Elon Musk: Officially a fraud and piece of shit. Official or unofficial war criminal?

[Immaculate Vibes 114]

I actually kind of get Brisket’s point, but Twitter isn’t a newspaper. It’s a tech platform. Between all his ventures I’m sure he has some smart, motivated people that would like to work on something like Twitter. 

[Brisketexan 105095]

Agree that was a really bad take. But then again, if lawyers knew anything about business, they wouldn't practice law for the scraps they do for a living.

Counterpoint: our vocation gives us LOTS of experience with how successful/potentially successful businesses get turned into disasters/scraps that people fight about. Litigators get hired when shit has gone wrong, so after a time, we’ve seen a lot of shit that’s gone wrong, for a variety of reasons. We recognize causes and patterns.
We may not be able to tell you all the ways you can make a business successful, but we can tell you about the hundreds of ways you can kill it.

[South Austin 52463]

43 minutes ago, Brisketexan said:

We may not be able to tell you all the ways you can make a business successful, but we can tell you about the hundreds of ways you can kill it.

Just like Longhorn football fans!

[BabaYaga 15290]

14 hours ago, Snacks said:

Twitter is will become an elite thing.

Too late.  It's the medium of the established and elite already, especially the media and political class.  

[52-80 19150]

16 hours ago, We’reTexas said:

Where are you getting some sort of May deadline? He has until April 25 to actually sign the bank commitments (because it looks like he hasn’t).

Banks extending their offer until May

[Vegas64 673]

1 minute ago, BabaYaga said:

Too late.  It's the medium of the established and elite already, especially the media and political class.  

It's the medium of the poor and downtrodden as well. It really is an eclectic and transgressive channel in that there is a place for all. It's like reddit in that way.

There is zero doubt twitter out punches it weight class for what it is as a business and business model versus the outsized impact and influence it has on real time culture. Everybody knows the business sucks. Everyone knows Twitter is an entrenchment for real time news, updates, gossip, humor, connections, general zeitgeist, etc.

This is why Elon wants it-- he said as much, he can unlock the potential. Most people are of the mindset, based on Elon's track record, that if anyone can do it in short order he has a great shot as any. Especially compared to any PE firm.

Well, except Brisket, because he knows better than the rest of the business world. He has been a minor lawyer for a dozen years or so and he knows a savvy business operator when he sees one.

[52-80 19150]

I used to shit on twitter but after wading more than knee-deep I'm hooked. No point in comparing its active user count vs snap or tiktok or instagram or fb.  They all fell into different use cases (prob not by design), but prove they can coexist because of vastly distinct raison d'etre.  Due to its contents cadence and scope, i'd argue it has higher intangible value than all of them... maybe except FB.

[Brisketexan 105095]

36 minutes ago, Vegas64 said:

This is why Elon wants it-- he said as much, he can unlock the potential. Most people are of the mindset, based on Elon's track record, that if anyone can do it in short order he has a great shot as any. Especially compared to any PE firm.

Well, except Brisket, because he knows better than the rest of the business world. He has been a minor lawyer for a dozen years or so and he knows a savvy business operator when he sees one.

Naah, I'm not saying that Elon is doomed to fail.  Rather, I'm noting that 1) a cult of personality is rarely a good basis to support a conclusion, 2) the business and model of Twitter is significantly different than Elon's other ventures.  AND, I've seen plenty of businesses built on/dependent on a "strongman" leader approach fail, particularly when the business model or climate was different than the one in which the strongman found prior success.  Sure, it's all anecdotal experience, and past performance does not guarantee future results one way or the other.  But it makes me personally gun-shy.  That, and the "fanboi" aspect of all of this.  Anytime that someone's influence is built heavily on a fanboi dynamic, I'm skittish as hell.

