 00:23:13,800 Speaker 4: investors live by. It's it's a measurement of profit, not 461 00:23:13,920 --> 00:23:17,879 Speaker 4: necessarily pure profit, but it is a key metric for 462 00:23:18,000 --> 00:23:21,800 Speaker 4: Wall Street investors. And by that metric, keeping on thirteen 463 00:23:21,840 --> 00:23:24,439 Speaker 4: billion dollars of debt on that company is a risky, 464 00:23:24,520 --> 00:23:27,200 Speaker 4: risky maneuver. And if you go back to the environment 465 00:23:27,240 --> 00:23:29,360 Speaker 4: at that time, in the years leading up to that deal, 466 00:23:29,880 --> 00:23:32,000 Speaker 4: and you know this very well because we've worked in 467 00:23:32,040 --> 00:23:34,440 Speaker 4: so many stories about this over the years, that it's 468 00:23:34,520 --> 00:23:37,119 Speaker 4: the kind of risk that banks were not in a 469 00:23:37,160 --> 00:23:39,000 Speaker 4: position to take, or at least didn't want to dig 470 00:23:39,080 --> 00:23:41,640 Speaker 4: because regulators were not happy with it. They didn't want 471 00:23:41,680 --> 00:23:43,480 Speaker 4: to have to run around with that kind of risk. 472 00:23:44,359 --> 00:23:47,400 Speaker 4: Except the X factor here, the literal X factor here 473 00:23:47,480 --> 00:23:50,440 Speaker 4: is you're dealing with someone like Elon Musk. Help him 474 00:23:50,480 --> 00:23:53,639 Speaker 4: out on one deal and it could pay off brilliantly 475 00:23:53,720 --> 00:23:56,520 Speaker 4: on so many other transactions and financings that brings to 476 00:23:56,560 --> 00:23:56,880 Speaker 4: the market. 477 00:23:56,960 --> 00:23:58,919 Speaker 3: You help him come up with this money, even if 478 00:23:58,960 --> 00:24:01,320 Speaker 3: you're not crazy doing the deal. You can help them 479 00:24:01,359 --> 00:24:03,440 Speaker 3: come up with the money the thirteen billion dollars which 480 00:24:03,440 --> 00:24:05,320 Speaker 3: you lend to him and then he's going to cut 481 00:24:05,400 --> 00:24:07,840 Speaker 3: you in and other deals in the future, maybe an 482 00:24:07,840 --> 00:24:10,680 Speaker 3: IPO of SpaceX SO and so forth. So the group 483 00:24:10,720 --> 00:24:14,840 Speaker 3: of the banks are names like Morgan, Stanley, Bank of America, Barclays, 484 00:24:14,880 --> 00:24:18,480 Speaker 3: among others. Their normal mo shre is they make a 485 00:24:18,520 --> 00:24:20,560 Speaker 3: loan like this, it's a risky loan, it's called a 486 00:24:20,640 --> 00:24:23,359 Speaker 3: leverage loan, and they want to get out of it. 487 00:24:23,400 --> 00:24:25,840 Speaker 3: They want to sell these godforsaken loans, or at least 488 00:24:25,840 --> 00:24:27,760 Speaker 3: the vast bulk of them. Two clients are theirs. They 489 00:24:27,800 --> 00:24:29,560 Speaker 3: don't want to get stuck with it on their books. 490 00:24:30,000 --> 00:24:32,520 Speaker 3: The financiers who are just for a second, who are 491 00:24:32,520 --> 00:24:34,800 Speaker 3: typically those kind of buyers who would buy those loans 492 00:24:34,800 --> 00:24:35,240 Speaker 3: from banks. 493 00:24:35,359 --> 00:24:38,239 Speaker 4: Think of large institutional investors, Think of people who are 494 00:24:38,280 --> 00:24:40,679 Speaker 4: big in credit markets. You can go from a Blackstone 495 00:24:40,680 --> 00:24:43,359 Speaker 4: to Apolo, to Pimco to Hatch Funds. A lot of 496 00:24:43,400 --> 00:24:46,720 Speaker 4: these institutions who themselves have come up with the money 497 00:24:46,720 --> 00:24:49,480 Speaker 4: because pension funds and retirement funds and sovereign wealth funds 498 00:24:49,480 --> 00:24:52,760 Speaker 4: have invested in them. They have this treasure trove. They 499 00:24:52,760 --> 00:24:55,280 Speaker 4: can use the cash from that to buy into these 500 00:24:55,320 --> 00:24:57,440 Speaker 4: deals and the deals that the banks bring into the market. 