WEBVTT - Making Sense of Tesla's Deepening Crisis 0:00:01.040 --> 0:00:04.280 Elon Musk has been costing Tesla investors quite a lot 0:00:04.320 --> 0:00:09.200 of money lately. Tesla stock has lost of its value 0:00:09.320 --> 0:00:12.680 in a little over six weeks. That's about fourteen billion 0:00:12.720 --> 0:00:16.840 dollars of value wiped out, all because of a single tweet, 0:00:17.960 --> 0:00:20.479 Breaking news, real quick on Elon Musk. Uh It's a 0:00:20.520 --> 0:00:24.440 tweet from Mr Musk. He's considering taking Tesla privates. How 0:00:24.440 --> 0:00:27.760 about that, he's considering taking Tesla private at four and 0:00:27.800 --> 0:00:31.600 twenty dollars a share. This week, we're bringing you a 0:00:31.680 --> 0:00:35.360 special breaking news episode about everything that's gone on at 0:00:35.360 --> 0:00:52.360 Tesla since that tweet was sent. Hi, I'm brad Stone, 0:00:52.800 --> 0:00:56.600 And this week on Decrypted, we're taking a look at 0:00:56.640 --> 0:01:02.280 Tesla's current predicament. Elon Musk is a singular CEO, unfiltered 0:01:02.480 --> 0:01:07.039 and unscripted. Now that strategy could have big implications for 0:01:07.080 --> 0:01:10.360 the future of the company. Tesla is facing not one, 0:01:10.400 --> 0:01:13.800 but two government investigations from the SEC and the Department 0:01:13.840 --> 0:01:16.200 of Justice. We'll see how Tesla got here and what 0:01:16.240 --> 0:01:18.040 it needs to do to get out. This is part 0:01:18.080 --> 0:01:20.880 of a special season of Decrypted, where we explore the 0:01:21.000 --> 0:01:34.920 unintended consequences of technology. Stay with us, so Dana let's 0:01:34.920 --> 0:01:38.440 go back to the innocent days of early August, precisely 0:01:38.800 --> 0:01:42.160 August seven. You had just gotten back from vacation, if 0:01:42.200 --> 0:01:45.640 I remember, and that is the day, that fateful day 0:01:45.640 --> 0:01:50.600 that Elon tweets quote a considering taking Tesla private at 0:01:50.640 --> 0:01:58.680 four funding secured. You have a quick reaction that at 0:01:58.720 --> 0:02:00.640 first people thought that it was a joke, and so 0:02:00.680 --> 0:02:03.800 there was all these internal conversations here at Bloomberg about 0:02:04.200 --> 0:02:07.840 was he hacked? This is this a marijuana reference, like right, 0:02:07.880 --> 0:02:13.560 because as some significance in marijuana culture, and um, you 0:02:13.560 --> 0:02:16.680 know Tesla's PR team, they don't control his tweets. He 0:02:16.720 --> 0:02:20.240 doesn't have a tweet ghostwriter. Um. And my understanding now 0:02:20.320 --> 0:02:21.919 is that he was actually on a plane at the time, 0:02:21.960 --> 0:02:23.840 so no one at Tesla PR could actually get a 0:02:23.840 --> 0:02:26.920 hold of him. So we just assumed that it was true. 0:02:26.960 --> 0:02:28.960 But the crazy thing was that the stock started to 0:02:29.000 --> 0:02:32.720 explode higher than trading stopped, and no one could figure 0:02:32.760 --> 0:02:35.080 out what was going on, And there was kind of 0:02:35.160 --> 0:02:38.639 confidence that maybe Tesla and Ellen had put the kind 0:02:38.639 --> 0:02:41.880 of volatility of Tesla stock behind it, like as a 0:02:41.960 --> 0:02:45.280 private company wouldn't be as susceptible to the hated shorts right, 0:02:45.360 --> 0:02:47.600 which he has campaigned against for so long. Yeah, and 0:02:47.680 --> 0:02:50.520 Musk has talked quite openly for for years now about 0:02:50.520 --> 0:02:53.760 wishing that Tesla was private, SpaceX is private. Um. The 0:02:53.800 --> 0:02:56.480 volatility of the short sellers drives him bananas. He's always 0:02:56.480 --> 0:02:59.160 talking about burning the shorts. So it definitely seemed legitimate. 0:02:59.200 --> 0:03:01.239 And remember that was the day also that the Financial 0:03:01.280 --> 0:03:04.240 Times reported that the Saudis had taken some kind of 0:03:04.240 --> 0:03:06.880 stake in the company. So the go private tweet was 0:03:06.880 --> 0:03:09.160 sort of seen as a reaction to that. And but 0:03:09.280 --> 0:03:12.400 you know, it struck me immediately as odd because you know, 0:03:12.480 --> 0:03:15.880 there's no more of a material announcement than the fact 0:03:15.919 --> 0:03:18.359 that you know, a public company might be going private. 