1
00:00:05,720 --> 00:00:08,039
Speaker 1: Hey, this is David Popotoppolis, and boy do we have

2
00:00:08,080 --> 00:00:10,880
Speaker 1: a fun bonus for you today. There's a new podcast

3
00:00:10,880 --> 00:00:14,800
Speaker 1: in our Bloomberg family called money Stuff. The podcast hosted

4
00:00:14,840 --> 00:00:18,360
Speaker 1: by our friends Matt Levine and Katie Greifeld. Every week,

5
00:00:18,400 --> 00:00:21,360
Speaker 1: they talk about Wall Street, finance, and all the other

6
00:00:21,400 --> 00:00:25,520
Speaker 1: stuff that Matt covers in his wildly popular newsletter money Stuff.

7
00:00:26,040 --> 00:00:28,840
Speaker 1: Maybe you've heard of it. Of course, you can't talk

8
00:00:28,880 --> 00:00:34,120
Speaker 1: about money stuff without talking about a one mister Elon Musk,

9
00:00:34,520 --> 00:00:37,519
Speaker 1: and in their most recent episode, Matt and Katie discussed

10
00:00:37,640 --> 00:00:40,920
Speaker 1: Elon in the upcoming shareholder vote on his pay package.

11
00:00:41,080 --> 00:00:43,240
Speaker 1: We thought you might get a kick out of their conversation,

12
00:00:43,800 --> 00:00:46,479
Speaker 1: so we're sharing an excerpt with you here. If you

13
00:00:46,520 --> 00:00:48,760
Speaker 1: want to listen to the whole episode, we'll leave a

14
00:00:48,800 --> 00:00:50,960
Speaker 1: link in the show notes, or you can find it

15
00:00:50,960 --> 00:00:54,560
Speaker 1: by searching money Stuff the podcast wherever you listen to

16
00:00:54,600 --> 00:00:57,720
Speaker 1: your podcasts. The elon In crew will be back in

17
00:00:57,760 --> 00:01:00,320
Speaker 1: your feed tomorrow with a brand new episode.

18
00:01:02,200 --> 00:01:04,919
Speaker 2: Hello and welcome to the money Stuff podcast, your weekly

19
00:01:04,959 --> 00:01:08,800
Speaker 2: podcast where we talk about stuff related to money. Hi'm

20
00:01:08,840 --> 00:01:11,880
Speaker 2: Matt Levie. I've read the Money Stuff colin for Bloomberg Opinion.

21
00:01:12,120 --> 00:01:13,280
Speaker 3: And I'm Katie Greifeld.

22
00:01:13,280 --> 00:01:15,560
Speaker 4: I'm a reporter for Bloomberg News and an anchor for

23
00:01:15,600 --> 00:01:16,560
Speaker 4: Bloomberg Television.

24
00:01:16,680 --> 00:01:17,919
Speaker 2: It's the best day of our lives.

25
00:01:18,240 --> 00:01:20,600
Speaker 4: It is the best day of our lives, which happens

26
00:01:20,640 --> 00:01:21,920
Speaker 4: every day on Fridays.

27
00:01:21,959 --> 00:01:23,880
Speaker 3: We have a lot to talk about today. We have

28
00:01:23,920 --> 00:01:25,000
Speaker 3: to talk about Elon Musk.

29
00:01:25,120 --> 00:01:27,240
Speaker 2: Of course, we had a whole week with that Elon Musk.

30
00:01:27,240 --> 00:01:28,839
Speaker 4: I think, I know it was weird that we didn't

31
00:01:28,840 --> 00:01:30,320
Speaker 4: get to it in the first week. So we'll talk

32
00:01:30,360 --> 00:01:33,440
Speaker 4: about Elon Musk in that pay package fifty six billion dollars,

33
00:01:33,440 --> 00:01:35,960
Speaker 4: and of course his issues with Delaware. We're also going

34
00:01:36,000 --> 00:01:40,520
Speaker 4: to talk about Jane Street versus Millennium. You just published

35
00:01:40,560 --> 00:01:40,840
Speaker 4: on this.

36
00:01:41,040 --> 00:01:42,640
Speaker 2: By the time you heard this podcast, I will have

37
00:01:42,640 --> 00:01:45,679
Speaker 2: published on it roughly twenty four hours ago, recording it

38
00:01:45,720 --> 00:01:47,240
Speaker 2: shortly after I published on it.

39
00:01:47,240 --> 00:01:49,640
Speaker 4: It's Thursday right now, and Matt published twenty minutes ago.

40
00:01:49,720 --> 00:01:51,960
Speaker 4: So this is the one I'm least prepared for, as

41
00:01:52,040 --> 00:01:55,200
Speaker 4: we're also going to talk about Hunter Brook, the hedge Fund.

42
00:01:55,240 --> 00:02:02,520
Speaker 4: That's also a newspaper question Mark. Indeed, before we get

43
00:02:02,520 --> 00:02:05,440
Speaker 4: into this week's topics, it's our second episode.