[NotActuallyALonghorn 4976]

51 minutes ago, 52-80 said:

I used to shit on twitter but after wading more than knee-deep I'm hooked. No point in comparing its active user count vs snap or tiktok or instagram or fb.  They all fell into different use cases (prob not by design), but prove they can coexist because of vastly distinct raison d'etre.  Due to its contents cadence and scope, i'd argue it has higher intangible value than all of them... maybe except FB.

Yeah, you can't really make a comparison between daily active users. Twitter is used as an official communications medium by governments and almost all authorities business or otherwise. How many times has the news put up a facebook comment by the president versus a tweet? That tweet reaches way more people who don't look at it on the internet than the Facebook comment will. That does present a challenge as to how to monetize it, however, as most views for tweets are either quoted or embedded. Adds don't show up on embedded tweets, and the news doesn't pay royalties in order to be able to quote a tweet. If they tried to change that would it work?

[phdhorn 6224]

While Musk has been outspoken about his desire to see political balance come to Twitter, I don't think he's going to seriously re-structure the business model, as he doesn't have to.  And in fact, his #1 goal isn't political - but rather technical/autocratic:

Musk has been critical of Twitter’s failure to crack down on automated accounts – describing the bots earlier this month as the “single most annoying problem” on the platform.

The billionaire also slammed the bot problem during his recent appearance at a TED conference in Vancouver.

“A top priority I would have is eliminating the spam and scam bots and the bot armies that are on Twitter,” Musk said during the event. “They make the product much worse. If I had a Dogecoin for every crypto scam I saw, we’d have 100 billion Dogecoin.”

https://nypost.com/2022/04/22/elon-musk-plots-twitter-changes-defeat-the-spam-bots-or-die-trying/

Two other points:
1) Musk is an exceptional "engineerish" person - Bachelors' both in Economics and Physics, PhD work at the UPenn (before he "dropped out" to become an entrepreneur).  I think he knows social media platforms a lot more than people think.
2) His vision for Twitter I think isn't merely political - it's true exchange, free of any "diarrhea" of auto-shit and over-regulation.  I think he knows those fields well, both from a technical perspective, and most of all now, from 20+ years of real experience.

Five years ago the world was watching Tesla's problems and waiting for the final shoe to drop on it.  But Musk made shrewd changes on the fly, and now it's without question the leading paradigm-changing auto company much as Apple was in the early 2000's with tech.  I think he'll leave alone what isn't broken (which is probably the 80% of people on Twitter who don't post nor give any shits about politics) and streamline it and get rid of as much stink as possible.  If this is his aim, I'm all for it.

Edit:  Just for fun I looked it up again, and according to this 2021 (May) Pew Research poll, only 9% of Twitter users identify themselves as "Often" political posters.  Of the remaining 91%, 40% say "never," 30% say "rarely," and 20% say "sometimes."   And - surprise - political posts are made more by Repubs than Dems.  Anyway, the overwhelming majority of Twitter users do.not.care. about politics.  And if you use the "movers and shakers" argument (i.e. influence), that doesn't scour at all into the company's bottom line.  Musk is concerned first with finances, not politics.

I think Musk's desire for Twitter is to be a true communal exchange, beyond politics, as very few Twitter subscribers post about, or give any shits, about politics (maybe people aren't so dumb after all!).

Edited April 22, 2022 by phdhorn

[F250 28767]

 

[BabaYaga 15290]

1 hour ago, Brisketexan said:

Naah, I'm not saying that Elon is doomed to fail.  Rather, I'm noting that 1) a cult of personality is rarely a good basis to support a conclusion, 2) the business and model of Twitter is significantly different than Elon's other ventures.  AND, I've seen plenty of businesses built on/dependent on a "strongman" leader approach fail, particularly when the business model or climate was different than the one in which the strongman found prior success.  Sure, it's all anecdotal experience, and past performance does not guarantee future results one way or the other.  But it makes me personally gun-shy.  That, and the "fanboi" aspect of all of this.  Anytime that someone's influence is built heavily on a fanboi dynamic, I'm skittish as hell.