0:03:18.600 --> 0:03:21.240 And yet he had tweeted it right, not you know, 0:03:21.360 --> 0:03:24.280 not a filing with the SEC, not a press release 0:03:24.720 --> 0:03:27.320 from your reporting, Like how unusual was that? And who 0:03:27.360 --> 0:03:31.800 else that Tesla knew about this? It was pretty unusual. Um, 0:03:31.840 --> 0:03:33.520 And I don't think anyone that Tesla knew about it. 0:03:33.520 --> 0:03:35.240 I mean that was sort of one of my brain questions, like, 0:03:35.360 --> 0:03:37.120 so who on the executive team, you know, what did 0:03:37.120 --> 0:03:38.840 they know and when did they know it? Now it 0:03:38.920 --> 0:03:40.960 kind of appears that no one really knew. I think 0:03:40.960 --> 0:03:44.400 everybody was blindsided by it, even the board, his executives, 0:03:44.400 --> 0:03:48.440 the board, large institutional investors, and now in the ensuing days, 0:03:48.480 --> 0:03:51.840 there's kind of a scramble, uh to to document like 0:03:51.880 --> 0:03:55.320 who is advisors? Right? And we report that both Goldman 0:03:55.400 --> 0:03:58.200 and Morgan Stanley are like involved in this deal, so 0:03:58.240 --> 0:04:00.520 it seems legitimate at this point, right. Yeah. I think 0:04:00.640 --> 0:04:03.440 for first, the sort of narrative arc went from this, 0:04:03.440 --> 0:04:05.520 this is crazy, he must have gotten hacked, or he's 0:04:05.560 --> 0:04:08.920 joking too, Wow, Elon is going private? Okay, who's involved? 0:04:08.920 --> 0:04:11.480 And there was this appearance of forward momentum. We were 0:04:11.520 --> 0:04:13.920 hearing from bankers that they were meeting with Elon, that 0:04:13.960 --> 0:04:15.560 they were flying to l A to meet with him. 0:04:15.840 --> 0:04:17.880 People kind of felt like, well, if anyone can pull 0:04:17.920 --> 0:04:19.240 this off, it's him. I mean, this is a man 0:04:19.279 --> 0:04:21.880 who's been able to raise billions of dollars from the 0:04:21.880 --> 0:04:24.640 capital markets, has a lot of long term, long horizon 0:04:24.680 --> 0:04:27.719 investors on his side. SpaceX has had a great year. 0:04:27.839 --> 0:04:30.240 You know, Tesla has had challenges with the Model three, 0:04:30.279 --> 0:04:32.440 but it's still this wildly popular brand. I mean, there 0:04:32.480 --> 0:04:35.159 was kind of a sense that Ellen could potentially do 0:04:35.240 --> 0:04:37.920 this right and ironically, we had just written a cover 0:04:38.000 --> 0:04:42.000 story which you co authored, about the scramble to meet 0:04:42.040 --> 0:04:45.400 the Model three production goals. Uh. Great headline Hell for 0:04:45.480 --> 0:04:48.960 Elon Musk is a mid sized sedan and documented you know, 0:04:49.160 --> 0:04:52.200 his sleeping at the at the factory and and rushing 0:04:52.240 --> 0:04:54.760 to meet these goals. And he had hit the numbers right. 0:04:54.800 --> 0:04:56.480 I mean, there was there was a quarter where they 0:04:56.520 --> 0:04:59.599 met met the Wall Street shade finally kind of got 0:04:59.600 --> 0:05:01.760 into this state where they had, you know, even though 0:05:01.800 --> 0:05:04.200 they had to build a tent and like manufacture production 0:05:04.240 --> 0:05:06.360 line at the last minute, they were kind of at 0:05:07.040 --> 0:05:09.080 there was a feeling that they had finally exited production 0:05:09.120 --> 0:05:10.800 hell and that the cars were coming out, and you 0:05:10.839 --> 0:05:12.280 started to see more cars on the road here in 0:05:12.320 --> 0:05:17.280 California for sure. A little more than two weeks after 0:05:17.360 --> 0:05:22.880 the initial funding is secured tweet, Elon admits that in fact, 0:05:23.120 --> 0:05:27.160 funding was not really secured. This was a Friday night 0:05:27.160 --> 0:05:29.359 news dump, but late at night is when the company 0:05:29.560 --> 0:05:33.159 posted a blog post from Elon Musk essentially saying we're 0:05:33.160 --> 0:05:36.000 going to be staying a publicly traded company and here's 0:05:36.040 --> 0:05:37.760 the reasons why we're not going to go into all 0:05:37.800 --> 0:05:40.960 of them. Take us through what happened then. So that 0:05:41.080 --> 0:05:43.200 was really late on a Friday night, like so late 0:05:43.240 --> 0:05:45.160 that I don't know if East Coast Newspaper has made 0:05:45.160 --> 0:05:48.799 their deadlines. The thing that was remarkable about the blog 0:05:48.839 --> 0:05:51.599 post is that he basically admitted that all of the 0:05:51.640 --> 0:05:54.279 investors were not on board with the idea and that 0:05:54.360 --> 0:05:57.160 the prevailing sentiment was pleased, don't do this, which was 0:05:57.240 --> 0:06:00.320 completely contradictory to what he had said previously, because not 0:06:00.360 --> 0:06:02.200 only did he say that funding was secured, but he 0:06:02.279 --> 0:06:05.680 was like, shareholders are on board and there's consensus and 0:06:05.680 --> 0:06:07.279 it just needs to go before a vote. So he 0:06:07.320 --> 0:06:11.200 was really contradicting himself in a way that was pretty remarkable. 0:06:11.480 --> 0:06:12.880 Very quickly, it was like, all right, so when is 0:06:12.920 --> 0:06:15.680 the first shareholder lawsuit? And you know, he pulled the 0:06:15.680 --> 0:06:18.039 plug on a Friday. Within a week we had the 0:06:18.080 --> 0:06:21.599 first of now several shareholder lawsuits filed that are that 0:06:21.640 --> 0:06:24.000 are attempting to get class action status, right, and then 0:06:24.040 --> 0:06:26.960 the sec comes in, right, and they served Tesla with 0:06:26.960 --> 0:06:29.760 a subpoena, and the SECS interest is they're looking at 0:06:29.880 --> 0:06:32.600 you know, when did he send the tweet? Who knew it? Did? 0:06:32.920 --> 0:06:36.479 Was anyone involved? Did his board or his executives or 0:06:36.520 --> 0:06:38.960 large investors have any heads up that this was coming. Well, 0:06:39.000 --> 0:06:41.680 if nobody traded on the information is that, you know 0:06:41.720 --> 0:06:44.400 it has a crime been committed? I think that's really 0:06:44.440 --> 0:06:46.280 that's a really good question. I mean, the short sellers 0:06:46.279 --> 0:06:49.080 would certainly argue that they were hurt, But how the 0:06:49.200 --> 0:06:56.039 SEC views that. I'm not entirely sure. Then we we 0:06:56.120 --> 0:07:01.040 come into early September, September six and Ellen, after this 0:07:01.080 --> 0:07:04.000 plan has been scrapped and and Tesla sort of still 0:07:04.080 --> 0:07:08.280 wobbly from all of these lawsuits and the investigation. All 0:07:08.360 --> 0:07:11.200 this sort of negative attention is placed on the company. 0:07:11.360 --> 0:07:16.960 Ellen goes on a podcast called The Joe Rogan Experience. Boom, 0:07:16.960 --> 0:07:19.679 thank you, thanks for doing this, man, I really appreciate it. Hey, welcome, 0:07:19.680 --> 0:07:21.480 It's very good to meet you. Nice to meet you too, 0:07:21.480 --> 0:07:24.960 and thanks for not lighting this place on fire. You're welcome. 0:07:25.480 --> 0:07:27.960 How does one um just in the middle of doing 0:07:28.040 --> 0:07:33.000 all the things you do create cars? Rockets has a 0:07:33.120 --> 0:07:36.880 very profound conversation about very weighty issues. Is life of 0:07:36.960 --> 0:07:40.480 simulation things things like that, the future of electric cars, 0:07:40.520 --> 0:07:43.320 But all the attention is captured by the fact that 0:07:43.520 --> 0:07:53.240 he smokes marijuana on this video podcast says that a joint. Okay, 0:07:53.480 --> 0:07:57.680 it's um marijuana inside of tobacco. Okay, so it's like 0:07:57.720 --> 0:08:01.040 pot tobacco. Never had that. I think I tried one once. 0:08:01.240 --> 0:08:07.720 Come on, man, you probably can't because stockholders, right. I mean, 0:08:07.760 --> 0:08:11.360 it's legal, right, totally legal. Okay? How does that work? 0:08:11.640 --> 0:08:13.640 Do people get upset at you if you do certain things? 