44
00:02:05,720 --> 00:02:07,600
Speaker 2: It's our second episode. We got a lot of feedback

45
00:02:07,640 --> 00:02:08,800
Speaker 2: On the first episode, we got a.

46
00:02:08,800 --> 00:02:09,560
Speaker 3: Lot of feedback.

47
00:02:09,720 --> 00:02:12,440
Speaker 4: A lot of it was about all of it comment

48
00:02:12,480 --> 00:02:13,880
Speaker 4: that I made about.

49
00:02:13,600 --> 00:02:14,880
Speaker 3: The doped Olympics.

50
00:02:14,919 --> 00:02:18,160
Speaker 4: Surprise, they already exist and they're funded by Peter Thiel.

51
00:02:18,320 --> 00:02:20,200
Speaker 2: Well, it don't exist. They're like launching.

52
00:02:20,440 --> 00:02:23,880
Speaker 4: Yeah, the idea is out there, the enhanced Games that

53
00:02:23,919 --> 00:02:27,160
Speaker 4: would have no drug testing. So if you didn't want

54
00:02:27,200 --> 00:02:29,480
Speaker 4: to do it performance enhancing drugs, you could still enter.

55
00:02:29,520 --> 00:02:31,320
Speaker 2: You would just lose, yes, or you could do the

56
00:02:31,360 --> 00:02:33,200
Speaker 2: regular Olympics, which you'll still have drug testing.

57
00:02:33,320 --> 00:02:34,959
Speaker 3: Yeah, and you'll probably still lose.

58
00:02:35,000 --> 00:02:37,880
Speaker 2: I wonder if, like presumably day one, the best athletes

59
00:02:37,919 --> 00:02:39,400
Speaker 2: will still do the regular Olympics.

60
00:02:39,520 --> 00:02:39,760
Speaker 3: Yeah.

61
00:02:39,760 --> 00:02:41,760
Speaker 2: I wonder how long it'll take for the Enhanced Olympics

62
00:02:41,800 --> 00:02:44,880
Speaker 2: to have faster times and it jumps.

63
00:02:44,919 --> 00:02:46,440
Speaker 3: It's a great question because if you're.

64
00:02:46,320 --> 00:02:47,919
Speaker 2: Like the tenth best track athlete and you do a

65
00:02:47,960 --> 00:02:49,359
Speaker 2: lot of drugs better than the.

66
00:02:49,280 --> 00:02:53,720
Speaker 4: Best, probably there's only one way to find out.

67
00:02:54,160 --> 00:02:55,280
Speaker 2: So is going to do it?

68
00:02:55,400 --> 00:02:56,480
Speaker 3: These games need to happen.

69
00:02:56,680 --> 00:03:00,919
Speaker 4: The event roster includes individual sports such as athletics meaning

70
00:03:00,960 --> 00:03:05,639
Speaker 4: track and field, aquatics, gymnastics, strength and combat. I would

71
00:03:05,680 --> 00:03:06,520
Speaker 4: watch these.

72
00:03:06,639 --> 00:03:10,440
Speaker 2: But what we don't have on that list.

73
00:03:11,680 --> 00:03:12,480
Speaker 3: Is drissage.

74
00:03:12,639 --> 00:03:19,359
Speaker 4: Trissage Yeah, for the uninitiated, dressage is horse dancing effectively,

75
00:03:19,480 --> 00:03:22,000
Speaker 4: just go on YouTube look it up. It's a ridiculous

76
00:03:22,000 --> 00:03:24,720
Speaker 4: sport that, for better or worse, I've partake in. I'm

77
00:03:24,760 --> 00:03:27,480
Speaker 4: not sure if when I enter the enhanced games, which

78
00:03:27,480 --> 00:03:30,240
Speaker 4: I will, whether I take the drugs, the horse takes

79
00:03:30,280 --> 00:03:32,920
Speaker 4: the drugs. Do we both take the drugs the drugs?

80
00:03:32,960 --> 00:03:35,640
Speaker 2: Have you or your horse ever been like offered drugs?

81
00:03:35,640 --> 00:03:38,600
Speaker 2: Has ever been like a controversy at your dressage?

82
00:03:38,640 --> 00:03:41,760
Speaker 4: We're not that good maybe in higher levels of the sport,

83
00:03:41,800 --> 00:03:45,240
Speaker 4: but what we're doing, it's very loosely dressage.

84
00:03:46,080 --> 00:03:51,680
Speaker 3: Let's talk about the time, moving gracefully along. Elon Musk.

