Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I feel like we
Speaker 1: need your address things. Yes, go One is that I
Speaker 1: sound like this.
Speaker 2: You sound great, I know, but it's different.
Speaker 1: I have a cold, so it's going to be like
Speaker 1: the best, the best voice you've ever heard on a
Speaker 1: podcast for like ten minutes, and then I'm going to
Speaker 1: lose my voice and it's going to be over. So
Speaker 1: it'll be great on both accounts.
Speaker 2: Yeah.
Speaker 1: The other thing I want to address is what are
Speaker 1: you going to be for Halloween?
Speaker 2: Oh my god, man, I'm so thrilled you asked. I'll
Speaker 2: probably just dress in all black and put on caddiers. Okay,
Speaker 2: but that's what I do most Fridays. Yeah, right, what
Speaker 2: about you?
Speaker 1: I think I've dies this bullet?
Speaker 2: Is it a bullet? Isn't it just joyful?
Speaker 1: Is joyful to take your kids around in their costumes
Speaker 1: when you're not in a costume? I shouldn't it? Like
Speaker 1: I see like the people with family costers, like, Okay,
Speaker 1: that's cool, and I kind of want to do it,
Speaker 1: but like not enough to Yeah, for adults, it's got
Speaker 1: to be creative.
Speaker 2: There are onesies out there, but I hear, yeah, I
Speaker 2: don't really want to cut around really psyched. I mean
Speaker 2: not to go running a one sie. I spoke too soon,
Speaker 2: but I'm just I love Halloween so much. I'm really excited.
Speaker 2: I'm an adult and I don't have a child, so
Speaker 2: I feel like I can't. But we're going to walk
Speaker 2: around Hoboken because Hoboken goes hard on Halloween. A lot
Speaker 2: of these.
Speaker 1: Yes, but okay, I.
Speaker 2: Mean I'm not going to like knock on doors and
Speaker 2: take candy. If someone with a bucket of candy comes
Speaker 2: up to me and says, do you want a piece,
Speaker 2: I'm not going to turn them down. That'd be crazy.
Speaker 1: Are you going to wear your cat ears on air?
Speaker 2: No? No, I won't.
Speaker 1: I feel like one year, I want you to wear
Speaker 1: like a children's ghost costume, you know, just like a
Speaker 1: sheet of holes for eyes on air.
Speaker 2: I usually subtly try to dress up on air.
Speaker 1: Like you've worn the cat I feel like we talked
Speaker 1: about this last year, but you really did.
Speaker 2: Some dedicated listener can tell us. I mean, I always
Speaker 2: I have this like Christmas shirt that I try to
Speaker 2: sneak in once a year. Tomorrow, I've I think I'm
Speaker 2: going to wear all black, like a black turtleneck and
Speaker 2: just be kind of spooky.
Speaker 1: Okay, just subtle, just a.
Speaker 2: Little maybe like a cat eye eyeliner. But I will
Speaker 2: mention over and over again that it's Halloween. I love Halloween. Yeah,
Speaker 2: I want to put someone in a ghost costume and
Speaker 2: just have them walk behind me at some point, just once.
Speaker 1: I think you should actually have a ghost cut host
Speaker 1: who doesn't say anything.
Speaker 2: That would be kind of funny. They just like a
Speaker 2: human and a ghost, like yeah, like.
Speaker 1: Many glasses over the ghost pace, you know.
Speaker 2: Yeah. I turned to them and like say something, and
Speaker 2: then I turned back like this sounds great.
Speaker 1: I've got your TV shows all right, podcast.
Speaker 2: Now, we're just trying to run out the clock here.
Speaker 1: To the podcast like that.
Speaker 2: Yeah scary.
Speaker 1: Hello and welcome to the Money Stuff podcast, your weekly podcast.
Speaker 1: Where are you talking about stuff related to money? I'm
Speaker 1: Matt Levine and I write the Money Stuff column for
Speaker 1: Bloomberg Get Thing.
Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and
Speaker 2: an anchor for Bloomberg Television. We're in We are in
Speaker 2: the heart of magnificent seven tech earnings, which means we
Speaker 2: are in the heart of those tech companies just saying
Speaker 2: how much they're going to spend on AI infrastructure, and
Speaker 2: it is so much.
Speaker 1: It's really like either you do or you don't believe that,
Speaker 1: Like the entire world is going to change with AI.
Speaker 1: And if you believe it, you're like, yeah, sure, ten
Speaker 1: trillion dollars, no problem, right, But it is like it's
Speaker 1: easy to be nervous or skeptical or make fun of
Speaker 1: those numbers because it's a lot of money.