0:08:15.480 --> 0:08:18.400 Just tobacco and marijuana in there, that's all it is. 0:08:19.080 --> 0:08:21.880 Musk has you know, talked openly in the past about 0:08:21.920 --> 0:08:24.480 mixing red wine and ambient In this very cheerful New 0:08:24.560 --> 0:08:26.320 York Times interview that came in the middle of the 0:08:26.320 --> 0:08:29.520 Go Private drama, you know, the Times reported that he 0:08:29.600 --> 0:08:32.080 was not sleeping well, that there was concerns about recreational 0:08:32.120 --> 0:08:35.080 drug use, and so this whole narrative around his mental 0:08:35.120 --> 0:08:37.959 health and his potential substance use and abuse was sort 0:08:37.960 --> 0:08:41.120 of out there. So you think, okay, he's pulled the plug. 0:08:41.360 --> 0:08:43.520 You know, you would think that he would know better 0:08:43.640 --> 0:08:46.040 than to smoke pot at this particular juncture. Well, see, 0:08:46.080 --> 0:08:48.719 I just wonder if he's trolling us with this, right 0:08:48.800 --> 0:08:50.800 he just because to go back to, you know, the 0:08:50.800 --> 0:08:54.240 point we made earlier. He's unscripted, he's unfiltered, you know, 0:08:54.320 --> 0:08:57.079 in a way he depends on the media. But maybe 0:08:57.080 --> 0:08:59.959 he doesn't really care about how he's portrayed. Of course 0:09:00.120 --> 0:09:02.600 he cares too much, right, because he's so obsessed with it. 0:09:02.960 --> 0:09:05.520 But it is in a way, is he poking a 0:09:05.559 --> 0:09:08.120 finger in the eye of everyone who is so absorbed 0:09:08.160 --> 0:09:11.480 by his behavior and his communication during this period? Well, right, 0:09:11.480 --> 0:09:14.160 And then the conspiracy theories, theorists will have you believe 0:09:14.240 --> 0:09:16.400 so that so he smokes pot late on a Thursday night. 0:09:16.440 --> 0:09:19.160 The next morning, it's like, oh my god, musk smoke pot, Like, 0:09:19.200 --> 0:09:21.280 this is so crazy. But then that same day they 0:09:21.280 --> 0:09:23.040 filed an a K in which they revealed that their 0:09:23.080 --> 0:09:26.720 chief accounting officer had resigned. So the stock started to tank, 0:09:26.800 --> 0:09:28.880 and it's like, well, it's the stock tanking because the 0:09:28.880 --> 0:09:32.280 CEO smoke potter? Is it tanking because a finance executive quit? 0:09:32.559 --> 0:09:35.320 So the theorists, the conspiracy there is believe that musts 0:09:35.520 --> 0:09:38.640 smoked pot specifically knowing that the media would then talk 0:09:38.640 --> 0:09:42.280 about the pot and ignore the fact. Very trump Like, 0:09:42.440 --> 0:09:46.560 isn't it a little twitter or orchestrated misdirection? Yeah? And 0:09:46.559 --> 0:09:48.040 and you know, and I mean there's been a lot 0:09:48.080 --> 0:09:50.040 of parallels to Trump, just in terms of his use 0:09:50.040 --> 0:09:52.320 of Twitter and and the passion of his base. About 0:09:52.320 --> 0:09:55.560 a week after he smokes pot on the Joe Rogan podcast, 0:09:56.000 --> 0:10:01.720 our colleagues report that the Department Justice has opened a 0:10:01.800 --> 0:10:04.679 criminal investigation. Here is the latest in terms of the 0:10:04.760 --> 0:10:08.280 d o J probe of Tesla. You saw Kate Kelly 0:10:08.280 --> 0:10:10.720 on about fifteen twenty minutes ago talking about the fact 0:10:10.720 --> 0:10:13.439 that Goldmen and silver Lake have also been subpoeneded. Here 0:10:13.600 --> 0:10:16.720 the focus is on Elon musk Sweet in early August 0:10:16.800 --> 0:10:19.400 when he said, so, this is on top of the 0:10:19.520 --> 0:10:23.400 SEC subpoenas, on top of these, um, you know, these 0:10:23.440 --> 0:10:28.640 these more formal shareholder lawsuits, um a criminal investigation because 0:10:28.679 --> 0:10:31.120 what does that mean? And does somebody go to jail 0:10:31.280 --> 0:10:33.800 if if, if you know, the Department of Justice finds 0:10:33.840 --> 0:10:35.959 evidence of criminality. Well, I think I think it's still 0:10:36.080 --> 0:10:38.800 very early stages and we shouldn't, you know, shouldn't should 0:10:38.840 --> 0:10:41.000 let the investigation play out. But it certainly is like 0:10:41.040 --> 0:10:44.320 another It's like another friend. Right. My understanding is that 0:10:44.360 --> 0:10:46.440 you know, the SEC kind of plods along and if 0:10:46.520 --> 0:10:49.000 they see anything that seems criminal, they flag it to 0:10:49.000 --> 0:10:50.920 their colleagues at the DOJ, and then the d o 0:10:51.000 --> 0:10:54.040 J opens its own inquiry. You know, we're not under 0:10:54.040 --> 0:10:57.559 the impression that like FBI agents and like Blue Windbreakers 0:10:57.559 --> 0:11:00.240 were like pounding on Elon's door and like hauling away computers. 