85
00:03:51,880 --> 00:03:54,320
Speaker 4: The big news this week is that Tesla came out

86
00:03:54,360 --> 00:03:57,920
Speaker 4: with their proxy statement. Two items of interest. They're going

87
00:03:57,960 --> 00:04:01,040
Speaker 4: to have shareholders to vote again on that twenty eighteen

88
00:04:01,600 --> 00:04:04,120
Speaker 4: pay package of fifty six billion dollars that was voided

89
00:04:04,200 --> 00:04:07,400
Speaker 4: by a Delaware judge, and related to that, they're going

90
00:04:07,440 --> 00:04:10,400
Speaker 4: to vote on whether to move Tesla's state of incorporation

91
00:04:11,080 --> 00:04:12,680
Speaker 4: from Delaware to Texas.

92
00:04:12,680 --> 00:04:13,520
Speaker 3: What do you want to start with?

93
00:04:13,640 --> 00:04:17,719
Speaker 2: They're interrelated, Yes, right, he got paid a giant snack

94
00:04:17,760 --> 00:04:20,400
Speaker 2: of options in about twenty eighteen. Everyone says they're worth

95
00:04:20,400 --> 00:04:23,839
Speaker 2: fifty six billion dollars. Whatever they're worth, like forty billion dollars,

96
00:04:23,880 --> 00:04:26,440
Speaker 2: fifty billion dollars, just like a conventional number that people

97
00:04:26,480 --> 00:04:28,080
Speaker 2: attached to it because you know, go up and down

98
00:04:28,080 --> 00:04:29,599
Speaker 2: with the stock. But right now they're with forty billion

99
00:04:29,640 --> 00:04:33,000
Speaker 2: dollars and judge took them away in January. I said

100
00:04:33,000 --> 00:04:35,200
Speaker 2: that was too much to pay him and it wasn't

101
00:04:35,200 --> 00:04:37,560
Speaker 2: properly approved by the shareholders. And so they're going back

102
00:04:37,600 --> 00:04:40,560
Speaker 2: to the shareholders to one get it properly approved and

103
00:04:40,640 --> 00:04:43,039
Speaker 2: two never has to deal with the Delaware judge again

104
00:04:43,040 --> 00:04:44,400
Speaker 2: because they're going to move to Texas.

105
00:04:44,600 --> 00:04:47,320
Speaker 4: Like you said, these are two intimately related issues. But

106
00:04:47,360 --> 00:04:49,800
Speaker 4: sticking with the pay package, which everyone is saying is

107
00:04:49,800 --> 00:04:52,599
Speaker 4: fifty six billion dollars, maybe it's forty billion dollars, but

108
00:04:52,720 --> 00:04:55,599
Speaker 4: the vote is in June. Yeah, are they going to

109
00:04:55,640 --> 00:04:57,320
Speaker 4: approve it again these shareholders?

110
00:04:57,560 --> 00:05:00,000
Speaker 2: I think so. The proxy quits a lot of letters

111
00:05:00,080 --> 00:05:02,760
Speaker 2: from individual shareholders saying how much they love Elon Musk

112
00:05:02,800 --> 00:05:05,000
Speaker 2: and how they're going to approve it. And also, by

113
00:05:05,000 --> 00:05:08,280
Speaker 2: the way, letters from like trope price right big shareholders too.

114
00:05:08,720 --> 00:05:10,240
Speaker 2: It's interesting if you were a S. Sherelder in like

115
00:05:10,240 --> 00:05:12,760
Speaker 2: twenty twenty one, or even like December of last year,

116
00:05:12,839 --> 00:05:14,840
Speaker 2: I think you would say this pay package was worth it.

117
00:05:14,880 --> 00:05:16,520
Speaker 2: In twenty eighteen, they said we're going to pay youl

118
00:05:16,520 --> 00:05:19,359
Speaker 2: On Musk fifty six billion dollars if he takes the

119
00:05:19,360 --> 00:05:21,760
Speaker 2: market cap of Tesla from like sixty billion dollars, like

120
00:05:21,800 --> 00:05:24,280
Speaker 2: six hundred and fifty billion dollars, And at the time

121
00:05:24,320 --> 00:05:27,440
Speaker 2: that seemed like a real stretch goal. And then he

122
00:05:27,520 --> 00:05:32,120
Speaker 2: did it really quickly, and so all the shareholders got rich,

123
00:05:32,240 --> 00:05:34,120
Speaker 2: like they made a lot of money on Tesla, and

124
00:05:34,160 --> 00:05:36,839
Speaker 2: I think they felt a real sense of gratitude, and

125
00:05:36,920 --> 00:05:39,279
Speaker 2: so I think very few shoholders were complaining about his

126
00:05:39,320 --> 00:05:42,000
Speaker 2: pay package, but one did ensued. Right, Yes, I think

127
00:05:42,040 --> 00:05:44,560
Speaker 2: the shareholders were happy with it. But now if you

128
00:05:44,640 --> 00:05:47,479
Speaker 2: go back to them and say you want to reprove

129
00:05:47,480 --> 00:05:49,880
Speaker 2: it again, they could be like, we already got whatever

130
00:05:49,880 --> 00:05:51,640
Speaker 2: he did. He did the stuff that made it a

131
00:05:51,680 --> 00:05:55,000
Speaker 2: six hundred and fifty billion dollar company, So if we