Speaker 2: Yeah. Well, something that I've been talking about on television
Speaker 2: and casually with my friends in the newsroom is how
Speaker 2: a lot of this these hopes and dreams and these
Speaker 2: ambitions of these big tech companies to spend all this money,
Speaker 2: A lot of it has been able to be funded
Speaker 2: from free cash flow, but increasingly they're having to tap
Speaker 2: the bond markets. But as you laid out in a
Speaker 2: column this week, they have stellar credit ratings, so they
Speaker 2: don't necessarily want to rely too much on the bond market.
Speaker 1: Yeah, it's a mixed bag, right, Like you have a
Speaker 1: stellar credit rating, so you can borrow in the bond market,
Speaker 1: but like you can't do too much because then you
Speaker 1: lose the credit iting. So Meta is out this week
Speaker 1: with a twenty five billion dollar investment grade deal. Yes,
Speaker 1: but they want more than twenty five billion dollars and
Speaker 1: to do that they have tapped the woo like I guess,
Speaker 1: I don't know. You call it like people sometimes called
Speaker 1: the hybrid's market, but also like it's the kind of
Speaker 1: project finance. Yeah, it's like off balance sheet financing. Basically,
Speaker 1: like they set up a joint venture where the joint
Speaker 1: venture will operate their data centers, and the joint venture
Speaker 1: will be owned by in this case Blue Owl, but
Speaker 1: in the general case someone who is uh, basically credit
Speaker 1: firm but is willing to do weird stuff, and so
Speaker 1: Blue Oul is the equ the owner of the data center,
Speaker 1: and Meta signs a series of contracts that in the
Speaker 1: aggregate kind of look like that. Like they sign like
Speaker 1: leases and a residual value guarantee, where like at the
Speaker 1: end of the term of the lease they have to
Speaker 1: buy the chips in the data center. But those contracts
Speaker 1: look enough like debt that Blue Owl can package it
Speaker 1: into bonds and sell it to Pimcar or whatever, but
Speaker 1: also enough not like debt that it doesn't affect Meta's
Speaker 1: accounting or its credit ratings. So it's like not debt
Speaker 1: of Meta. For the purposes of like Meta, but it
Speaker 1: is kind of debt of Meta for the purposes of
Speaker 1: the people buying the bonds.
Speaker 2: So you talked about how this is a fantastic trick
Speaker 2: that if you want to call it that that has connotations, but.
Speaker 1: It's just like it's just the thing people do. Right,
Speaker 1: It's like it turns out there are things that are
Speaker 1: debt and there are things that are not debt, but
Speaker 1: then there's like this huge middle ground of things that
Speaker 1: they kind of that that and like, for the most part,
Speaker 1: things are pretty binary for like ratings and balance sheet.
Speaker 1: Either it's on your balance sheet or it's not. Either
Speaker 1: it effects your credit anying credit atings are more not
Speaker 1: quite binary, like the ratings agency sometimes gives things partial credit.
Speaker 1: But you know, if you like check the right boxes,
Speaker 1: then it's not quite debt. But you can convince people
Speaker 1: to buy the bonds because they look pretty much like
Speaker 1: your debt.
Speaker 2: Yeah, give or take you do, right though. That The
Speaker 2: bonds for the Hyperion Hyperion the name of the data center.
Speaker 2: They price with a coupon of almost six point six percent,
Speaker 2: which was roughly a percentage point higher than Meta's outstounding
Speaker 2: corporate bonds and in line with the average jump on yields.
Speaker 2: So hear what you're saying. But at a certain point,
Speaker 2: I feel like people and investors see through this.
Speaker 1: They do, and they don't, right, I mean, they don't
Speaker 1: treat it like Meta debt exactly.
Speaker 2: Yeah.
Speaker 1: They you know, they're happy to buy it at a
Speaker 1: yield and they're like, oh, yeah, it's great. It's like
Speaker 1: it's backed by Meta. You know, it has structural features
Speaker 1: that make it not quite as good as Meta debt,
Speaker 1: but yeah, so it trades that a yield that is
Speaker 1: a reasonable cut the capital for building a data center
Speaker 1: and kind of keeps it off of Meta's pristine balance sheet.
Speaker 2: Yeah, we're talking about this like weird structure, this SPV
Speaker 2: that Meta is doing.
Speaker 1: It's weird ish a little, but it's also like, you know,
Speaker 1: the basic format of doing some sort of project finance JV.
Speaker 1: They didn't invent that for data centers.
Speaker 2: That's true.
