[0]: https://www.cnbc.com/2022/04/20/tesla-tsla-earnings-q1-2022....
Musk: I can haz money?
Bank: You said that Twitter isn't going to be a way to make money. That you "don't care about the economics at all". Your exact words.
Musk: ...
Bank: ...
Musk: Give me money
A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.
Just because you have a lot of money doesn't mean you'll make payments on a loan.
The fact that so many things require a high credit score is a forcing function for you to take on these debt instruments, and the credit score is a way for the system to optimize that it get its money.
The entire system is gamed against the consumers unwittingly or unwillingly forced to participate.
Not a bad way to buy stuff if you have the means to pay it off.
Does it really?
I have a very high credit score but putting a large charge on one credit card (nowhere close to maxing it out though) dramatically drops my credit score for one month until I pay it off in full at the end of the month.
I pay my child's tuition in full for the year each August (school in California is way too expensive so it's a lot of money, but that's a different topic). I put it on the credit card to get some cash back. My credit score drops by about 150 points right away. Once I get the bill at the end of the cycle and pay it off, the credit score goes right back to where it was before. I don't get any bump though.
“Nah.”
“Alright, we don’t need BIGINT in the ‘balance’ column.”
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.
Here the bank can reclaim what is owed via other means.
Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
This is a insanely risky vanity project.
Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
In this case, MS has offered him a loan for 20% of the value of his stock.
Just look at what recently happened in the nickel markets on the London Metals Exchange when a Chinese Nickel Producer had a margin call against a $2bn short position.
Tldr: the brokers liquidated their position due to the unnecessary risk of having a margin call over a weekend.
Only one way to find out though.
I would not bet against Musk.
> (ii) A separate debt commitment letter, dated April 20, 2022 (the “Margin Loan Commitment Letter”), from Morgan Stanley Senior Funding, Inc. and certain other financial institutions party thereto as commitment parties (collectively, the “Margin Loan Commitment Parties”) pursuant to which the Margin Loan Commitment Parties have committed to provide $12.5 billion in margin loans (the “Margin Loan Facility”), the proceeds of which will be distributed or otherwise made available to Purchaser; and
The letter: https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
So maybe he hopes to sell his shares to "activist buyers" who want the takeover to succeed and therefore have no interest in dropping the share price.
Of course that is assuming any of the purported motives are real and not just an act.
Someone remind me again why this isn't a cult?
I care it's the best performing stock in the last 5 and 10 years.
I care that Tesla is growing revenues at 50%+ over more than a decade, and profits even faster. Which is a better financial performance than Amazon has at similar stage.
What I do not care is your editorializing of Musk's character of calling me a cult member.
I guess I should be offended but then I take a look at my bank account and it kind of makes me not care about what you think about me or Musk.
Yet such people don't roam around screaming off the top of their lungs "Buterin is God!".
Ethereum, much like TSLA, much like betting on Trump back in 2016 are about calling an event and predicting what's gonna be the outcome of a socio-political movement.
Nobody is better prepared to predict such outcome than the guy who can keep his cool and openly admit that such social movement is really just BS and hot air, but that nonetheless it still has steam and room to grow among the populace for the time being.
What you don't want to be is a so called "true believer" as that would prevent you from jettisoning yourself once the movement runs out of steam, if you are a "true-true believer" you might find yourself storming the capitol...or in Musk's case the SEC building as that would be the aim of his rage when the socio-religious movement that he built runs out of steam as they eventually all do.
You haven't met crypto people yet, I take?
It's normal, you give people money and they worship you.
Think of the "cult" of Steve Jobs linked to Apple gains.
This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
You earn yourself that money by successfully making a prediction. By the same token when you win a poker game in Vegas you don't worship Steve Wynn for providing you the casino and a table. You gave yourself that money.
> Think of the "cult" of Steve Jobs linked to Apple gains.
Apple stock gains came as the product was becoming ubiquitous among the populace, matter of fact it slightly trailed the virality of the product. Same goes for Google, Microsoft, Oracle, Facebook etc.
That is the normal financial trajectory of a company, which differs from a socio-religious movement such as crypto, TSLA, a political candidate etc. Those are all based on promises about the future and getting people galvanized without ever delivering any actual product improving people's quality of life on a scale comparable to the promises made.
> This is nothing new. It's also not a real cult, it's more as admiring successful entrepreneurs.
This is exactly what gets people burned when the socio-religious movement implodes and they fail to jettison themselves. Don't admire, limit yourself to gauge the level of admiration that other people have for the guy and try predicting if it will expand or contract. That's an indicator of the health of the socio-religious movement so that you know when to jettison yourself.
sigh
Depending on his banking relationships, and other assets that he can use as collateral for the loan, he might be able to borrow a fairly high percentage of the current value of those assets as cash (maybe 50 to 70 or 80% or more if the collateral assets are diversified or the bank simply has high confidence in his effective credit rating or ability to repay — and he may be doing other business with that bank incentivizing them to give him a favorable deal).