It's easy to throw darts from the sidelines, but you have to admit his track record for profitable ventures is impressive.  From PayPal, to autos, to AI, and to space travel.  Such a broad range of differing ventures.  When you look a his track record it's hard to argue.  25 out of 35 ventures were profitable.....that's pretty wild.  

Past performance, future risk, I get all that, but the "personality" has come largely after the market success, not before - which is worth noting.  

[We’reTexas 1473]

2 hours ago, 52-80 said:

Banks extending their offer until May

Oh, that’s not an outside date. They just won’t give a commitment for a margin loan for more than a month given the volatility of the collateral. Technically the banks can extend it five more months. And it would be impossible to close by early May. He has to have the tender open for at least twenty days. I’d guess late June if this goes anywhere. 

[Ag with kids 581]

3 hours ago, Vegas64 said:

Well, except Brisket, because he knows better than the rest of the business world. He has been a minor lawyer for a dozen years or so and he knows a savvy business operator when he sees one.

I'm pretty sure he's an adult now.

Edited April 22, 2022 by Ag with kids

[Immaculate Vibes 114]

 

[52-80 19150]

5 hours ago, Immaculate Vibes said:

 

Probably a relative value play against a long nasdaq position…but still, hilarious

[Sawbonz 27546]

Do musks endeavors actually turn a profit or his he just brilliant at getting people to give him money? Tesla seems to have a higher than average debt to earnings ratio, price to earnings is over 200 which seems ridiculous but has been over 1400 so idk, and they have never and probably never will pay a dividend. Seems like a house of cards at best. 

[52-80 19150]

1 hour ago, Sawbonz said:

Do musks endeavors actually turn a profit or his he just brilliant at getting people to give him money? Tesla seems to have a higher than average debt to earnings ratio, price to earnings is over 200 which seems ridiculous but has been over 1400 so idk, and they have never and probably never will pay a dividend. Seems like a house of cards at best. 

 

On 4/20/2022 at 3:08 PM, 52-80 said:

Because TSLA's earnings are growing, their trailing P/E will be <100 at the end of this year.  Basically, If you buy into an equity to lay claim to future profit (because you cant go back in time...), what you care about is profit growth, i.e. PEG. 

After this week's earnings, their new rolling P/E already dropped to 130.  And accelerating towards 80 by end of year. 

They already have the cleanest balance sheet in the business.  Companies debt is only 14% of shareholder equity (because if you borrow more cash, increase in asset and liability cancel eachother out).  Ford is at 280%.  GM is at 180%.  They're operating on borrowed money.

Finally, total shareholder return is what matter.  Your equity ownership either appreciates in price, or you get distribution in cash, or some mix of both.  Only difference is the tax treatment for people in certain jurisdiction.  (In most of the world it's taxed the same).  I mean if you wanted dividends you could have bought tobacco companies for the last 5 years and your P/L would have gone nowhere.

[Homercles 10205]

I certainly find this topic interesting, thanks for the varying viewpoints.  The theory that this is a cover to shed Tesla stock makes sense to me, at least much more than leveraging his entire existence in the name of ‘free speech’…I’m of the viewpoint that some governance by the major players in social media is a legit need given foreign bad actors, dangerous misinformation and unwashed morons that play confirmation bias as some kind of sport.  
 

That being said I’m fascinated by how some people have a near-fanatical need to defend Musk.  I don’t see him as some champion of ‘free speech’, he certainly has his own agenda  with a somewhat-mixed track record.

Carry on

[Sawbonz 27546]

5 minutes ago, 52-80 said:

 

After this week's earnings, their new rolling P/E already dropped to 130.  And accelerating towards 80 by end of year. 

They already have the cleanest balance sheet in the business.  Companies debt is only 14% of shareholder equity (because if you borrow more cash, increase in asset and liability cancel eachother out).  Ford is at 280%.  GM is at 180%.  They're operating on borrowed money.