Speaker 1: It's been done for a while and a lot of
Speaker 1: industries in different forms. And you know, I wrote this
Speaker 1: week about it's very general purpose. And so Carrig Doctor
Speaker 1: Pepper is putting its k cup manufacturing in JV so
Speaker 1: that it can borrow against the k cups without tarnishing
Speaker 1: its credit rating to do an acquisition.
Speaker 2: Okay, so it's not weird. I do feel like a
Speaker 2: lot of folks, myself included, have thought more about this
Speaker 2: in the past two weeks, and maybe I have. Ever,
Speaker 2: it's a concept that's being more widely socialized than perhaps
Speaker 2: in the.
Speaker 1: Past and higher profile.
Speaker 2: Yes, that's the thing.
Speaker 1: And the other thing about it that is interesting is
Speaker 1: that it's really interacting with the private credit right. Yeah,
Speaker 1: you look at all the private credit firms and stereotypically
Speaker 1: private credit means leveraged acquisition finance. And the reason for
Speaker 1: that is because you know, private equity sponsors are willing
Speaker 1: to pay up for flexible, fast, guaranteed debt, so you
Speaker 1: can make money doing that, Like you can charge more
Speaker 1: than the public markets would if you can offer sponsors
Speaker 1: like user friendly product financing their acquisitions. But then, like
Speaker 1: you know, these private credit firms, like they have a
Speaker 1: lot of insurance clients, they want to deploy a lot
Speaker 1: of money. They need to eventually get into investment grade debt,
Speaker 1: and it is harder to get into investment grade debt
Speaker 1: because you go to like Meta and you say I'll
Speaker 1: buy your bonds and metas like, sure, our bond's price
Speaker 1: that you know, that's right, and it's not super exciting
Speaker 1: for private credit. But then you do this project financing,
Speaker 1: and you can do a thing that gets an A
Speaker 1: plus rating and also has a yield. And also you're
Speaker 1: not competing in the same way with the public markets
Speaker 1: because regular public market bond investors can't necessarily buy two
Speaker 1: point five billion dollars of equity in a data center, right,
Speaker 1: Like the private credit firms are a little bit more
Speaker 1: flexible and like what kind of financing arrangements they can do,
Speaker 1: and a little bit more creative, and so they can
Speaker 1: do this to get tens of billions of dollars of
Speaker 1: investment grade financing, which is what they want.
Speaker 2: Yeah, I do want to talk more broadly about META, Yes,
Speaker 2: but before we get there, so you made the point that, okay,
Speaker 2: even with this what they're working out, they also tap
Speaker 2: the market, the public market for that twenty five billion
Speaker 2: dollar bond. Apparently it was super oversubscribed according to our reporting.
Speaker 2: But you think about.
Speaker 1: You know, META has capacity to do hundreds of billions
Speaker 1: of dollars then, and they don't do it because they
Speaker 1: want to keep good rating. So they Yeah, they want
Speaker 1: to met a bond.
Speaker 2: Yeah, one hundred and twenty five billion dollars of bids
Speaker 2: for this twenty.
Speaker 1: Five So like over subscribe never means anything.
Speaker 2: Yeah, well nothing truly means anything, Matt. But something I've
Speaker 2: been thinking about, not just as it relates to Meta,
Speaker 2: but all the spending that all these big tech companies
Speaker 2: are doing. You think about the typical profile of investing
Speaker 2: in tech from the equity market perspective, It's like, Okay,
Speaker 2: these companies have pristine, tidy balance sheets, they're very capital
Speaker 2: light businesses, et cetera, et cetera. And I do wonder,
Speaker 2: you know, if the nature of investing in the tech
Speaker 2: space is starting to change, And I keep asking people.
Speaker 1: That just not capital light these days? I know, I
Speaker 1: know it's the opposite.
Speaker 2: It's just you think, like five years ago, the conversation
Speaker 2: was about you know, intangible assets, and that week.
Speaker 1: Meta right like five years ago was Meta called Facebook. Yeah,
Speaker 1: but like you think, like the stereotypical business model of
Speaker 1: Facebook is like it serves a web page, right, It's
Speaker 1: like marginal cost is zero, right, so it's scales like
Speaker 1: really really effectively. So Facebook is this classic investment where
Speaker 1: you know, venture capitalists put money in and it goes
Speaker 1: from being a dorm room project to being a one
Speaker 1: hundred billion dollar company with kind of no additional spending. Yeah,
Speaker 1: and that switch just flipped and now it's just everything
Speaker 1: is a trillion dollars of data centers.
Speaker 2: Well, I love talking about meta because you remember the
Speaker 2: reason why Meta is called meta because they do. Hey,
Speaker 2: one's so big on the metaverse, which I never talked
Speaker 2: about before Mark Zuckerberg was lighting money on fire.