501 00:24:57,520 --> 00:24:59,000 Speaker 4: So these are the kinds of people that they will 502 00:24:59,040 --> 00:25:03,240 Speaker 4: approach and should have been a cell They recognized from 503 00:25:03,240 --> 00:25:06,000 Speaker 4: the outset was going to be a hard sell back 504 00:25:06,040 --> 00:25:10,040 Speaker 4: in twenty back in twenty twenty two, because everything constant 505 00:25:10,080 --> 00:25:13,199 Speaker 4: of Twitter's earnings was going on the same path that 506 00:25:13,280 --> 00:25:16,080 Speaker 4: it was at. This was a difficult deal. But if 507 00:25:16,080 --> 00:25:18,000 Speaker 4: you remember the noise at the time and all the 508 00:25:18,119 --> 00:25:21,720 Speaker 4: changes that Elon made, all the massive staff cuts, that 509 00:25:21,960 --> 00:25:26,600 Speaker 4: was chaos, and that chaos meant was advertisers were the 510 00:25:26,640 --> 00:25:29,000 Speaker 4: first ones to flee. That was the lifeblood of revenue 511 00:25:29,040 --> 00:25:31,399 Speaker 4: of Twitter. That's how they made a lot of their money. 512 00:25:31,760 --> 00:25:35,080 Speaker 4: And when that happened, the earnings profile, the forward earnings profile, 513 00:25:35,200 --> 00:25:40,240 Speaker 4: suddenly looked very shaky, and revenue did slump, earnings did slump, 514 00:25:40,440 --> 00:25:44,400 Speaker 4: and that suddenly became a very very difficult ask when 515 00:25:44,400 --> 00:25:46,360 Speaker 4: you go to investors and say, can you please take 516 00:25:46,359 --> 00:25:46,959 Speaker 4: this dead off us. 517 00:25:47,119 --> 00:25:48,840 Speaker 2: Not only that, but you had Elon Musk in the 518 00:25:48,840 --> 00:25:52,000 Speaker 2: months before the deal was closed trying to get out 519 00:25:52,000 --> 00:25:54,400 Speaker 2: of it and going around telling everyone that forty four 520 00:25:54,400 --> 00:25:56,440 Speaker 2: billion dollars was way too much money. 521 00:25:56,440 --> 00:25:58,440 Speaker 6: This thing was actually mad. 522 00:25:58,680 --> 00:26:02,000 Speaker 2: Yeah, like basically doing the worst sales job ever when 523 00:26:02,000 --> 00:26:05,520 Speaker 2: you're trying to unload some corporate debt, right, And so yeah, 524 00:26:05,520 --> 00:26:07,320 Speaker 2: I mean it's like as soon as the deal closed, 525 00:26:07,359 --> 00:26:09,280 Speaker 2: even if he hadn't told the advertisers to go f 526 00:26:09,359 --> 00:26:12,399 Speaker 2: themselves as he did eventually, I think it would have 527 00:26:12,440 --> 00:26:15,320 Speaker 2: been a difficult You just don't want to climb like 528 00:26:15,359 --> 00:26:19,200 Speaker 2: that actually going out that making life so difficult for you. 529 00:26:19,240 --> 00:26:21,040 Speaker 2: They wouldn't say that because they also know he's the 530 00:26:21,080 --> 00:26:23,359 Speaker 2: man behind SpaceX and Tesla and Lincoln. 531 00:26:23,920 --> 00:26:25,840 Speaker 6: You get to be the client from hell though if 532 00:26:25,880 --> 00:26:26,560 Speaker 6: you are. 533 00:26:26,560 --> 00:26:28,760 Speaker 2: A whale, Right, It's like it's like the guy in 534 00:26:28,800 --> 00:26:32,239 Speaker 2: the casino kind of abusing all of the you know, 535 00:26:32,320 --> 00:26:34,800 Speaker 2: the dealers and the person bringing the drinks or whatever, 536 00:26:35,080 --> 00:26:37,760 Speaker 2: and is still being treated super well because everybody there 537 00:26:37,800 --> 00:26:40,000 Speaker 2: knows that he cow. 538 00:26:40,200 --> 00:26:42,040 Speaker 3: They'll put up with a lot of a lot of 539 00:26:42,080 --> 00:26:45,119 Speaker 3: your bs. If you're not, they won't. And even the 540 00:26:45,119 --> 00:26:47,520 Speaker 3: other thing tre that went against these bankers after this 541 00:26:47,600 --> 00:26:51,639 Speaker 3: deal was cut to finance the purchase is the interest 542 00:26:51,720 --> 00:26:54,080 Speaker 3: rate environment changed quite a bit. You went from a 543 00:26:54,080 --> 00:26:57,040 Speaker 3: world in which interest rates across the globe and the 544 00:26:57,160 --> 00:26:59,800 Speaker 3: US and other places benchmark rates were close to zero, 545 00:27:00,240 --> 00:27:04,119 Speaker 3: they surge up to over five percent. So all that 546 00:27:04,160 --> 00:27:06,480 Speaker 3: goes against them. They've been sitting on these things forever, 547 00:27:06,720 --> 00:27:09,040 Speaker 3: nursing losses. I think some of them have booked, have 548 00:27:09,119 --> 00:27:12,119 Speaker 3: written off losses on it. But again, all of a sudden, 549 00:27:12,160 --> 00:27:14,440 Speaker 3: they're in action, They're in play, they're trying to sell 550 00:27:14,480 --> 00:27:16,960 Speaker 3: these things. What is given them this wind at their back? 551 00:27:17,400 --> 00:27:20,200 Speaker 4: Well, the noises died down around Twitter, the. 552 00:27:20,160 --> 00:27:22,480 Speaker 3: Platform we like to never for do it as X. 553 00:27:22,359 --> 00:27:24,080 Speaker 4: And now we have to call it X, so that 554 00:27:24,600 --> 00:27:26,800 Speaker 4: not only has the noise died down around Twitter, Twitter 555 00:27:26,840 --> 00:27:29,160 Speaker 4: itself has died down, and we talk only about X. 556 00:27:29,480 --> 00:27:33,440 Speaker 4: It does seem to have maintained a core group of users. 557 00:27:33,960 --> 00:27:37,359 Speaker 4: And we have gone through this very very busy cycle 558 00:27:37,400 --> 00:27:40,680 Speaker 4: which otherwise is known as a US election cycle, which 559 00:27:40,720 --> 00:27:43,439 Speaker 4: has meant that that platform has been more active and 560 00:27:43,480 --> 00:27:46,280 Speaker 4: more busy than usual. That is a good time for 561 00:27:46,320 --> 00:27:48,600 Speaker 4: a social media platform, and especially good time for a 562 00:27:48,680 --> 00:27:52,439 Speaker 4: social media platform that's sort of news focused, right, And 563 00:27:52,480 --> 00:27:55,080 Speaker 4: also a lot of the advertisers who initially fled Twitter 564 00:27:55,600 --> 00:27:58,520 Speaker 4: are back on X. They are advertising on that platform. 565 00:27:58,520 --> 00:28:02,480 Speaker 4: Are they there are certain Twitter has said that this is. 566 00:28:02,480 --> 00:28:03,720 Speaker 3: What the bankers are telling shre. 567 00:28:03,920 --> 00:28:07,720 Speaker 6: We don't really know what that means. Does it Does 568 00:28:07,760 --> 00:28:08,520 Speaker 6: it mean. 569 00:28:08,359 --> 00:28:11,520 Speaker 2: That like the advertisers who were there before are spending 570 00:28:11,520 --> 00:28:12,639 Speaker 2: at their previous levels? 571 00:28:12,720 --> 00:28:13,720 Speaker 6: I would I would guess. 572 00:28:13,600 --> 00:28:16,640 Speaker 2: The answer is now, does it mean that advertisers who 573 00:28:16,640 --> 00:28:20,680 Speaker 2: were like completely staying out of x because they were 574 00:28:20,680 --> 00:28:23,399 Speaker 2: offended by Elon Musk or actually just didn't think Twitter 575 00:28:23,440 --> 00:28:25,879 Speaker 2: was good enough business have decided, Hey, you know this 576 00:28:26,000 --> 00:28:28,080 Speaker 2: guy is at the arm of Trump. Maybe it makes 577 00:28:28,119 --> 00:28:30,119 Speaker 2: sense to like throw them a couple bucks and avoid 578 00:28:30,359 --> 00:28:32,240 Speaker 2: getting into a Twitter war with one of the most 579 00:28:32,280 --> 00:28:34,960 Speaker 2: powerful people, if not the most powerful people on the planet. 580 00:28:35,040 --> 00:28:36,359 Speaker 6: Like, it's it's more the latter. 581 00:28:36,600 --> 00:28:42,240 Speaker 3: If you bail, that is an improvement. Arguably, Yeah, bankers 582 00:28:42,280 --> 00:28:44,720 Speaker 3: are telling you that advertisers are bad. No. 583 00:28:44,840 --> 00:28:47,120 Speaker 4: But but more importantly you also have to slice and 584 00:28:47,200 --> 00:28:49,200 Speaker 4: dicee that a bit. You don't have to worry about 585 00:28:49,200 --> 00:28:52,240 Speaker 4: the absolute math here. I don't need a company that 586 00:28:52,400 --> 00:28:55,840 Speaker 4: is worth forty four billion dollars to make this debt 587 00:28:56,160 --> 00:28:58,680 Speaker 4: feeling to invest us. I just need to make sure 588 00:28:58,720 --> 00:29:01,400 Speaker 4: that this company is strong in enough that your money 589 00:29:01,400 --> 00:29:04,920 Speaker 4: good on the thirteen billion dollars. So from that perspective, 590 00:29:04,960 --> 00:29:08,040 Speaker 4: that has been a bit of a rebound. It's the 591 00:29:08,120 --> 00:29:10,200 Speaker 4: revenue of this company is certainly not what it was 592 00:29:10,240 --> 00:29:12,760 Speaker 4: for fullier twenty twenty one. We're still way of that mark, 593 00:29:12,840 --> 00:29:15,560 Speaker 4: is my understanding, based on our conversations with bankers and investments. 