0:11:00.320 --> 0:11:04.240 But it does seem like the investigation is considering is 0:11:04.280 --> 0:11:07.679 continuing now there. You know, there's multiple investigations on multiple fronts. 0:11:07.720 --> 0:11:10.480 And what was striking about our colleagues report is that, 0:11:11.080 --> 0:11:13.400 you know, TESLA basically then put out a statement saying 0:11:13.440 --> 0:11:15.480 that we heard from the Department of Justice last month 0:11:15.520 --> 0:11:17.880 and we're cooperating. So they didn't deny that the Department 0:11:17.880 --> 0:11:20.800 of Justice is involved. There's some you know, splitting of 0:11:20.800 --> 0:11:23.920 hairs about whether it's definitely criminal or civil. When the 0:11:23.920 --> 0:11:26.679 Department of Justice gets involved, it means that there's concerned 0:11:26.679 --> 0:11:29.120 about possible criminal behavior. It doesn't mean that they will 0:11:29.120 --> 0:11:31.840 file charges, doesn't mean that someone's going to jail, but 0:11:31.880 --> 0:11:34.600 it means that there is enough there that they're they're involved. 0:11:34.640 --> 0:11:38.240 And again, what they're investigating is the tweet and and 0:11:38.280 --> 0:11:41.520 the proclamation that funding was secured and then you know, 0:11:41.559 --> 0:11:43.960 which moved the stock price. And then we find out 0:11:43.960 --> 0:11:46.320 two weeks later that you know that that no, no 0:11:46.440 --> 0:12:02.199 such deal ever existed exactly. So, Dana, we've talked about 0:12:02.240 --> 0:12:05.439 these dramatic last few months in the lives of Tesla 0:12:05.559 --> 0:12:09.080 and Elon Musk, and we've talked about the consequences, the 0:12:09.120 --> 0:12:13.120 unintended consequences of this ill conceived tweet from Elon Musk 0:12:13.200 --> 0:12:16.040 that he was had a plan to take Tesla private 0:12:16.080 --> 0:12:18.960 and had funding secured. So let's talk about a little 0:12:18.960 --> 0:12:21.200 bit about what what it all means for Tesla and 0:12:21.240 --> 0:12:24.880 the future of electric vehicles and for Elon Musk's career. 0:12:25.040 --> 0:12:27.400 I mean, do you do you think some of these probes, 0:12:27.440 --> 0:12:31.720 the criminal probe and the shareholder lawsuit are any any 0:12:31.800 --> 0:12:34.040 kind of a turning point for a company that seems 0:12:34.040 --> 0:12:36.360 to have had so many of these kinds of episodes. 0:12:37.040 --> 0:12:39.040 I mean, I guess my question is what how does 0:12:39.120 --> 0:12:42.520 this impact their ability to raise additional capital. Musk has 0:12:42.559 --> 0:12:45.520 a laundry list of projects that he wants to complete, 0:12:45.520 --> 0:12:48.199 a giga factory in China, a Model y cross over, 0:12:48.360 --> 0:12:50.800 the solar roof semi truck. I mean, all of his 0:12:50.840 --> 0:12:52.959 ambitions need more money. And this is a guy who's 0:12:52.960 --> 0:12:55.920 been able to raise money from the capital markets. Hand 0:12:55.920 --> 0:12:58.240 over fist for like over a decade now. But I mean, 0:12:58.240 --> 0:13:00.400 do you really think he'll have a problem if, you know, 0:13:00.520 --> 0:13:02.559 the next time he needs to raise money. I think 0:13:02.600 --> 0:13:04.720 a lot of it rides on how this quarter looks 0:13:04.720 --> 0:13:07.480 in terms of the fundamentals of Tesla's business, which is 0:13:07.800 --> 0:13:10.320 making and selling cars. And so for all the drama 0:13:10.360 --> 0:13:13.600 about Zelia Banks and smoking pot and grimes and this 0:13:13.720 --> 0:13:16.800 tweet and the sec and the do o J like, fundamentally, 0:13:16.880 --> 0:13:19.360 the question, the existential question for Tesla is can they 0:13:19.400 --> 0:13:22.520 become a mass market carmaker? Can they make cars in 0:13:22.600 --> 0:13:25.280 high volume with high