Speaker 1: I don't really know what that entel, but it would
Speaker 1: be funny if there were like data centers out there
Speaker 1: that were optimized only for the metaverse and are now
Speaker 1: just like tumbleweed is blowing through them.
Speaker 2: I love it. I love it. But that led to
Speaker 2: Meta's year of efficiency, et cetera.
Speaker 1: It was this whole thing and now the opposite.
Speaker 2: Alphabet and Microsoft. You can make a case for why
Speaker 2: they're going so hard on AI when it comes to Meta.
Speaker 2: I'm not sure what the payoff is. They said that
Speaker 2: they're investing so hard because it's going to help better
Speaker 2: target their advertising. But is that is that? Is that
Speaker 2: a trillion dollar endeavors? It's wild, it's wild, and I've.
Speaker 1: Learned is that the purpose of the economy is to
Speaker 1: serve customized ads.
Speaker 2: For sure, for sure, all the water sources be damned.
Speaker 2: But I don't know. I'm curious to see how this
Speaker 2: plays out for Meta Apparently, Mark Zuckerberg did say on
Speaker 2: the earnings call they reported on Wednesday this week that
Speaker 2: the company has options if it ends up spending too
Speaker 2: much on infrastructure. In one scenario, he said, the company
Speaker 2: could use the extra computing capacity for its core business.
Speaker 2: In another, it could sell the power to other companies.
Speaker 1: Or or really good metaverse.
Speaker 2: That metaverse, really good metaverse.
Speaker 1: Yeah, there's the centers full of legless Mark Zuckerberg.
Speaker 2: I mean, they're still committed to that in there. I
Speaker 2: believe that falls under the Reality Labs division, which reported
Speaker 2: a loss of four point four billion dollars for the
Speaker 2: third quarter.
Speaker 1: On revenue of twelve cents revenue.
Speaker 2: Of four hundred and seventy million. I'll have you know. Anyway,
Speaker 2: I think it's super interesting. At least Mark Zuckerberg's thinking
Speaker 2: about the prospect of maybe they're overbuilding.
Speaker 1: Also, we're in hundreds of billions of dollars of a
Speaker 1: spending open AI is a regular company.
Speaker 2: Now I know it's exciting so regularly anti climactically.
Speaker 1: Yeah, I was assuming there'd be like years of litigation,
Speaker 1: and like all the state attorney generals and Microsofts were like, okay, good,
Speaker 1: it's fine, So cool. They did their.
Speaker 2: Conversial at this moment too. Elon Musk is a bit distraction,
Speaker 2: which will brew we'll get to I'm sure he'll keep suing,
Speaker 2: but yeah, we'll get to that anyway. Open Ai apparently
Speaker 2: is so normal that maybe they're going to IPO in
Speaker 2: next two years or so.
Speaker 1: Yeah, sure, maybe, right.
Speaker 2: That's what Reuter's told us.
Speaker 1: Sure. I just feel like any large private tech company
Speaker 1: might IPO in the next two years.
Speaker 2: I know, but this one I feel like it urgently
Speaker 2: needs to really. Okay, Yeah, they've committed to like one
Speaker 2: point four trillion dollars of spending. Where are they going
Speaker 2: to get the funds.
Speaker 1: From, like an IPO? Maybe a little from an IPO?
Speaker 1: Sam Almons, if open Ai and Fanny and Freddie I'll
Speaker 1: go public like next year, God, what IPO?
Speaker 2: So many good podcasts? No. Sam Almons said that I
Speaker 2: think it's fair to say that it's the most likely
Speaker 2: path for us, given the capital needs that we'll have. Yeah,
Speaker 2: during a live stream on Tuesday.
Speaker 1: Matt find the the public equity markets and the public
Speaker 1: bond markets and the project finance markets. It's amazing, so
Speaker 1: much money for AI. Yeah, so they're a normal company.
Speaker 2: I don't know, a normal company.
Speaker 1: Owns twenty seven percent.
Speaker 2: Twenty seven percent.
Speaker 1: The nonprofit owns twenty six percent but has like super
Speaker 1: voting board control. It's very hard. Yeah, you be like,
Speaker 1: we started as a non profit. We shore donations. Theydn't
Speaker 1: think that much in donations, but in donations, and now
Speaker 1: we're a five hundred million dollars private company for the
Speaker 1: benefit of our investors. And one way to sort of
Speaker 1: smooth that transition is that the nonprofit will continue to
Speaker 1: control the company and have like supervoting rights. I don't
Speaker 1: know how that will go for an IPA, but it'll
Speaker 1: go fine. Like no one cares. You could imagine being like,
Speaker 1: if this company is not run for profit, maybe I
Speaker 1: shouldn't invest in it. Yeah, seeking an enormous financial return,
Speaker 1: But no one has ever had that thought.