Finally, total shareholder return is what matter.  Your equity ownership either appreciates in price, or you get distribution in cash, or some mix of both.  Only difference is the tax treatment for people in certain jurisdiction.  (In most of the world it's taxed the same).  I mean if you wanted dividends you could have bought tobacco companies for the last 5 years and your P/L would have gone nowhere.

I’m far from an expert but latest pe I saw was 205 which is 4 x that of Amazon. It seems Tesla stock price is high because people want it. Do people want it because it has inherent worth or because Elon Musk is a great salesman?

[Immaculate Vibes 114]

2 hours ago, Sawbonz said:

I’m far from an expert but latest pe I saw was 205 which is 4 x that of Amazon. It seems Tesla stock price is high because people want it. Do people want it because it has inherent worth or because Elon Musk is a great salesman?

Cult of Elon

[52-80 19150]

3 hours ago, Sawbonz said:

I’m far from an expert but latest pe I saw was 205 which is 4 x that of Amazon. It seems Tesla stock price is high because people want it. Do people want it because it has inherent worth or because Elon Musk is a great salesman?

Everyone has a different motive. The P/E is just a backward looking snapshot in time, and only stable if the denominator is stable.

You don’t pay 1000 for a share today because you expect the same 3.22 of quarterly earning next year.  You expect to get 4, and then 5 the next.  (Or if you choose to wait until it shows $4 EPS…the stock might no longer be just $1000)  

Amazon has had P/E in the thousands. Much of the last decade it was around 200…which is why my dumbass thought it was too “overpriced” to buy back then. 

[Neonmoon 38129]

The first few pages of this thread are hilarious in hindsight 

[gsoda3 3254]

I don't know Elon personally but I know people who know the heavy hitters in his orgs. Elon's strength lies in his ability to turn visions into reality. He has a hands off approach to how it's done but if you deviate from his vision you're out. In that he's much the same as mark Cuban. And apparently Elon's stable of talent is very good. I want this takeover to happen just to see who he'd put in charge as executive.

[We’reTexas 1473]

56 minutes ago, gsoda3 said:

I don't know Elon personally but I know people who know the heavy hitters in his orgs. Elon's strength lies in his ability to turn visions into reality. He has a hands off approach to how it's done but if you deviate from his vision you're out. In that he's much the same as mark Cuban. And apparently Elon's stable of talent is very good. I want this takeover to happen just to see who he'd put in charge as executive.

Comp won’t be an issue for senior management but I wonder if Twitter as a whole will be able to stay competitive from a talent perspective without a broad-based equity comp program. Talent competition is fierce right now and my friends there just say they’ll take their equity acceleration and peace out. I certainly wouldn’t go to a private Twitter. 

[Wulaw Horn 19069]

11 minutes ago, We’reTexas said:

Comp won’t be an issue for senior management but I wonder if Twitter as a whole will be able to stay competitive from a talent perspective without a broad-based equity comp program. Talent competition is fierce right now and my friends there just say they’ll take their equity acceleration and peace out. I certainly wouldn’t go to a private Twitter. 

Talking to a buddy the other day who said Twitter was second string talent not good enough for Facebook or google. No idea how accurate this is but that was his contention living out there. 

[gsoda3 3254]

Comp won’t be an issue for senior management but I wonder if Twitter as a whole will be able to stay competitive from a talent perspective without a broad-based equity comp program. Talent competition is fierce right now and my friends there just say they’ll take their equity acceleration and peace out. I certainly wouldn’t go to a private Twitter. 

I think you're right. I think there will also be a mutual disassociation between the new regime and a good chunk of current employees. From what I hear Elon thinks the entire company is bloated and while he pays top money for good people he doesn't think that many people are needed.

I'm still not sure this is going to happen for real though. I personally thought this was just Elon flexing but some people who know better than I do are taking it more seriously then I thought.

[gsoda3 3254]

Talking to a buddy the other day who said Twitter was second string talent not good enough for Facebook or google. No idea how accurate this is but that was his contention living out there. 

Hah yeah that's definitely the perception. But I know a lot more Google and Facebook employees than I know Twitter employees.