quality. And we're gonna find out 0:13:25.320 --> 0:13:27.480 very soon in early October, they're going to release their 0:13:27.520 --> 0:13:30.360 delivery and production figures, and they're they're kind of sounding good. 0:13:30.760 --> 0:13:32.320 You know. I was thinking a little bit about whether 0:13:32.360 --> 0:13:35.160 there had any have been any similar episodes in Silicon 0:13:35.240 --> 0:13:37.840 Valley history. Uh. The one, the one that kind of 0:13:37.880 --> 0:13:41.720 sprang to mind was Steve Jobs at Apple back in 0:13:41.920 --> 0:13:43.719 the early two thousands. He had just come back to 0:13:43.800 --> 0:13:48.120 the company, he had turned it around, and him and 0:13:48.160 --> 0:13:51.080 his his some members of his management team received you know, 0:13:51.160 --> 0:13:54.400 some probably well deserved stock options which they then back 0:13:54.520 --> 0:13:57.800 dated to uh to minimize some of the tax impact. 0:13:58.240 --> 0:14:02.079 You know, Jobs like Ellen maybe uniquely right is it 0:14:02.120 --> 0:14:05.280 was a CEO who you know, was a visionary ahead 0:14:05.280 --> 0:14:08.040 of his time and really didn't care what you know 0:14:08.080 --> 0:14:10.720 the world thought, right, wanted to bend everyone to his 0:14:10.760 --> 0:14:14.320 will and sometimes skirted the rules. Right, So it's different 0:14:14.320 --> 0:14:18.320 than Twitter obviously didn't exist back then. It would be interesting, Uh, 0:14:18.400 --> 0:14:20.200 you know, if we had ever seen what Steve Jobs 0:14:20.240 --> 0:14:22.680 would have been like on on on Twitter, um, he 0:14:22.720 --> 0:14:25.360 probably would have stewed it. But but you know, somewhat, 0:14:26.320 --> 0:14:27.920 I guess what I'm saying is there's a little bit 0:14:27.960 --> 0:14:31.760 of a pattern here among these larger than life Silicon 0:14:31.840 --> 0:14:34.240 Valley figures. The other Jobs comparison is that Jobs was 0:14:34.280 --> 0:14:36.640 also running Pixar at the time, or at one point 0:14:36.640 --> 0:14:39.200 he was simultaneously running both. Definitely he was for years. 0:14:39.200 --> 0:14:41.640 And you know, even though everyone thinks about Musk and Tesla, 0:14:41.760 --> 0:14:44.560 his real passion has always been SpaceX, And like SpaceX 0:14:44.600 --> 0:14:48.000 has had a phenomenally successful year um and has been 0:14:48.040 --> 0:14:51.480 sort of largely drama free. Just on Monday, you know, 0:14:51.560 --> 0:14:54.600 Musk announced he's got this Japanese billionaire ready to pay 0:14:54.640 --> 0:14:57.000 billions of dollars to go to the moon with him, right, 0:14:57.080 --> 0:15:00.800 Yusako Mazawa. And and that's interesting because, uh, you know, 0:15:00.880 --> 0:15:05.960 despite all the turmoil around Elon Musk, it doesn't seem like, uh, 0:15:06.440 --> 0:15:08.680 you know, this particular business man has lost any faith 0:15:08.680 --> 0:15:11.720 in him. I mean, I wonder has Ellen lost any supporters? 0:15:11.760 --> 0:15:14.360 Do you think through these months of turmoil. We'll find 0:15:14.360 --> 0:15:17.200 out when the next thirteen fs are filed whether Lard's 0:15:17.200 --> 0:15:21.640 institutional shareholders have sold off their holdings. Um, you know, 0:15:22.240 --> 0:15:24.720 it's hard to say. I mean, you're not really seeing 0:15:24.800 --> 0:15:27.200 like a lot of public people break with him. I mean, 0:15:27.240 --> 0:15:30.640 analysts like Gene Munster are like, Elon, you should apologize 0:15:30.680 --> 0:15:32.720 to the you know, to the cave rescue team. And 0:15:32.920 --> 0:15:34.400 I mean people are sort of calling on him to 0:15:34.400 --> 0:15:37.920 tone it down. But you're not seeing like a big break. Um. 0:15:37.960 --> 0:15:41.440 I think that people want him to modulate his behavior, 0:15:41.480 --> 0:15:43.960 but I think they fundamentally recognize that Ellen is going 0:15:44.000 --> 0:15:51.240 to be Elon. So before we sat down to record 0:15:51.280 --> 0:15:54.760 this podcast, I put out a request on Twitter, uh 0:15:55.120 --> 0:15:58.240 to to listeners to ask them if they have any 0:15:58.320 --> 0:16:00.600 questions for you, Dana, And