Speaker 2: Yeah, or ever will. Yeah, that's so clean.
Speaker 1: It's like I is definitely looking to give you a
Speaker 1: high financial return on your investment, which is nice.
Speaker 2: So do you not take Samulmon at his words, which
Speaker 2: words that they need to do this to get the
Speaker 2: capital that they need to know.
Speaker 1: I believe that they need to do this to get
Speaker 1: the capital. But like even now that they're a for
Speaker 1: profit company, they're a public benefit company, which is slightly
Speaker 1: less than for profit but still pretty for profit. But
Speaker 1: they're controlled by a nonprofit board, right, Like the nonprofit
Speaker 1: boards to put the interest of humanity first. But no
Speaker 1: one cares about that. No one's worried about that.
Speaker 2: I thought that a nonprofit board couldn't fire members.
Speaker 1: Well, they're not going to fire him like that, lesson.
Speaker 2: Well I know that, but even other members, like other
Speaker 2: open AI executives. So when when you say they're in control,
Speaker 2: I mean, what does that mean if they're not going
Speaker 2: to fire the people running it?
Speaker 1: That's a good question the board of directors, right, So,
Speaker 1: like typically one of the main things the board does
Speaker 1: is decide whether or not to do a merger. And
Speaker 1: they're too big to do a merger, you know, yeah, right, Like,
Speaker 1: I don't know how much operational control they have. One
Speaker 1: thing the board of directors does is fire the CEO
Speaker 1: if he does a bad job. But there's a constraint
Speaker 1: on that job number one, Right, Like the board of
Speaker 1: open Ai within recent memory has fired Sam Altman, not
Speaker 1: for doing a bad job of developing products or leading
Speaker 1: the people or achieving shareholder value, but for the crime of,
Speaker 1: I don't know, something else. No one really understood it.
Speaker 1: But it was kind of in the ballpark of like
Speaker 1: not being for the benefit of humanity or like deceiving
Speaker 1: the board. And I'm like, no one really knows, and
Speaker 1: they quickly unfired him and then fired themselves. Yeah, so
Speaker 1: that won't happen again.
Speaker 2: Yeah, that was just about two years ago.
Speaker 1: Yeah, it's amazing in theory, Like you can look around
Speaker 1: a lot of like boards of big founder led tech startups.
Speaker 1: Sometimes those founders do weird stuff and you can imagine
Speaker 1: a board firing them, but you can't really because they
Speaker 1: never would. You know.
Speaker 2: There's been so many natural segues to yes.
Speaker 1: Right, let's move straight along.
Speaker 2: Okay, Well, the only thing I was going to say
Speaker 2: is that when it comes to the capital needs, obviously
Speaker 2: we've talked a lot about the private markets and the
Speaker 2: public markets melding that if you're a private company, you
Speaker 2: can get most of the funding that you need in
Speaker 2: the private markets. This obviously is such an extreme example
Speaker 2: that maybe it's not even worth mentioning, but it is
Speaker 2: a limit perhaps of the private markets.
Speaker 1: Yeah, sure, right, I tak that point, although we're not
Speaker 1: there yet, right, No, this is like they're rumored to
Speaker 1: be interested in going public in twenty twenty.
Speaker 2: My mind, they're already public for now. They have floated
Speaker 2: a trial balloon with Reuters.
Speaker 1: No, Like, what do they need capital for? They need
Speaker 1: to like get chips and data centers and compute like
Speaker 1: they're getting all of that, right, but they're funding it
Speaker 1: with vague promises of future trillions of dollars of capital raising, right,
Speaker 1: Like they have not needed to go public to meet
Speaker 1: their enormous capital spending needs yet. Yeah, right, they're incurring
Speaker 1: obligations that might require going public. But loo, I agree
Speaker 1: with you that, like, if Sam Altman is feeling the
Speaker 1: pressure to go public, that does show some limit on
Speaker 1: the ability of private markets to fund absolutely everything. Yeah,
Speaker 1: that he's got a five hundred billion dollar company that
Speaker 1: keeps signing trillion dollar deals and is not public. So true,
Speaker 1: the limit is we haven't hit it yet.
Speaker 2: If we're looking for another segue, SpaceX obviously is private
Speaker 2: company that has a lot of capital needs.
Speaker 1: Yes, so it turns out that shooting rockets to Mars
Speaker 1: costs much, much, much less than training chatbots.