132
00:05:55,040 --> 00:05:57,400
Speaker 2: can get those passed efforts for free, why shouldn't they

133
00:05:57,400 --> 00:05:59,080
Speaker 2: get it for free. They feel grateful, but did they

134
00:05:59,080 --> 00:06:01,520
Speaker 2: feel fifty six billion dollars grateful? But that' said if

135
00:06:01,560 --> 00:06:03,800
Speaker 2: you're a Tesla scherolder at this point, you're playing a

136
00:06:03,800 --> 00:06:07,480
Speaker 2: longer game, and rightly or wrongly, I think Tesla sherolders

137
00:06:07,600 --> 00:06:12,640
Speaker 2: assume that Elon Musk and his continued affection are essential

138
00:06:12,640 --> 00:06:15,000
Speaker 2: to the value of Tesla stock. And so if they

139
00:06:15,120 --> 00:06:18,320
Speaker 2: vote down this paypackage, like, will he quit in a huff?

140
00:06:18,480 --> 00:06:21,040
Speaker 2: Maybe he's got a lot going on, right, He's got

141
00:06:21,040 --> 00:06:23,599
Speaker 2: a lot of distractions, so he could quit in a huff.

142
00:06:24,160 --> 00:06:28,680
Speaker 2: And although his mercurial stewardship has not been great for

143
00:06:28,680 --> 00:06:30,160
Speaker 2: the stock price in the last couple of years, he

144
00:06:30,240 --> 00:06:31,880
Speaker 2: quits in a huff, that's going to take the stock.

145
00:06:32,080 --> 00:06:34,599
Speaker 4: Think, Yeah, I mean the stock's already down forty percent

146
00:06:34,680 --> 00:06:35,080
Speaker 4: year to day.

147
00:06:35,320 --> 00:06:37,680
Speaker 2: Yeah, Like it's been a rough ride. But still I

148
00:06:37,680 --> 00:06:39,919
Speaker 2: think they want him there. It's not like if they

149
00:06:40,040 --> 00:06:41,800
Speaker 2: vote this dan, he'll come back and be like, Okay, fine,

150
00:06:41,800 --> 00:06:43,760
Speaker 2: can you be like two billion dollars? Like I think, like,

151
00:06:43,760 --> 00:06:45,680
Speaker 2: if they vote this down, he's going to be really mad,

152
00:06:46,000 --> 00:06:46,600
Speaker 2: really mad.

153
00:06:47,040 --> 00:06:49,279
Speaker 4: I guess I have two kind of related points to that,

154
00:06:49,400 --> 00:06:51,920
Speaker 4: to what you're saying, what is the key man risk

155
00:06:52,040 --> 00:06:55,320
Speaker 4: to Tesla, Like how much does Tesla need Elon Musk

156
00:06:55,360 --> 00:06:58,000
Speaker 4: at this point is something I think about all the time.

157
00:06:58,240 --> 00:06:59,960
Speaker 4: This is an established company at this point.

158
00:07:00,120 --> 00:07:01,919
Speaker 2: No, I agree with that it's an established company. They

159
00:07:01,920 --> 00:07:03,680
Speaker 2: could probably operate on its own. It's not like the

160
00:07:03,720 --> 00:07:06,040
Speaker 2: stock has been continuing to go out from strength to strength.

161
00:07:06,120 --> 00:07:08,039
Speaker 2: It's been a rough time. I do think that there's

162
00:07:08,040 --> 00:07:10,440
Speaker 2: probably still a valuation premium for Elon Musk, And I

163
00:07:10,520 --> 00:07:14,120
Speaker 2: think like it's a somewhat retail have you stocked the

164
00:07:14,120 --> 00:07:16,040
Speaker 2: a lot of people who like Elon Musk and the stock,

165
00:07:16,120 --> 00:07:18,320
Speaker 2: And I think if he were to leave, that would

166
00:07:18,600 --> 00:07:20,640
Speaker 2: be bad. But I'm not sure of that in the

167
00:07:20,640 --> 00:07:22,400
Speaker 2: way that I might have been in like twenty twenty one.

168
00:07:22,600 --> 00:07:22,840
Speaker 3: Yeah.

169
00:07:22,920 --> 00:07:24,560
Speaker 2: I also think, by the way, whatever your sort of

170
00:07:24,640 --> 00:07:27,160
Speaker 2: economic calculation, I do think that some of the sheolders

171
00:07:27,200 --> 00:07:29,040
Speaker 2: at least are like, we agreed to pay him to

172
00:07:29,080 --> 00:07:33,240
Speaker 2: these options. We voted on it a court in a

173
00:07:33,280 --> 00:07:38,160
Speaker 2: weird technical opinion strike that down, and we don't think

174
00:07:38,200 --> 00:07:41,440
Speaker 2: that's fair. We think it's like bad for corporate democracy

175
00:07:41,480 --> 00:07:43,920
Speaker 2: and also bad for like fairness to Elon Musk, And

176
00:07:43,960 --> 00:07:46,040
Speaker 2: so we're going to give him that fifty six billion

177
00:07:46,040 --> 00:07:48,760
Speaker 2: dollars back anyway. I think there's probably some of that

178
00:07:48,840 --> 00:07:51,720
Speaker 2: going on among some of the shell including some of

179
00:07:51,720 --> 00:07:52,880
Speaker 2: the institutional shoolders.