I’m not a billionaire but by establishing a strong relationship with a bank, have been able to establish a credit line with a limit that is a high percentage of my assets that are invested by the bank in a diversified portfolio, along with other assets, at a low interest rate (mortgage levels - a credit line at approx 2.5% interest of an amount almost equal to my total assets at the bank).
I also recently refinanced my house with this bank starting last winter and was able to achieve getting a 15 year fixed mortgage at a 2.125% interest rate - a huge reduction from my previous rate of 3.5% on a 30 year. I now pay less per month and will own my home much sooner, consequently paying considerably less in interest over the remainder of the loan, and building much more wealth in the process.
With some wealth and favorable banking relationships you can accomplish things that most ordinary people don’t know about and I myself didn’t know about until I started looking into the possibilities. I am sure a billionaire has access to even more options than I can conceive of.
Remember that Musk is not only a shareholder of TSLA, but also an employee.
Therefore Tesla has zero input into margin rate broker decides to give Musk.
Not necessarily. It's conceivable that TSLA shareholders could interpret Elon Musk acquiring more political influence as good for TSLA. The question would be whether Musk can use control of twitter to actually influence politics in favor of his other companies. I don't know if that would actually work, but I think it's conceivable that many of those who own TSLA might believe it will work.
If I were a Tesla shareholder and this was his actual masterplan to maximize value for shareholders, I'd unload my stake in a heartbeat because I know his brand and business holdings will got tainted by his politics like what happened with Trump, and the plan will most likely backfire and decimate his business empire.
He should be. Solidly Republican-leaning Texans are buying and driving electric vehicles, in some cases believing that doing so is "owning the libs".
Tesla seemed like an impossible long shot 15 years ago, not just for the considerable technical and business challenges but also because most Americans were happily buying gas-gusslers and even fantastic hybrids like the Prius were still somewhat niche. At the time, not a single major car company was willing to invest seriously in building electric vehicles.
Now there's gigafactory right outside Austin. It's something I did not think would have been possible. Tesla has threaded a nearly impossible needle to get to where it is in 2022.
Could this attempt at buying Twitter be part of the same vice-signalling[1] schtick, then?
1. As in "See how I hate the same things you do?"
I don't dispute that he's a shrewd businessman and fancy visionary but when it comes to the world of politics, I have my doubts and reservations.
I'd like to see action and results first before I can vouch for him in that field.
In this day and age you don't become a billionaire without being good at politics. Navigating the regulatory state is an enormous task even when you don't have people laser-focused on you like Musk would due to his wealth and size of his companies.
Doesn’t have to be either-or. Marketing strategy is an important part of running Tesla and given the empirical dislike of media establishment of him, ensuring Twitter won’t go against him on a whim of the board seems strategically important.
> business holdings will got tainted by his politics like what happened with Trump
Is there data on Trump businesses doing materially worse overall after the taint? I assume the half of US that like him bolster it and the other half see the taint but the vector sum is material here.
To be clear: Elon buying Twitter doesn't necessarily trigger any of this. Elon using that influence to actually push Twitter around in ways that are "useful" to Tesla shareholders potentially does. For Tesla shareholders I'd say the risk here is much higher than any possible reward.
I mean we could speculate at length but the condition you’re describing already exists. People have polar reactions to him. Some hate with a passion, some love him. As for boycott, I’m not surprised if a lot of people already feel like they won’t buy a Tesla. Hard to imagine it can get worse from here.
He could get indicted for the FSD scamming and bring the whole thing tumbling down. If he stuck to just selling battery powered cars I'd be a lot more bullish on TSLA, but he hasn't and I think his antics represent a serious threat to the company in the long run.
- Paypal - Tesla - SpaceX
Tells me that his success isn't a fluke. You might get lucky with one of those companies, but with three? Don't think so.
I imagine a lot of "save the earth" and "Let's go to Mars" people overlap with the "Fuck Donald Trump" people. So letting Trump back on Twitter may cause them to swear off Teslas and DogeCoin. Alternatively, not letting Trump back may cause a bunch of truck-driving Texans he's been targeting to convert to electric to tell him to fuck off.
Bottom line, it puts Musk in the unenviable position of having to piss off a third of the country by deciding if Trump has a Twitter account. And while I would still swap with him in a second, this is an additional burden he's putting on himself.
Again, Tesla is known for creating more hype fewer cars, expensive messes and underdelivering on promises - he has stimulated the market into considering alternative fuel sources, which is good but in a lot of ways showmanship not vision, more top down execution and spectacle than forethought or planning.
SpaceX is the most evident of these, Musk is busy taking tax dollars and building efficient rockets, which I guess is good but not about getting us to Mars.
So I think you are right to call out pandering for sales, it's what musk does best, not tech or vision.
It's like calling flappy bird visionary - popular yes but preceded by hundreds of sidescroller helicopter games with a single button controlling altitude. Difference being Flappy broke in on a verdant mobile market while the two color LCD version I played 25 years ago on a flipphone didn't even have Facebook to get popular on, while Flash versions of the same thing that had been out for decades suffered from anti Flash sentiment and a smaller mindshare.