Speaker 2: What a world. It's what a world, right, Elon Musk,
Speaker 2: he's the whole company, the whole board of Tesla. Well really,
Speaker 2: Robin Denholm has been on a media tour.
Speaker 1: Yeah, Robin Denholm and the board of Tesla are going
Speaker 1: around to big shareholders and also frankly media, Yeah, to
Speaker 1: drum up support for Elon Musk's big pay package because
Speaker 1: the sharelders have to vote on it, and the big
Speaker 1: shaholder advisory firms Iss and Glass Lewis have recommended that
Speaker 1: the sharelders vote against giving Elon Musk a pay package
Speaker 1: that has a nominal value of one trillion dollars. Yeah.
Speaker 1: I really don't like that framing. No, because like basically
Speaker 1: what it is that they want to give Elon Musk
Speaker 1: twelve percent of the company, and twelve percent of the
Speaker 1: company right now is worth one hundred and eighty billion dollars.
Speaker 1: There's a lot of money. Yeah, not a trillion dollars.
Speaker 1: But in order to justify doing this, they're like, we'll
Speaker 1: only give him twelve percent of the company if he
Speaker 1: hits like these really ambitious operational and stock price targets,
Speaker 1: and if he hits all those targets, the company will
Speaker 1: be worth eight point five trillion dollars, and his twelve
Speaker 1: percent package will be worth a trillion dollars. But like
Speaker 1: they're trillion dollars today.
Speaker 2: Yeah, they're not giving him a trillion dollars, right, They're.
Speaker 1: Giving him the chance to get twelve percent of the stock.
Speaker 2: Well, listen, you don't like the trillion dollar framing, but
Speaker 2: everyone listening to this podcast now is thinking about it differently.
Speaker 1: So no, they're not. It's fine anyway. But yeah, I
Speaker 1: wrote today on Thursday, it's interesting to me, like the
Speaker 1: trillion dollars is really embarrassing. No one wants to vote
Speaker 1: to give Elon Musk a trillion dollars. Yeah, I think
Speaker 1: it sounds insane. It's clearly like part of the pushback
Speaker 1: to the proposal is it's a trillion dollars, right. Elon
Speaker 1: Musk has been very clear that what he wants is
Speaker 1: to control twenty four percent of the votes of TESLA.
Speaker 1: He's like, I don't want to be voted out by
Speaker 1: like dom shaolders. I want to have like enough voting
Speaker 1: control that I have a lot out of control, but
Speaker 1: not so much that I can't be voted out if
Speaker 1: I become insane, which is okay. And so it seems
Speaker 1: to me the obvious solution there is to give him
Speaker 1: twenty five percent of the voting power without giving him
Speaker 1: any more stock, which is not easy to do, and
Speaker 1: in fact, in an interview with the Ft, Robin Henholmes said,
Speaker 1: we tried to do that and we couldn't find a
Speaker 1: way to do it. I don't know, man, it seems
Speaker 1: to be like you could do it. You could like
Speaker 1: find a way to give him super voting shares. You
Speaker 1: could get shareholders to approve that, and then you wouldn't
Speaker 1: have to give him a trillion dollars. You could just
Speaker 1: be like, we're giving him twenty five percent of the
Speaker 1: vote because that's what he wants.
Speaker 2: Robin Denholm went on Bloomberg TV. You could have stopped
Speaker 2: her in person and told her about that idea. I
Speaker 2: was writing, you were busy, it's busy, well, and.
Speaker 1: I wrote it, and she can whatever, because surely they've
Speaker 1: had that idea, because she did say to the Ft, like,
Speaker 1: we tried to do it, and it couldn't find a
Speaker 1: way to work. But I don't know why I couldn't
Speaker 1: find a way to make it work.
Speaker 2: Yeah, it didn't tricky. Didn't you say we searched high
Speaker 2: and low or something.
Speaker 1: It seems tricky. Like I'm not saying it's trivial to
Speaker 1: be like, we're going to give this guy a new
Speaker 1: super voting share, but you know, yeah, doesn't seem impossible.
Speaker 1: So no, that's just the guy.
Speaker 2: That was an interview she did with The Financial Times.
Speaker 2: She also went on Bloomberg Television and said that the
Speaker 2: board is looking at internal CEO candidates should Elon Musk leave.
Speaker 1: Right, They're definitely going around being like if this Preybaggers
Speaker 1: doesn't get approved, he is out the door, which is
Speaker 1: you know, maybe. Yeah.
Speaker 2: She said that the company has a deep bench of executives,
Speaker 2: which I always like hearing because we never hear from
Speaker 2: them or about them.