180
00:07:53,080 --> 00:07:57,600
Speaker 4: Even if this is approved, we'll just get avoided again.

181
00:07:57,640 --> 00:07:59,800
Speaker 4: Like how does this work if they approve it again.

182
00:08:00,160 --> 00:08:03,400
Speaker 2: It's a fascinating question, I think, and Tesla thinks the

183
00:08:03,440 --> 00:08:05,600
Speaker 2: answer is that if they approve it again, this time

184
00:08:05,600 --> 00:08:08,280
Speaker 2: it will stick, right, because what happened last time is

185
00:08:08,320 --> 00:08:10,840
Speaker 2: they approved it and the judge found that the shaholders

186
00:08:10,880 --> 00:08:13,280
Speaker 2: were not fully informed of all the conflicts of interest

187
00:08:13,720 --> 00:08:17,880
Speaker 2: involved in setting his pay package. Now they're fully informed,

188
00:08:18,080 --> 00:08:20,640
Speaker 2: in part because, like Tesla went back and gave disclosures,

189
00:08:20,640 --> 00:08:22,840
Speaker 2: but also they just detached the judge's opinion to the

190
00:08:22,840 --> 00:08:25,240
Speaker 2: proxy statement to be like anything that the judge found

191
00:08:25,320 --> 00:08:28,240
Speaker 2: bad here, you can read it right. So I think

192
00:08:28,240 --> 00:08:30,520
Speaker 2: they have to be fully informed. There's no problem with

193
00:08:30,560 --> 00:08:35,200
Speaker 2: the vote, but the law and this is not super clear,

194
00:08:35,480 --> 00:08:38,360
Speaker 2: and they say in the proxy statement, we're not totally

195
00:08:38,400 --> 00:08:40,319
Speaker 2: sure what the effect of this will be. I think

196
00:08:40,360 --> 00:08:43,560
Speaker 2: there's some argument that the disgruntled shaholder can sue again

197
00:08:44,200 --> 00:08:47,680
Speaker 2: and the judge again gets to decide if the pay

198
00:08:47,679 --> 00:08:50,080
Speaker 2: package is fair, and we kind of know she thinks

199
00:08:50,080 --> 00:08:52,640
Speaker 2: it isn't so it might get struckt. But the other

200
00:08:52,640 --> 00:08:53,760
Speaker 2: thing I want to say is that I don't know

201
00:08:53,800 --> 00:08:55,880
Speaker 2: what the disgruntled cherold. There's a guy named Richard turnouta.

202
00:08:55,920 --> 00:08:56,960
Speaker 2: I don't know what he thinks. I don't know if

203
00:08:56,960 --> 00:08:58,400
Speaker 2: he wants to do this again. But you know who

204
00:08:58,480 --> 00:09:02,800
Speaker 2: cares his lawyers who when they won in the Delaware

205
00:09:02,880 --> 00:09:05,640
Speaker 2: court and they strike down this fifty six billion dollar

206
00:09:05,720 --> 00:09:07,520
Speaker 2: pay package. They went to the court and they said,

207
00:09:07,520 --> 00:09:09,960
Speaker 2: we want five point six billion dollars worth of Tesla

208
00:09:10,040 --> 00:09:13,480
Speaker 2: stock as a fee for this win. Right, And their

209
00:09:13,520 --> 00:09:16,600
Speaker 2: theory is, we saved shareholders all this money by clawing

210
00:09:16,640 --> 00:09:18,840
Speaker 2: back the fifty six billion dollars from Elon Musk. If

211
00:09:18,840 --> 00:09:20,720
Speaker 2: the shareholders give you On Musk the fifty six billion

212
00:09:20,760 --> 00:09:22,520
Speaker 2: dollars back, they haven't gotten the fee yet, right, it's

213
00:09:22,520 --> 00:09:24,959
Speaker 2: still in court. Yeah, if they give the money back,

214
00:09:25,000 --> 00:09:27,960
Speaker 2: what is their argument that they save the shareholders any money? Like, Yeah,

215
00:09:28,080 --> 00:09:31,160
Speaker 2: They've got a lot of money riding on the argument

216
00:09:31,200 --> 00:09:34,360
Speaker 2: that Musk's compensation actually got clawed back, so they care.

217
00:09:34,640 --> 00:09:38,079
Speaker 4: Yeah, let's talk about the second part of what happened Texas.

218
00:09:38,200 --> 00:09:40,320
Speaker 4: Are they going to run into this problem again in

219
00:09:40,360 --> 00:09:42,040
Speaker 4: Texas moving to Texas.