[Napoleon 8669]

On 4/21/2022 at 11:20 PM, TKthunder2 said:

Plenty of things to criticize Elon about but saying someone on the spectrum that’s made billions leading other companies can’t run one because it’s social is an ignorant statement.

Zuckerberg has already shown that those on the spectrum can run social media companies. 

[52-80 19150]

7 hours ago, longhornmatt said:

 I think Amazon had a much more tangible and easier to envision path to massive growth than 

Which was? They made no margins slinging books and diapers. Scaling up volume only changed that incrementally. It wasn’t until the AWS cloud business that they printed profit — i didnt follow them back then, but i dont think that was a business expansion anybody saw coming

[Vegas64 673]

6 hours ago, Napoleon said:

Zuckerberg has already shown that those on the spectrum can run social media companies. 

To broadly make the blanket statement that someone on the spectrum can’t run a social media organization in the first place is pretty brazenly ableist.

[52-80 19150]

2 hours ago, longhornmatt said:

Slinging books was their business in 1997 when they were a penny stock.  AWS was already around by the time they had a trillion dollar valuation.  So was their dominant share of online retail in general.

When Tesla touched $1T they already had industry leading profit margins - which had been, and since then, sequentially increased. 

The year AWS launched, Amazon had consecutive annual losses. What would you have said about their valuation then? and their P/E?

[clapclapclap 9000]

On 4/22/2022 at 11:10 PM, Immaculate Vibes said:

 

 

 

[Immaculate Vibes 114]

 

[AeroHorn 749]

On 4/22/2022 at 9:25 AM, F250 said:

 

I see more whining about blind Elon defending than actual blind Elon defending. People have pointed out his achievements and have backed them up with numbers. I find his actual personality (makes Mack Brown thick-skinned in comparison) quite repugnant but his ventures and entrepreneurial drive are the top over the last 2 decades. 

On 4/23/2022 at 8:23 AM, Immaculate Vibes said:

Cult of Elon

So, this throwaway explains the reason for investing in Tesla? Do the startups Rivian and Lucid also have cult of Elon to explain their market caps? Look at the macro events. Every country big and small have said that they want 100% EV in the next 1-2 decades (top down push). There are no EVs on the lots despite being marked up (bottoms up demand). Mach-E, ID4, Ioniq 5, EV6, Bolt, Leaf, etc. are all from traditional big companies and are all facing battery challenges. Tesla is unquestionably the leader in trying to get battery eco system lined up for their auto and energy businesses by not just depending on deals with battery manufacturers but actually getting to make their own batteries, optimizing to their needs, and getting to the mining sources for raw materials.

Over the next 5 years, there are going to be serious issues about raw materials. As Rivian CEO put it, this problem will make the chip shortage look like a "small appetizer". One may reasonably say that Tesla is overvalued, but it has lived up to its "overvalued" price from 3 years back and may make current price reasonable over the next 3 years, or it may not. Every car maker has seen the writing on the wall and committed to make themselves into "Teslas" (100% EV). This is akin to Dell/HP/Lenovo committing to making their laptops like Macbooks. They have succeeded in making their laptops better but Macbooks still lead, now with custom silicon. Can Tesla keep its edge with its own "custom battery" or "custom Autopilot" or "custom supercharger"? Time will tell. 

 

[52-80 19150]

12 minutes ago, AeroHorn said:

So, this throwaway explains the reason for investing in Tesla? Do the startups Rivian and Lucid also have cult of Elon to explain their market caps? Look at the macro events.

And also look at where Rivian and Lucid are in their manufacturing/scaling cycle relative to their cap.
 

If theres an overvalue in the space, you should short LCID/RIVN and long Tesla.  If the entire EV macro thesis blows up, the short will float the long. If EV grows continue, its those 2 that needs to ‘justify’ their price. 
 