Speaker 1: So I think she's also said there's no Elon mark too. Right,
Speaker 1: it is possible that you can have both a deep
Speaker 1: bench of very excellent car executives and also not have yeah,
Speaker 1: Elon Musk light waiting in the wings. You know.
Speaker 2: Well, apparently one of them is their global production chief.
Speaker 2: In China head tom Ju, which is funny, I guess
Speaker 2: because initially when I read that headline, it was like, oh, well,
Speaker 2: it's going to be really interesting to see if like
Speaker 2: Elon Musk fires all of them, because he has CEO,
Speaker 2: so he could, but I guess there's potential internal candidates.
Speaker 1: Yeah, I don't think he will. I think, like, if
Speaker 1: you take them at their word, that Elon Musk might
Speaker 1: quit if he doesn't get this control. Yeah, it would
Speaker 1: still be a terrible idea for him to sabotage Tesla
Speaker 1: on his way out the door. Like he could be
Speaker 1: mad at the shareholders and he could be like, I'm
Speaker 1: going to spend my time on something where I have
Speaker 1: more control, because what I want to do is build
Speaker 1: a robot army, and I need to have twenty zero
Speaker 1: present voting control of anywhere I build a robot army. Right,
Speaker 1: you believe what they're saying. Right, That's still not a
Speaker 1: reason for him to sabotage Tesla because Tesla remains more
Speaker 1: or less the majority of his wealth, right, and so
Speaker 1: like if he were to leave in a huff, the
Speaker 1: stock would tank, Yes, but if he were to leave
Speaker 1: in a huff, but also saying, I've left this in
Speaker 1: charge of my good friend who's really good at this,
Speaker 1: Tom Hu, then it's better for his wealth than leaving
Speaker 1: in a huff and burning it down on his way
Speaker 1: out the door.
Speaker 2: That's true. He seems logical way to think about things, Matt.
Speaker 1: Yeah, you know he's not illogical.
Speaker 2: No, he does host somewhat emotional.
Speaker 1: Weird stuff, but I think he's going to be rational.
Speaker 2: Well you know, well, maybe find out but probably not.
Speaker 1: Probably not. Probably the shareholders will appear of the package. Yeah,
Speaker 1: I'm guessing. I don't. I don't have no basis in
Speaker 1: saying that. I just they always do.
Speaker 2: Well, it's thirty percent of their investor bases retail shareholders.
Speaker 1: He'll be fine. Yeah, they're like creating drama, but they'll
Speaker 1: be fine. But if they're not fine, I'll be very
Speaker 1: interested to see if he quits.
Speaker 2: Yeah, me too, mail Bag, mail Bag.
Speaker 1: I do want to talk briefly about some emails.
Speaker 2: Yeah, I'm not going to sing mail bag with us mail.
Speaker 1: Bag those voice. But I don't know if you listened
Speaker 1: to last week's podcast episode, But if you did, insisted
Speaker 1: entirely of Katie reciting facts about the new JP market Headquarters.
Speaker 1: But here are some more facts about the new JP
Speaker 1: Market Headquarters.
Speaker 2: I was worried that people wouldn't like that.
Speaker 1: But I was sure people would like.
Speaker 2: People did well. We got a lot of age. This
Speaker 2: is from Eric Okay. I went on a tour of
Speaker 2: the HQ as part of an annual meeting earlier this year,
Speaker 2: and during the tour they highlighted the HVAC system for
Speaker 2: the flag. It is actually capable of mimicking the conditions
Speaker 2: outside the building, so the flag always waves in the
Speaker 2: way it would if it were outside. Man, it must
Speaker 2: be going crazy today because it's raining. There's a story
Speaker 2: it's raining in the lobby. Maybe it's like the Hogwarts
Speaker 2: ceiling really good.
Speaker 1: Yeah, because we were talking about like there's a flag
Speaker 1: in the lobby that blows in the breeze and yeah,
Speaker 1: you mentioned the fanning system and I was like, is
Speaker 1: it a guy with a desk fan on a stick?
Speaker 1: And no, it's a very fancy HPY system that makes
Speaker 1: it rain inside.
Speaker 2: I have to say that the flag was waving like
Speaker 2: there would have to be a strong gust of wind
Speaker 2: the way it was waving last Tuesday, and I don't
Speaker 2: remember it being that one. Dy outside maybe.
Speaker 1: Like mimics but somewhat amplifies.
Speaker 2: Yeah, it enhances, it makes it a little Yeah, definitely.