I think that's probably right. But do those Tesla shareholders believe it?
Can you tell me please what you mean by this?
AFAIK, Twitter is decentralized and fragmented for any actor to orchestrate an all-out political witch hunt where everyone on the platform goes against anyone in particular.
As far as Trump's business holdings go, Trump Organization runs like a brand management firm where they license and operate businesses with Trump name plastered on them, and I believe it's safe to say that the brand name's risk profile increased greatly due to the association with Trumpism from 2015 onward.
Twitter can find an excuse to ban his account (you can easily imagine this sort of risk exists after some of his recent meme tweets for example). I believe that is a single point of failure in Tesla PR strategy and a risk to be mitigated.
> brand name's risk profile increased
Risk profile sure but has the net value decreased or increased due to his presidency? I don’t have data to say it’s one way or another but looking at the downside without the upside as well is futile.
Musk could simply setup muskannouncements.com and blog his own tweets. No one may search for your announcements, but you better believe for his site he will still get full coverage.
ergo he's not doing it for his own announcements. it will be for a mix of media influence, and to address the bias in twitters 'fact checking'
I do agree he is doing things for reasons besides his own announcements, but I cannot agree that it's not part of it. Some people may simply not care enough about EVs to bother, as technologists we assume people see the world through our lens but I bet you many people have barely bothered to research his cars, they only know Tesla in a cursory fashion the same way you might know Nissan or Kia, or even computers (people exist who struggle to use anything more complex than a power button, these can be intelligent well read people even).
If you do use Twitter say, to follow XYZ (not even certain this is correct, I don't and struggle to use Twitter although I have a general idea how it works), if they see some promoted or retweet involving a Tesla, they are likely to learn more or investigate further. Owning this would be a non insignificant marketing advantage.
an app with push notifications. email. sms.
But Elon Musk is unique, HE would still get full coverage. Journalists and influencers and the fanboys and outrage crowd would post his stuff to twitter for him lol.
The question should be whether TSLA shareholders think he is, and I think most of them probably do.
(I don't own any TSLA, btw. But from what I've seen, many of his fanboys love him for being conniving while simultaneously claiming he's done nothing wrong. I believe this is an example of double-think. But the subject of this discussion is how these people might react to Elon Musk controlling Twitter, not whether their allegiance to Elon Musk is rational and rhetorically consistent.)
I really doubt that this is the case. I know that there's some real retail investor interest in the stock price movement and for a minority the fundamentals, but I'm sure there's some institutional investors and smart money who are in it for the long run and who analyze the company's financial statements, and evaluate and scrutinize the founder's every move and decision and this Dr. Evil's scheme of taking over Twitter and turn the platform as a tool of propaganda for Musk's financial interests and self-aggrandizement looks very concerning to put it mildly.
How is it any different than Bezos buying WaPo, in principle? That does not seem to have been detrimental to Amazon shareholders. And how does having a propaganda arm detrimental to Tesla financial interests? Marketing is a euphemism for propaganda after all.
(I can see legitimate Tesla shareholder concern for Musk attention being spread too thin, but to claim having Twitter makes things worse beyond his existing presence as a user seems ridiculous.)
It's not just the inevitability of less time to focus on managing TSLA (though running Twitter being a full time job was an issue for Dorsey, and he was only running one other company and wasn't at war with the management) but also the hints that this is an obsession.
I'd like to take this occasion to remind you that my first comment was a rebuttal to someone's argument speculating about the motive or rationale behind this acquisition and posited that Musk's control of the platform would afford him political influence to further his own financial interests, hence my opening reply.
Clarification: Positing that many TSLA shareholders presently believe Musk's control of twitter would afford him political influence to further his financial interests.
If I keep myself in my personal mindset of a Musk skeptic and try to model the behavior of TSLA shareholders, I would anticipate TSLA shareholders selling immediately (today, and every day previously in the past several years), because that is what I would do if I were gifted TSLA. But that's obviously not what TSLA shareholders do, so my personal mindset evidently makes for an inadequate model of TSLA shareholders.
If instead I try to suspend my own beliefs and imagine myself as somebody who thinks owning and holding TSLA is a good idea, then my new assumed mindset says that Elon Musk getting more power, by hook or by crook, is a good thing for me.
For that they would have to see through Musk's grift. Most retail TSLA holders are Musketeers and they truly believe that he is a visionary genius. To them, fluff like Twitter doesn't matter when they have the real life Tony Stark at the helm.
Because they wouldn't be taking control over the company... That's the purpose of those whole situation. Musk isn't just making a play on the basis of thinking "one dollar of TWTR is worth more than one share of TSLA"
His reason - or at least his public justification - for that sale was to deliberately generate a tax liability. If you recall people were getting pretty bent about him not having such a thing, as a zillionaire.
Some people, a minority, from a particular political bend. the overwhelming majority of americans don’t consider his finances at all
It is still possible that he tries to raise 21 billion by selling stock but I doubt it. First if he actually wanted to do that, he would keep quiet while selling and then come out with the tender offer when he had the cash.