594 00:29:15,600 --> 00:29:16,440 Speaker 3: It's going back up. 595 00:29:16,720 --> 00:29:20,680 Speaker 4: It is improved from say, twelve months ago, from eighteen 596 00:29:20,680 --> 00:29:24,280 Speaker 4: months ago. So that's a helpful sign. Add to that 597 00:29:24,520 --> 00:29:28,000 Speaker 4: two very distinct factors. Not the kind of things you 598 00:29:28,120 --> 00:29:30,720 Speaker 4: keep in mind when you're thinking about leverage, finance, when 599 00:29:30,720 --> 00:29:33,760 Speaker 4: you're thinking about risky corporate debt, but here it matters. 600 00:29:34,240 --> 00:29:38,280 Speaker 4: Elon played a key role in cheer leading Trump's return 601 00:29:38,360 --> 00:29:39,080 Speaker 4: to the white. 602 00:29:39,400 --> 00:29:42,120 Speaker 3: And access kind of, as Max calls it, the media 603 00:29:42,240 --> 00:29:43,960 Speaker 3: arm to a certain degree of the Republican Party. 604 00:29:43,960 --> 00:29:45,800 Speaker 2: I mean, the risk here, right, if you hold their 605 00:29:45,800 --> 00:29:49,120 Speaker 2: debt is that Musk says, f this, I'm done. I'm 606 00:29:49,120 --> 00:29:51,280 Speaker 2: worth three hundred billion dollars. I don't want to run 607 00:29:51,320 --> 00:29:53,760 Speaker 2: this thing. I've been threatening bankruptcy for a long time. 608 00:29:54,040 --> 00:29:56,720 Speaker 6: Forget it where bankrupt's not happen. 609 00:29:56,720 --> 00:29:58,880 Speaker 5: There was a world where that year ago we were 610 00:29:58,880 --> 00:30:03,400 Speaker 5: talking about world right, now is unfreaking thinkable total because 611 00:30:03,400 --> 00:30:04,840 Speaker 5: for all the things that Sria is saying, for the 612 00:30:04,880 --> 00:30:07,880 Speaker 5: things you're saying, this thing is maybe it's on the rebound, 613 00:30:07,920 --> 00:30:08,400 Speaker 5: maybe it's not. 614 00:30:08,680 --> 00:30:11,760 Speaker 2: But it's certainly useful to Elon Musk now and will 615 00:30:11,760 --> 00:30:14,800 Speaker 2: be useful to Elon Musk in the foreseeable future. There's 616 00:30:14,840 --> 00:30:17,040 Speaker 2: no universe where he's gonna walk away from it. And 617 00:30:17,400 --> 00:30:20,120 Speaker 2: you have the fact that like every anything that's even 618 00:30:20,200 --> 00:30:23,600 Speaker 2: like kind of tangentially connected to Trump or Trump vibes 619 00:30:23,800 --> 00:30:27,240 Speaker 2: has seen like a fifty percent increase in its valuation 620 00:30:27,400 --> 00:30:30,360 Speaker 2: or more, and so like, clearly this thing is is 621 00:30:30,400 --> 00:30:32,600 Speaker 2: on the come up in terms of its value, in 622 00:30:32,680 --> 00:30:35,160 Speaker 2: terms of its lasting power and so on, even if 623 00:30:35,280 --> 00:30:37,680 Speaker 2: like the revenue is not there, and I don't think 624 00:30:37,720 --> 00:30:39,080 Speaker 2: the revenue looks great with. 625 00:30:39,160 --> 00:30:42,360 Speaker 4: The business rebounding, What is important is you don't need 626 00:30:42,400 --> 00:30:45,800 Speaker 4: to sell to investors an equity investor leg dream. You 627 00:30:45,840 --> 00:30:47,960 Speaker 4: don't need to say that something that's well one hundred 628 00:30:47,960 --> 00:30:51,480 Speaker 4: dollars today will be one hundred back then. You just 629 00:30:51,520 --> 00:30:54,080 Speaker 4: need a principle that's all that that investors care about. 