we got a bunch of 0:16:01.280 --> 0:16:05.440 good questions. Uh. We got one from a user at 0:16:05.560 --> 0:16:10.000 temper worker um asking about the recent executive departures. Yeah, 0:16:10.000 --> 0:16:11.440 this is sort of an area that I really have 0:16:11.520 --> 0:16:14.320 delved into this year because Tesla is not super transparent 0:16:14.320 --> 0:16:17.000 about what their executive leadership is, you know, unlike an 0:16:17.000 --> 0:16:20.200 Apple or even an Uber. If you go to their website, 0:16:20.520 --> 0:16:23.720 there's no organ charts, so I created one on my own. 0:16:23.800 --> 0:16:26.040 And what's kind of striking is that like fourteen vice 0:16:26.080 --> 0:16:28.120 presidents have left this year and they have not been 0:16:28.160 --> 0:16:32.440 replaced by outside hires. In general, there this sort of um. 0:16:32.480 --> 0:16:34.280 The positions are kind of shuffled around, and more and 0:16:34.280 --> 0:16:36.760 more people are reporting directly to Ellen, so Ellen has 0:16:36.800 --> 0:16:39.000 a lot of direct reports for a CEO who's not 0:16:39.080 --> 0:16:41.920 a full time CEO. And then the people who have 0:16:42.000 --> 0:16:45.040 departed have been really high profile people. John McNeil, who 0:16:45.120 --> 0:16:48.360 was you know, the president of like sales service and Deliveries, 0:16:48.440 --> 0:16:50.960 he left, he's now the CEO at left, Doug Field, 0:16:50.960 --> 0:16:53.680 who was the engineering chief left, he's now back at Apple. 0:16:54.200 --> 0:16:56.200 And there's been this kind of drip drip of pretty 0:16:56.240 --> 0:16:59.600 significant departures at a time when like Tesla should be 0:16:59.640 --> 0:17:02.160 doing pretty well. You know, a company like Tesla at 0:17:02.160 --> 0:17:04.200 this age and its maturity should have like a deep 0:17:04.240 --> 0:17:06.800 bench of talent, and they just don't have that right now. 0:17:07.240 --> 0:17:11.480 A dana. Another Twitter question from a user calling himself 0:17:11.520 --> 0:17:17.520 as one does at Twain's mustache. The Bloomberg story yesterday 0:17:18.000 --> 0:17:21.280 about the d o J looking into, you know, connecting 0:17:21.280 --> 0:17:24.679 a criminal investigation of Tesla. UH said that they were 0:17:24.680 --> 0:17:27.640 looking into claims that Ellen had misled the market about 0:17:27.680 --> 0:17:31.400 the health of Tesla. Right, So that's markedly different, right 0:17:31.440 --> 0:17:34.159 than UH an investigation into the timing of the tweet 0:17:34.240 --> 0:17:37.199 or whether funding was secured. This is like, do you 0:17:37.240 --> 0:17:40.360 have an indication that this is a source of concern 0:17:40.440 --> 0:17:42.840 here that maybe Tesla isn't as healthy as it is 0:17:42.840 --> 0:17:45.600 professed to be. So our understanding is that the SEC 0:17:45.880 --> 0:17:49.280 is looking into two things, the tweet and sort of 0:17:49.320 --> 0:17:52.199 public statements that Musk and the company have made about 0:17:52.960 --> 0:17:56.240 delivery targets and production figures. I'm not under under the 0:17:56.280 --> 0:17:59.479 impression that the DOJ is looking into that, but certainly 0:17:59.480 --> 0:18:01.040 it's like, once the door is open, it's kind of 0:18:01.040 --> 0:18:05.440 a Pandora's box. Another question from a user calling him 0:18:05.480 --> 0:18:09.040 or herself plans for Elon. I don't know if that's 0:18:09.040 --> 0:18:12.440 a big group or not. Are there SEC whistleblowers out 0:18:12.480 --> 0:18:14.639 there or is there a d o J whistleblower? So 0:18:14.680 --> 0:18:17.639 I guess that's like, are there people inside Pesla that 0:18:17.800 --> 0:18:20.960 might be the source? Yes, there is a former Tesla 0:18:21.040 --> 0:18:23.639 employee who worked at the Giga factory named Martin Tripp, 0:18:23.720 --> 0:18:27.920 who filed a whistleblower complaint with the SEC. Has hired 0:18:27.960 --> 0:18:31.239 an attorney, and he alleges that, you know, Tesla was 0:18:31.960 --> 0:18:36.960 not being forefront, not being forthright about battery production figures, 0:18:37.160 --> 0:18:40.359 and there's a whole crazy story about him and the 0:18:40.359 --> 0:18:43.360 police in Nevada got involved, and now he's been he's 0:18:43.359 --> 0:18:45.080 on Twitter, he's trying, he's got to go fund me 0:18:45.160 --> 0:18:47.479 to raise money for his legal fees. His attorneys has 0:18:47.520 --> 0:18:50.239 been very has been very outspoken. The attorney is in 0:18:50.280 --> 0:18:53.679 turn asking other whistleblowers to come forward. I think a 0:18:53.720 --> 0:18:56.480 second person has also come forward, But yeah, that's there. 