Speaker 1: This is from Riot regarding Matt's observation that the building
Speaker 1: has a precarious overran. I don't want to say it
Speaker 1: just looks sick. It might fall on you. Yeah, surely
Speaker 1: you were aware of the design and construction flow of
Speaker 1: the City Court building in the late seventies. This is
Speaker 1: taught in basically all engineering programs today. I assume it
Speaker 1: must be well known in finance circles too. I think
Speaker 1: less well known in finance, but not unknown. But yeah,
Speaker 1: there's a city building.
Speaker 2: I did not know this.
Speaker 1: So it's on like near us. It's at like six
Speaker 1: o one Lex. It's like just kind of down the
Speaker 1: street from the Bloomberg offices, and they built it in
Speaker 1: the late seventies and it's very cool. It's like very
Speaker 1: much like you know, there's a plaza underneath it and like, yeah,
Speaker 1: big massy building is on top of like little stick legs.
Speaker 1: And the famous engineer who designed it didn't take into
Speaker 1: account quartering wing winds. Quartering winds they're like the winds
Speaker 1: that don't hit the thing head on. And then like,
Speaker 1: you know, it's a fancy building, and so a couple
Speaker 1: of like engineering and architecture students like studied it for
Speaker 1: class projects and they were like, wait a minute, if
Speaker 1: this gets a wind from the run direction, it'll fall over.
Speaker 1: And they emailed him or they wrote to him, and
Speaker 1: he was like, oh, no, you're right, And so they
Speaker 1: like know while people were working in the building every
Speaker 1: night they'd go home and like people would come in
Speaker 1: and shore up the bolts in the building to make
Speaker 1: sure it didn't fall over.
Speaker 2: Right, that the engineer was humble enough to take the feedback,
Speaker 2: but also maybe he should.
Speaker 1: Skis a little grab. It's like he contemplated the suicide.
Speaker 2: Oh that's not good. But I was gonna say maybe
Speaker 2: he shouldn't work again.
Speaker 1: I think he was fine, but yeah, it was a
Speaker 1: little not a great day for him.
Speaker 2: I can't wait to read the Soukapedia article. I will
Speaker 2: say I would love to see the JP Morgan lobby
Speaker 2: flag in a quarter England. Yeah, sounds pretty cool.
Speaker 1: They should do that, just as like a little engineering
Speaker 1: and side jack.
Speaker 2: Yeah Nick Nick says, I just went to a meeting
Speaker 2: there and wanted to share a couple of things. Apparently
Speaker 2: the pub doesn't start pouring beer until four pm. The
Speaker 2: rumor going around was that Jamie Diamond himself was refused
Speaker 2: to drink at three pm. We haven't fact tracked any
Speaker 2: of this, By the way, I kind of don't.
Speaker 1: Believe that Jamie Diamond was like wandering down to the
Speaker 1: in office pub at three pm and to be like,
Speaker 1: I'll have a beer, Like that doesn't sound like.
Speaker 2: DAMMI maybe they like Also, I don't like you.
Speaker 1: Could imagine him being like I'm going to do a
Speaker 1: little like stunt of like order a beer to like
Speaker 1: demonstrate the pub to people, and like he wasn't served.
Speaker 2: Yeah, but I feel like they would make like refuse
Speaker 2: him once but then be like, actually, here's the pier.
Speaker 2: But I don't know. I only have a parasocial relationship
Speaker 2: with Jamie Diamond, so I'm not actually sure.
Speaker 1: Right, we do need to interview the bartender who a
Speaker 1: drink at the Jamie Diamond controlled pub, and.
Speaker 2: I want to go there and we can look at
Speaker 2: the flag.
Speaker 1: If you're that bartender.
Speaker 2: Yeah, no, I want to do a podcast from the.
Speaker 1: Pub Whipping Wind. The pub is the pub is not.
Speaker 2: In that's on the thirteenth floor. The flag is in
Speaker 2: the lobby.
Speaker 1: We're going to do the podcast from the pub.
Speaker 2: It'll happen.
Speaker 1: And that was the Money Stuff Podcast.
Speaker 2: I'm Matt Levine and I'm Katie Greifeld.
Speaker 1: You can find my work by subscribing to the Money
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Speaker 2: Dot com, and you can find me on Bloomberg TV
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Speaker 1: The Money Stuff Podcast is produced by Ana ma Aserakis
Speaker 1: and Roses Ondan.
Speaker 2: Our theme music was composed by Blake Maples.
Speaker 1: Amy Keen is our executive.
Speaker 2: Producer, and Sage Bauman is Bloomberg's head of Podcasts.
Speaker 1: Thanks for listening to The Money Stuff Podcast. We'll be
Speaker 1: back next week with more stuff.