630 00:30:54,320 --> 00:30:57,560 Speaker 4: So from that perspective, things that are improving. From that perspective, 631 00:30:57,680 --> 00:31:01,480 Speaker 4: the Trump linkage, the Trump halo is helpful. And then 632 00:31:01,520 --> 00:31:05,600 Speaker 4: there's this complete wild factor here of what we now 633 00:31:05,720 --> 00:31:09,280 Speaker 4: know as Xai Corp. Two years ago, that is Elon 634 00:31:09,440 --> 00:31:12,880 Speaker 4: Musk's artificial intelligence startup. We have been caught in this 635 00:31:13,000 --> 00:31:16,720 Speaker 4: cycle of craze in the AI world that has drawn 636 00:31:16,800 --> 00:31:20,200 Speaker 4: all sorts of investors to it. Now, what has happened 637 00:31:20,280 --> 00:31:23,800 Speaker 4: is Xai and x have a lot of interconnections. It 638 00:31:23,840 --> 00:31:26,440 Speaker 4: has trained its models off of the data set on 639 00:31:26,640 --> 00:31:29,760 Speaker 4: x use the chips and service and instead of paying 640 00:31:29,880 --> 00:31:31,160 Speaker 4: money like you. 641 00:31:31,120 --> 00:31:33,800 Speaker 6: Would do another intercompany border. 642 00:31:33,840 --> 00:31:35,960 Speaker 4: So the barter almost in this case is x has 643 00:31:35,960 --> 00:31:40,280 Speaker 4: gotten an equity stake in Xai, and like all things Ai, 644 00:31:40,480 --> 00:31:43,120 Speaker 4: in a span of two years that stake that x 645 00:31:43,120 --> 00:31:45,920 Speaker 4: has an Xai has become quite valuable. 646 00:31:46,160 --> 00:31:49,720 Speaker 3: Reports say that Xai is that awesome man. Look. 647 00:31:49,840 --> 00:31:53,640 Speaker 4: Last valuation for Xai is roughly fifty billion dollars. Now 648 00:31:53,680 --> 00:31:57,320 Speaker 4: we've reported this, which gives x is excess take in 649 00:31:57,440 --> 00:31:59,160 Speaker 4: Xai is about six billion dollars. 650 00:31:59,480 --> 00:32:03,160 Speaker 3: So if you're a banker trying to get rid of 651 00:32:03,200 --> 00:32:05,080 Speaker 3: these loans that have been stuck on your book for 652 00:32:05,120 --> 00:32:08,080 Speaker 3: two years, that is something that you are saying to 653 00:32:08,240 --> 00:32:11,280 Speaker 3: possible buyers of these loans. Hey, by the way, you 654 00:32:12,320 --> 00:32:15,200 Speaker 3: buy this loan from me, you in park get a 655 00:32:15,320 --> 00:32:18,440 Speaker 3: claim or a lean on X, which gets you a 656 00:32:18,520 --> 00:32:20,240 Speaker 3: lean on the great XI. 657 00:32:20,520 --> 00:32:23,640 Speaker 4: So David the optimistic banker is going around to all 658 00:32:23,640 --> 00:32:26,880 Speaker 4: the investors and saying, not just improving fundamentals in the 659 00:32:26,880 --> 00:32:28,880 Speaker 4: business doesn't have to go to the peak levels of 660 00:32:29,320 --> 00:32:33,160 Speaker 4: where Twitter was, but X has seen its business rebound. 661 00:32:33,400 --> 00:32:35,800 Speaker 4: But on top of that, what you will have a 662 00:32:35,880 --> 00:32:38,080 Speaker 4: lean on that is, if you're a secure investor, if 663 00:32:38,080 --> 00:32:41,080 Speaker 4: you're someone who has collateral against the money that you're 664 00:32:41,120 --> 00:32:43,840 Speaker 4: lending to this company, you will have a claim on 665 00:32:44,360 --> 00:32:47,680 Speaker 4: X is stick in XAI, which is worth six billion. 666 00:32:48,160 --> 00:32:52,320 Speaker 4: So take whatever earnings X has, apply an eight times, 667 00:32:52,400 --> 00:32:54,760 Speaker 4: nine times, ten times multiple, whatever's the going right in 668 00:32:54,760 --> 00:32:57,959 Speaker 4: the market. On top of that, add the value of 669 00:32:58,000 --> 00:33:00,640 Speaker 4: this stick and then see that the loan that you're 670 00:33:00,680 --> 00:33:02,960 Speaker 4: putting up, what is the loan to value? Is that 671 00:33:03,040 --> 00:33:06,000 Speaker 4: about fifty percent sixty percent? At that rate, it will 672 00:33:06,080 --> 00:33:08,320 Speaker 4: draw in a lot of people. Again, we don't know 673 00:33:08,320 --> 00:33:10,960 Speaker 4: if it's a done deal. We know there's a lot of. 674 00:33:11,080 --> 00:33:13,040 Speaker 3: Have they sold any of it? Have they sold any 675 00:33:13,080 --> 00:33:13,880 Speaker 3: of these loans? Yet? 676 00:33:14,120 --> 