220
00:09:42,520 --> 00:09:43,920
Speaker 3: What does that do for Tesla?

221
00:09:44,280 --> 00:09:47,280
Speaker 2: They say that moving to Texas makes sense because they're

222
00:09:47,440 --> 00:09:50,280
Speaker 2: big factories in Texas, their headquarters in Texas. Elon lives

223
00:09:50,280 --> 00:09:52,840
Speaker 2: in Texas, and so they have to meet their incorporation

224
00:09:52,920 --> 00:09:55,320
Speaker 2: to Texas because that just makes sense. No other company

225
00:09:55,320 --> 00:09:56,880
Speaker 2: thinks that, right, Like, that's not really a thing, Like

226
00:09:56,920 --> 00:09:59,600
Speaker 2: every company is incorporated in Delaware and very few are

227
00:09:59,640 --> 00:10:03,160
Speaker 2: located in Delaware. But it's what they say. The answer is,

228
00:10:03,200 --> 00:10:05,360
Speaker 2: nobody knows. There's a lot of Delaware corporate law and

229
00:10:05,360 --> 00:10:07,760
Speaker 2: there's not a lot of corporate law anywhere else because

230
00:10:07,880 --> 00:10:11,560
Speaker 2: most big companies that have big lawsuits are incorporated in Delaware,

231
00:10:11,600 --> 00:10:13,560
Speaker 2: and so that's where all the cases are, Tesla says,

232
00:10:13,600 --> 00:10:16,960
Speaker 2: And it's proxy that they think the law in Texas

233
00:10:17,080 --> 00:10:19,319
Speaker 2: is mostly the same as the law in Delaware. I

234
00:10:19,360 --> 00:10:24,560
Speaker 2: think it's probably true. But everyone kind of assumes that

235
00:10:24,720 --> 00:10:29,440
Speaker 2: if this had all happened in Texas, and if a

236
00:10:29,559 --> 00:10:32,160
Speaker 2: shareholder had sued Elon Musk in Texas to get back

237
00:10:32,200 --> 00:10:35,040
Speaker 2: the fifty six billion dollars, a Texas judge would have

238
00:10:35,040 --> 00:10:38,400
Speaker 2: been like, nah, Elon Musk can keep that money. There's

239
00:10:38,400 --> 00:10:42,120
Speaker 2: no basis for assuming that nobody knows. It seems that way,

240
00:10:42,480 --> 00:10:44,800
Speaker 2: and clearly Elon Musk assumes it because as soon as

241
00:10:44,800 --> 00:10:47,200
Speaker 2: the Delaware opinion came out, he's like, we're moving to Texas.

242
00:10:47,600 --> 00:10:50,120
Speaker 2: By the way, that happened, the opinion came out and

243
00:10:50,160 --> 00:10:51,800
Speaker 2: he was like, we're moving to Texas right away. He

244
00:10:51,880 --> 00:10:53,880
Speaker 2: was saying it on Twitter. But Tesla now and it's

245
00:10:53,920 --> 00:10:56,520
Speaker 2: proxy statement has to explain why it's moving to Texas,

246
00:10:56,960 --> 00:11:00,440
Speaker 2: and it describes this very thorough process that did to

247
00:11:00,520 --> 00:11:03,640
Speaker 2: evaluate moving to Texas. So it formed a special committee

248
00:11:03,640 --> 00:11:06,600
Speaker 2: of independent directors. There's one person on the committee, was

249
00:11:06,600 --> 00:11:09,320
Speaker 2: this name Elon Musk. No, no, it's a truly independent director.

250
00:11:09,400 --> 00:11:12,240
Speaker 2: Her name is Kathleen Wilson Thompson. The special committee met

251
00:11:12,280 --> 00:11:15,320
Speaker 2: sixteen times for more than twenty six hours, says the Proxy,

252
00:11:15,440 --> 00:11:18,679
Speaker 2: which is like a fun thing to imagine, Like I

253
00:11:18,800 --> 00:11:21,640
Speaker 2: first imagined it as like I met four hours today

254
00:11:21,640 --> 00:11:23,760
Speaker 2: with the money stuff Committee. Like I was like typing

255
00:11:23,760 --> 00:11:25,360
Speaker 2: on my computer. I was like, oh, there's a meeting.

256
00:11:25,440 --> 00:11:27,559
Speaker 2: But in fact she met with like her lawyers, so

257
00:11:27,600 --> 00:11:29,319
Speaker 2: she did. There were real meetings, but just she was

258
00:11:29,320 --> 00:11:33,119
Speaker 2: the only director at the meetings, but they the committee

259
00:11:33,320 --> 00:11:36,319
Speaker 2: evaluated all fifty states to decide. It's like throwing darts,

260
00:11:36,320 --> 00:11:38,280
Speaker 2: being like, which state should we move to, and like

261
00:11:38,320 --> 00:11:40,559
Speaker 2: it just so happens that the best state turned out

262
00:11:40,559 --> 00:11:44,240
Speaker 2: to be Texas. Coincidentally, the same thing that Elon Musk

263
00:11:44,280 --> 00:11:46,360
Speaker 2: was treating about like two months ago. It's beautiful, So

264
00:11:46,640 --> 00:11:47,400
Speaker 2: it worked out nicely.