0:18:56.520 --> 0:19:01.000 There are definitely whistleblowers. Whether any action results comes out 0:19:01.040 --> 0:19:03.639 of that, I'm not entirely sure, but okay, Well, maybe 0:19:03.680 --> 0:19:08.080 more importantly, a user at j MT is asking us 0:19:08.080 --> 0:19:11.920 about impending competition and how realistic are some of these 0:19:11.920 --> 0:19:15.160 other companies like Audie that have talked about electric cars 0:19:15.200 --> 0:19:19.080 now I I an analysis from Tony Sakanagi and an 0:19:19.119 --> 0:19:22.880 analyst at Bernstein said that there was no credible competition, 0:19:23.040 --> 0:19:25.200 at least on the near horizon. So what is the 0:19:25.359 --> 0:19:27.879 environment out there for? So my sense is that, you know, 0:19:28.160 --> 0:19:31.280 any time a legacy automaker like Audie comes out with 0:19:31.320 --> 0:19:33.720 an electric car, the headline is always, you know, is 0:19:33.760 --> 0:19:35.879 this is this the Tesla killer? But I went to 0:19:35.920 --> 0:19:38.200 the Audie event on Monday night, and you know, it's 0:19:38.200 --> 0:19:40.560 a compelling electric car. If you like an if you'd 0:19:40.560 --> 0:19:42.439 like Audie, if you were a brand loyal to Audie, 0:19:42.640 --> 0:19:44.679 you'll probably look at it. But the goal of Tesla 0:19:44.720 --> 0:19:48.160 was always to accelerate the advent of electric transportation, and 0:19:48.640 --> 0:19:50.800 electric cars are still such a small part of the 0:19:50.840 --> 0:19:53.439 market that there's plenty of room for other automakers to 0:19:53.440 --> 0:19:55.000 come in. I mean, the goal is to get people 0:19:55.000 --> 0:19:59.040 to switch from the internal combustion engine to electric. It's 0:19:59.080 --> 0:20:00.919 not to get people to s which from a Tesla 0:20:00.960 --> 0:20:03.719 to an Audie. So, Dana, let's wrap up this discussion 0:20:03.760 --> 0:20:06.800 going back to to your life covering Tesla. You in 0:20:06.840 --> 0:20:10.159 the in the last few months have gone through the 0:20:10.200 --> 0:20:15.000 model three production hell months, You've gone through the funding, 0:20:15.040 --> 0:20:20.200 secured tweets. You've gone through Elon's marijuana smoking podcast, uh, 0:20:20.240 --> 0:20:24.159 and now the SEC and perhaps d J investigations. What 0:20:24.520 --> 0:20:26.360 is what are the next few months look like? Are 0:20:26.400 --> 0:20:29.080 things going to calm down on the Tesla beat? Yeah, 0:20:29.080 --> 0:20:32.560 that would be nice. Um. I think the next few 0:20:32.560 --> 0:20:37.200 months are really about their ability to retain talent and 0:20:37.280 --> 0:20:40.240 higher additional talent. It's about the next it's about the 0:20:40.240 --> 0:20:42.040 current quarter and are they able to kind of hit 0:20:42.080 --> 0:20:44.200 these numbers and then you're gonna just start seeing more 0:20:44.200 --> 0:20:47.040 cars on the road frankly, and so what is the 0:20:47.040 --> 0:20:51.320 consumer attitude about the car? Okay, Dana Hall. So we 0:20:51.400 --> 0:20:55.560 will stay tuned to your reporting for Bloomberg News, will 0:20:55.600 --> 0:20:58.199 be looking for the production and delivery numbers that Tesla 0:20:58.240 --> 0:21:01.520 will be making available in early October, and of course, 0:21:01.560 --> 0:21:04.480 as always, we will be paying attention to Elon Musk's 0:21:04.480 --> 0:21:19.600 Twitter account. And that's it for this week's episode of Decrypted. 0:21:19.840 --> 0:21:22.919 Thanks for listening. If you have a story about Tesla, 0:21:23.000 --> 0:21:25.840 send us an email at Decrypted at Bloomberg dot net, 0:21:26.040 --> 0:21:27.960