00:33:15,920 Speaker 4: They sold a small piece. They went out there and 677 00:33:15,960 --> 00:33:17,280 Speaker 4: sold about a billion dollars of day. 678 00:33:17,640 --> 00:33:20,280 Speaker 3: Do they is their plan among these different banks to 679 00:33:20,320 --> 00:33:22,280 Speaker 3: sell all thirteen billion or they I think the. 680 00:33:22,200 --> 00:33:23,960 Speaker 4: Goal will be, of course, to get that. I don't 681 00:33:23,960 --> 00:33:26,960 Speaker 4: think all thirteen billion gets off their balance sheet anytime soon, 682 00:33:27,360 --> 00:33:30,320 Speaker 4: but you know, you start one is off, another three 683 00:33:30,400 --> 00:33:32,280 Speaker 4: three and a half in the coming few weeks. It 684 00:33:32,400 --> 00:33:34,480 Speaker 4: at least sets the stage for a lot more to 685 00:33:34,480 --> 00:33:35,160 Speaker 4: be done. 686 00:33:34,920 --> 00:33:36,720 Speaker 3: Which, by the way, mact, if that's right, that would 687 00:33:36,760 --> 00:33:39,240 Speaker 3: be more or less in line with your everything in 688 00:33:39,280 --> 00:33:42,800 Speaker 3: the must complexes up fifty percent now since the election. 689 00:33:43,200 --> 00:33:46,760 Speaker 2: People shouldn't listen to this podcast, you know, we would 690 00:33:46,760 --> 00:33:50,440 Speaker 2: we call this like months ago of the podcast. 691 00:33:50,600 --> 00:33:53,560 Speaker 4: Well, I am an ardent listener of everything you said 692 00:33:53,840 --> 00:33:54,640 Speaker 4: podcast or not. 693 00:33:54,800 --> 00:33:56,360 Speaker 2: The other thing I'll say is like I don't think 694 00:33:56,360 --> 00:34:00,520 Speaker 2: the valuation fifty billion or whatever for Xi Xai crazy 695 00:34:00,560 --> 00:34:04,160 Speaker 2: given open AIS valuation, which is something you know, it 696 00:34:04,200 --> 00:34:06,640 Speaker 2: was like one hundred and fifty two hundred billion dollars 697 00:34:06,880 --> 00:34:09,880 Speaker 2: somewhere in that in that range. But like we are 698 00:34:09,920 --> 00:34:13,520 Speaker 2: in the middle of an extremely frothy period here, we're 699 00:34:13,520 --> 00:34:17,560 Speaker 2: also living through a sudden kind of re evaluation of 700 00:34:17,760 --> 00:34:19,719 Speaker 2: just how much those things are worth. I mean, if 701 00:34:19,760 --> 00:34:23,280 Speaker 2: deep Seek does everything that all the people are excited 702 00:34:23,320 --> 00:34:25,799 Speaker 2: about it believe it's gonna do, that's gonna really hurt 703 00:34:25,840 --> 00:34:27,879 Speaker 2: open AI's business. Open A is not gonna be worth 704 00:34:27,920 --> 00:34:32,160 Speaker 2: as much, and frankly, x Ai probably be worth the whole. 705 00:34:32,000 --> 00:34:35,400 Speaker 3: Complex has gotta has gotta be devalued quite a bit, 706 00:34:35,400 --> 00:34:37,600 Speaker 3: which is what we saw in the stock market yesterday. 707 00:34:37,840 --> 00:34:40,560 Speaker 3: I mean, you could argue obviously ultimately really good for 708 00:34:40,600 --> 00:34:43,680 Speaker 3: the broader economy and really good if you can suddenly 709 00:34:43,719 --> 00:34:46,080 Speaker 3: access this technology deep That. 710 00:34:46,080 --> 00:34:48,960 Speaker 2: Said, like in certain ways, Xai is a little bit 711 00:34:49,040 --> 00:34:51,200 Speaker 2: like deep Seek in the sense that this is something 712 00:34:51,239 --> 00:34:52,840 Speaker 2: that Elon kind of slapped together. 713 00:34:52,920 --> 00:34:55,279 Speaker 6: Remember like when this was launching, he had like, you know, 714 00:34:55,280 --> 00:34:57,680 Speaker 6: it seemed like a handle of engineers. 715 00:34:57,840 --> 00:34:59,960 Speaker 3: Audio clips of uh, you know react. 716 00:35:00,320 --> 00:35:02,759 Speaker 2: In a matter of months, he he did manage to 717 00:35:02,800 --> 00:35:06,040 Speaker 2: build something that like, is I don't know, is it 718 00:35:06,080 --> 00:35:07,520 Speaker 2: as good as chatch ebt? 719 00:35:07,760 --> 00:35:08,319 Speaker 3: Probably not? 720 00:35:08,840 --> 00:35:11,240 Speaker 2: Is it? Does it get pretty close to how most 721 00:35:11,239 --> 00:35:13,480 Speaker 2: people use that chatbot? 