265
00:11:47,640 --> 00:11:49,240
Speaker 3: Yeah, it's good that it turned out that way.

266
00:11:49,320 --> 00:11:50,839
Speaker 2: By the way, you asked her, if the laws move

267
00:11:50,920 --> 00:11:53,600
Speaker 2: with them. I wrote this before there's some small chance

268
00:11:54,040 --> 00:11:57,559
Speaker 2: of a Delaware judge saying, no, you're not allowed to

269
00:11:57,559 --> 00:12:00,400
Speaker 2: move to Texas because you're only moving to Texas to

270
00:12:00,520 --> 00:12:01,200
Speaker 2: pay Elon.

271
00:12:01,080 --> 00:12:03,640
Speaker 3: Musk more and which seems to reasonable.

272
00:12:03,679 --> 00:12:06,360
Speaker 2: That is like a violation of your pretty shadds to

273
00:12:06,400 --> 00:12:09,320
Speaker 2: your Delaware shareholders, so we're gonna stop you. I wrote

274
00:12:09,320 --> 00:12:11,160
Speaker 2: that in like January. I thought that was like some

275
00:12:11,280 --> 00:12:14,200
Speaker 2: extremely funny theoretical chance of that happening. Since then, there's

276
00:12:14,200 --> 00:12:16,520
Speaker 2: been like a Delaware court decision that makes it less likely.

277
00:12:16,640 --> 00:12:19,760
Speaker 2: So I don't think that's gonna happen, but it would

278
00:12:19,760 --> 00:12:20,600
Speaker 2: be really funny.

279
00:12:20,720 --> 00:12:22,400
Speaker 4: So I have one point, and I also have a question.

280
00:12:22,559 --> 00:12:24,880
Speaker 4: I guess I'll start with the point and that is

281
00:12:24,920 --> 00:12:28,480
Speaker 4: that there is like a human psychology component to this,

282
00:12:28,720 --> 00:12:32,520
Speaker 4: because I remember when this happened in January that it

283
00:12:32,559 --> 00:12:36,280
Speaker 4: was voided this pay package. My suggestion to Elon Musk

284
00:12:36,280 --> 00:12:38,959
Speaker 4: would be, why don't you just have Tesla do a dividends.

285
00:12:39,000 --> 00:12:41,800
Speaker 4: Mark Zuckerberg did that with Meta. Now he's going to

286
00:12:41,840 --> 00:12:44,679
Speaker 4: make like seven hundred million dollars a year. Mark Zuckerberg

287
00:12:44,760 --> 00:12:47,440
Speaker 4: obviously owns a lot more Meta share, so it makes

288
00:12:47,440 --> 00:12:50,320
Speaker 4: more sense there. But you made the point to me

289
00:12:50,440 --> 00:12:53,960
Speaker 4: that Elon Musk isn't trying to make normal extremely wealthy

290
00:12:54,000 --> 00:12:58,800
Speaker 4: man money. He has like insane aspirations that he needs all.

291
00:12:58,679 --> 00:12:59,240
Speaker 3: This money for.

292
00:12:59,440 --> 00:13:01,520
Speaker 2: He owns it. My aloraity of Tesla, he's a controlling herl.

293
00:13:01,559 --> 00:13:03,200
Speaker 2: Everybody owns like twenty percent of the stock, so a

294
00:13:03,200 --> 00:13:05,360
Speaker 2: dividend would go mostly to other people, and like they're

295
00:13:05,400 --> 00:13:07,160
Speaker 2: not so rolling in cash, they could pay at like

296
00:13:07,200 --> 00:13:09,679
Speaker 2: tens of billions of dollars or dividends. Mark Zuckerwood gets

297
00:13:09,679 --> 00:13:12,480
Speaker 2: a dividend because he likes to go water skiing or

298
00:13:12,520 --> 00:13:14,480
Speaker 2: whatever it is that he does, right, hoverboarding, He.

299
00:13:14,480 --> 00:13:16,920
Speaker 3: Has cows, right house, Yeah, archery.

300
00:13:17,000 --> 00:13:19,320
Speaker 2: I don't know all sorts of normal things hobbies. Yeah,

301
00:13:19,400 --> 00:13:22,520
Speaker 2: like moderately expensive hobbies some of them. But Elon Musk's

302
00:13:22,520 --> 00:13:27,360
Speaker 2: hobbies are like brain implants, going to Mars, buying Twitter.