722 00:35:13,560 --> 00:35:14,520 Speaker 6: Yeah, probably does. 723 00:35:14,600 --> 00:35:17,080 Speaker 2: And so so in that sense, like this is maybe 724 00:35:17,239 --> 00:35:20,160 Speaker 2: arguably another sort of lower cost chappot that is also 725 00:35:20,560 --> 00:35:23,840 Speaker 2: eating away at open Ais. You know, potential, you know, 726 00:35:23,920 --> 00:35:24,719 Speaker 2: market share. 727 00:35:28,880 --> 00:35:30,879 Speaker 3: Before we let you go, just to ask you, because 728 00:35:30,880 --> 00:35:34,080 Speaker 3: you're a star banking reporter for US here, are you 729 00:35:34,200 --> 00:35:37,120 Speaker 3: ready to bank on X? Are you gonna do your 730 00:35:37,160 --> 00:35:37,720 Speaker 3: Are you gonna? 731 00:35:38,960 --> 00:35:43,279 Speaker 2: Because just made a face. I almost don't even know 732 00:35:43,320 --> 00:35:44,160 Speaker 2: how to It. 733 00:35:44,120 --> 00:35:44,480 Speaker 3: Seems like. 734 00:35:47,800 --> 00:35:50,560 Speaker 6: I'm not even gonna deign to respond to that question. 735 00:35:51,080 --> 00:35:53,480 Speaker 3: Max tell us, tell us about the news today. 736 00:35:53,600 --> 00:35:56,279 Speaker 2: The news is that X has a banking partner X, 737 00:35:56,320 --> 00:35:59,120 Speaker 2: the Everything app, which you know again from the jump, 738 00:35:59,120 --> 00:36:02,000 Speaker 2: basically with the take over, Musk has said he wants 739 00:36:02,040 --> 00:36:04,680 Speaker 2: this to be basically like a we chat, so there 740 00:36:04,719 --> 00:36:07,680 Speaker 2: would be banking on this, there be all sorts of things. 741 00:36:08,280 --> 00:36:11,360 Speaker 2: X has some sort of partnership with Visa that is 742 00:36:11,400 --> 00:36:13,960 Speaker 2: going to allow you to at least maybe send money 743 00:36:14,440 --> 00:36:19,520 Speaker 2: on X. Finally, after two years, everyone's been collamoring for this. 744 00:36:19,719 --> 00:36:22,600 Speaker 2: I mean, I actually don't think anyone has, but of 745 00:36:22,600 --> 00:36:24,839 Speaker 2: course except for Elon Musk, because he sees this as 746 00:36:24,880 --> 00:36:28,120 Speaker 2: a potential way to expand the utility of this app. 747 00:36:28,320 --> 00:36:31,280 Speaker 4: And all I would say is, don't dismiss it offhand, 748 00:36:31,440 --> 00:36:33,960 Speaker 4: because for a while, the chatter and the talk in 749 00:36:34,000 --> 00:36:36,720 Speaker 4: the banking sector, in the banking world, the Jamie Diamonds 750 00:36:36,719 --> 00:36:38,640 Speaker 4: of the world have talked about this idea, the specter 751 00:36:38,800 --> 00:36:42,719 Speaker 4: of tech companies with hundreds of millions of customers and 752 00:36:42,800 --> 00:36:46,239 Speaker 4: whilst amount of resources at their disposal, having the ability 753 00:36:46,280 --> 00:36:49,120 Speaker 4: to create a competitive mode where they can actually compete 754 00:36:49,280 --> 00:36:52,160 Speaker 4: against banks. They have the technology, they have the platform, 755 00:36:52,200 --> 00:36:55,040 Speaker 4: they have the users, and find a banking partner and 756 00:36:55,080 --> 00:36:58,239 Speaker 4: suddenly you can have an Apple credit card, you can 757 00:36:58,320 --> 00:37:01,279 Speaker 4: have a fintech that sits inside Walmart, and you can 758 00:37:01,280 --> 00:37:04,399 Speaker 4: have X Money where you are, you know, zipping money 759 00:37:04,400 --> 00:37:07,680 Speaker 4: back and forth between users on that social media platform. 760 00:37:07,800 --> 00:37:11,040 Speaker 4: So it certainly has value and potential. Now can Elon 761 00:37:11,640 --> 00:37:13,600 Speaker 4: drive up the hype and the hoopla around it to 762 00:37:13,600 --> 00:37:16,959 Speaker 4: convince people to actually partake And the answer is knowing 763 00:37:17,000 --> 00:37:21,040 Speaker 4: Elon and knowing his legions followers. It's quite possible that happens, 764 00:37:21,239 --> 00:37:24,239 Speaker 4: and if that takes off, that will be another crucial 765 00:37:24,320 --> 00:37:26,879 Speaker 4: leg to the X story that will make it more 766 00:37:26,920 --> 00:37:29,480 Speaker 4: appealing to invest These loans. 767 00:37:29,200 --> 00:37:31,400 Speaker 3: Aren't worth ninety ninety five. You're saying these loans are 768 00:37:31,400 --> 00:37:33,239 Speaker 3: worth one hundred and ten cents onund the hour. That's 769 00:37:33,239 --> 00:37:33,920 Speaker 3: what you're telling me. 770 00:37:33,960 --> 00:37:36,520 Speaker 2: Can I just say, first of all, by now I'm 771 00:37:36,520 --> 00:37:40,000 Speaker 2: saying this just purely as a long time Twitter user, 772 00:37:40,040 --> 00:37:43,600 Speaker 2: someone who's been on this thing forever. No One, no 773 00:37:43,640 --> 00:37:46,600 Speaker 2: one wants to trust this thing with their money, Like 774 00:37:47,040 --> 00:37:51,120 Speaker 2: I barely trust it with my like bad jokes and 775 00:37:51,360 --> 00:37:54,239 Speaker 2: and and that has been true before and after Elon 776 00:37:54,320 --> 00:37:57,040 Speaker 2: Musk bought a bought it. I mean, there's some universe, right, 777 00:37:57,120 --> 00:37:59,960 Speaker 2: the Elon Musk is a great market or whatever. Maybe 778 00:38:00,040 --> 00:38:02,840 Speaker 2: he somehow convinces people, but you're starting from a very 779 00:38:02,880 --> 00:38:05,520 Speaker 2: poor base, which is this is not an app that 780 00:38:05,640 --> 00:38:09,640 Speaker 2: is like broadly trusted with anything other than to entertain. 781 00:38:09,800 --> 00:38:12,120 Speaker 3: Oh no, And that is a good point, and we 782 00:38:12,160 --> 00:38:14,880 Speaker 3: will end on that. The only thing I'll say, though, 783 00:38:15,560 --> 00:38:17,160 Speaker 3: because I don't want to. I don't want Tree to 784 00:38:17,200 --> 00:38:23,120 Speaker 3: leave here totally dispirited. Is his point on not dismissing 785 00:38:23,200 --> 00:38:25,799 Speaker 3: something that Musk has come up with. I think it's fair. 786 00:38:25,920 --> 00:38:28,160 Speaker 3: We've learned the hard way not to out of hand 787 00:38:28,200 --> 00:38:29,960 Speaker 3: dismiss anything he dials up. 788 00:38:30,360 --> 00:38:30,839 Speaker 6: That's true. 789 00:38:30,880 --> 00:38:33,320 Speaker 2: Yeah, And I feel like we actually have all along 790 00:38:33,480 --> 00:38:37,200 Speaker 2: been been articulating on this podcast saying that you know, 791 00:38:37,280 --> 00:38:39,160 Speaker 2: this X thing, there are ways that it can make. 792 00:38:39,040 --> 00:38:39,520 Speaker 3: The money back. 793 00:38:39,520 --> 00:38:41,359 Speaker 6: We've been talking about this AI thing for like a year. 794 00:38:41,520 --> 00:38:43,120 Speaker 4: I'm glad we all end an agreement. 795 00:38:43,600 --> 00:38:46,040 Speaker 3: I don't know about that tree. Thanks for joining us. 796 00:38:46,640 --> 00:38:49,719 Speaker 3: Thank you, Max Greator is always pleasure to be here. 797 00:38:57,680 --> 00:39:00,800 Speaker 3: This episode was produced by Stacy Wang and Masa Rakas 798 00:39:00,840 --> 00:39:03,640 Speaker 3: is our editor, and Rayhan Harmansi, our senior editor. The 799 00:39:03,800 --> 00:39:07,600 Speaker 3: idea for this very show also came from Rayhan. Blake 800 00:39:07,640 --> 00:39:11,680 Speaker 3: Maples handles engineering, and Dave Purcell factchecks. Our supervising producer 801 00:39:11,719 --> 00:39:15,040 Speaker 3: is Magnus Henrickson. The elon In theme is written and 802 00:39:15,080 --> 00:39:19,720 Speaker 3: performed by Taka Yasuzawa and Alex Sugiura. Brendan Francis Newnham 803 00:39:19,800 --> 00:39:21,719 Speaker 3: is our executive producer, and Sage Bauman is the head 804 00:39:21,719 --> 00:39:25,080 Speaker 3: of Bloomberg Podcasts. A big thanks to our supporters Joe 805 00:39:25,160 --> 00:39:29,360 Speaker 3: Weber and Bradstone. I'm David Papadopolis. If you have a minute, 806 00:39:29,440 --> 00:39:32,319 Speaker 3: rate and review our show, it'll help other listeners find us. 807 00:39:32,800 --> 00:39:36,960 Speaker 3: See you next week.