303
00:13:27,880 --> 00:13:31,040
Speaker 2: I'm forgetting a few, but like, he's not like looking

304
00:13:31,080 --> 00:13:33,080
Speaker 2: to spend money on a nice vacation. He's looking to

305
00:13:33,120 --> 00:13:36,520
Speaker 2: have tens of billions of dollars to fund going to Mars,

306
00:13:36,920 --> 00:13:39,960
Speaker 2: and so he needs these giant pay packages every now

307
00:13:40,000 --> 00:13:41,520
Speaker 2: and then to pursue his next ambition.

308
00:13:41,640 --> 00:13:43,679
Speaker 4: You're not going to get that from your dividend checks.

309
00:13:43,679 --> 00:13:46,120
Speaker 4: And then my question for you is, what do you

310
00:13:46,160 --> 00:13:49,280
Speaker 4: think is the most interesting way that this proxy.

311
00:13:48,960 --> 00:13:49,800
Speaker 3: Vote could turn out?

312
00:13:49,800 --> 00:13:53,280
Speaker 4: What would be the most interesting chain of events for you?

313
00:13:53,800 --> 00:13:56,199
Speaker 2: Look, I love the idea of a Delaware court preventing

314
00:13:56,280 --> 00:13:58,640
Speaker 2: Musk from leaving for Texas. I think that would be

315
00:13:58,720 --> 00:14:02,439
Speaker 2: extremely funny. But I actually think the simpler answer is funnier,

316
00:14:02,480 --> 00:14:05,360
Speaker 2: which is if the shareholders vote this down, that's wild.

317
00:14:05,600 --> 00:14:08,080
Speaker 2: Like he'll quit in a huff on Twitter like that day. Yeah,

318
00:14:08,280 --> 00:14:12,040
Speaker 2: it'll be an amazing thread of tweets and it will

319
00:14:12,120 --> 00:14:17,040
Speaker 2: be an amazing corporate debacle. Whatever time he's devoting to Tesla,

320
00:14:17,120 --> 00:14:19,440
Speaker 2: he'll go and devote to some other wild thing and

321
00:14:19,480 --> 00:14:22,840
Speaker 2: that'll be wild, and Tesla will like find its way,

322
00:14:22,880 --> 00:14:25,320
Speaker 2: as you know, it'll get back that fifty million dollars

323
00:14:25,360 --> 00:14:27,200
Speaker 2: and find its way as a company not controlled by

324
00:14:28,000 --> 00:14:30,560
Speaker 2: a wild, wild sequence of events.

325
00:14:30,640 --> 00:14:33,080
Speaker 4: Now, in my mind, would be the most interesting scenario

326
00:14:33,160 --> 00:14:34,880
Speaker 4: as well, and then we could truly find out what

327
00:14:34,960 --> 00:14:36,200
Speaker 4: the Elon Musk premium is.

328
00:14:36,440 --> 00:14:38,440
Speaker 2: The thing about Elon Musk companies is that if you're

329
00:14:38,440 --> 00:14:41,160
Speaker 2: an investor in Elon Musk companies, like you like Elon Musk,

330
00:14:41,240 --> 00:14:43,280
Speaker 2: like that's just how it goes, right, Like you're not

331
00:14:43,440 --> 00:14:45,920
Speaker 2: there because you like the assets but think they're mismanaged,

332
00:14:45,960 --> 00:14:47,960
Speaker 2: Like you're there because you like Elon Musk. It would

333
00:14:48,000 --> 00:14:51,360
Speaker 2: be really shocking for the investors in an Elon Musk

334
00:14:51,400 --> 00:14:54,280
Speaker 2: company to vote against them in such a striking way.

335
00:14:54,520 --> 00:14:56,480
Speaker 4: Do you want to talk about Elon Musk for like

336
00:14:56,520 --> 00:14:58,440
Speaker 4: twenty five more minutes or do you think we should

337
00:14:58,480 --> 00:14:58,720
Speaker 4: move on?

338
00:14:58,920 --> 00:15:02,360
Speaker 2: I saw your look of like I have wrapped this

339
00:15:02,440 --> 00:15:05,840
Speaker 2: up so nicely, and then Matt comes in with more stuff.

340
00:15:05,880 --> 00:15:07,920
Speaker 2: I have some more stuff, but if're gonna wrap it up, never.

341
00:15:07,840 --> 00:15:10,120
Speaker 3: Mind, Stay tuned, Stay tuned.

342
00:15:10,120 --> 00:15:11,280
Speaker 2: There's always more lock.

343
00:15:19,320 --> 00:15:21,520
Speaker 1: If you want to listen to the whole episode. We'll

344
00:15:21,600 --> 00:15:23,680
Speaker 1: leave a link in the show notes, or you can

345
00:15:23,720 --> 00:15:27,280
Speaker 1: find it by searching money Stuff the podcast wherever you

346
00:15:27,320 --> 00:15:30,400
Speaker 1: listen to your podcasts. The elon Ink crew will be

347
00:15:30,440 --> 00:15:34,640
Speaker 1: back in your feed tomorrow with a brand new episode.