 

[AeroHorn 749]

Exactly. Rivian made couple of thousand vehicles and lost couple of billion last quarter, and their market cap is about half of Ford and GM. I have invested in Rivian and Lucid (and lost >50%) but still holding because I like their vehicles more than any other competing offerings such as Mercedes EQS against Lucid and F150/Cybertruck/Model X against Rivian truck/SUV.

 

[52-80 19150]

Interesting trove of messages from Elon vs the Saudis, in trying to cover his tracks from the premature “going private” announcement. 

He’s brash and imperious, but obv also shrewd. 
 

The other interesting piece is he chided to PIF that a standard buyout premium in industry is 20%.  When Twitters price jumped up due to Elons disclosure, it hovered around 45.  His offer for the company? 45*1.2=54. It was a pretty earnest bid. 

[Neonmoon 38129]

This is a crazy story. I don’t remember reading about it before. 

 

[Nice Guy Eddie 13510]

If Elon is financing the >$40B take over, what’s the annual nut that Twitter has to come up with?  What is Elon being charged? At 5%, Twitter has to produce $2B which it doesn’t do today.  In 2020 and 2021, it lost money. 

not to mention what happens IF Tesla runs into bad numbers and Elon has to sell some of his shares for the margin call?

elon has 2 revolutionary companies in spacex and Tesla, and he wants to screw around with Twitter? Why not buy an airline while you’re at it.

even if he somehow makes Twitter work, why?

[F250 28767]

1 hour ago, Neonmoon said:

This is a crazy story. I don’t remember reading about it before. 

 

 

 

 

[We’reTexas 1473]

1 hour ago, Nice Guy Eddie said:

If Elon is financing the >$40B take over, what’s the annual nut that Twitter has to come up with?  What is Elon being charged? At 5%, Twitter has to produce $2B which it doesn’t do today.  In 2020 and 2021, it lost money. 

not to mention what happens IF Tesla runs into bad numbers and Elon has to sell some of his shares for the margin call?

elon has 2 revolutionary companies in spacex and Tesla, and he wants to screw around with Twitter? Why not buy an airline while you’re at it.

even if he somehow makes Twitter work, why?

Elon would be personally on the hook for $1B annually for his margin loans. Half of the bank debt will ultimately need to be raised on the HY markets, but that’s looking like $1B too. And yes there’s obviously risk with the margin loan, but keep in mind the secured bank debt will have liens on Twitter shares as well. 
 

[Grade of D as in David 13253]

11 hours ago, clapclapclap said:

 

 

 

 

This guy is calling someone a boner killer?

[wildcat09 29349]

6 hours ago, Nice Guy Eddie said:

If Elon is financing the >$40B take over, what’s the annual nut that Twitter has to come up with?  What is Elon being charged? At 5%, Twitter has to produce $2B which it doesn’t do today.  In 2020 and 2021, it lost money. 

not to mention what happens IF Tesla runs into bad numbers and Elon has to sell some of his shares for the margin call?

elon has 2 revolutionary companies in spacex and Tesla, and he wants to screw around with Twitter? Why not buy an airline while you’re at it.

even if he somehow makes Twitter work, why?

This feels like he’s seeking revenge against twitter’s board for making him look stupid because he initially accepted the offer of a board seat. It’s a temper tantrum. 

[Blotto 23497]

2 hours ago, wildcat09 said:

This feels like he’s seeking revenge against twitter’s board for making him look stupid because he initially accepted the offer of a board seat. It’s a temper tantrum. 

I guess we should expect Musk to accuse them all of being pedophiles next.

[MonkeyDoughnut 10232]

On 4/23/2022 at 8:52 PM, We’reTexas said:

Comp won’t be an issue for senior management but I wonder if Twitter as a whole will be able to stay competitive from a talent perspective without a broad-based equity comp program. Talent competition is fierce right now and my friends there just say they’ll take their equity acceleration and peace out. I certainly wouldn’t go to a private Twitter. 

Serious question for your friend, what is the need for 7,500+ employees? What are they all working on?

[StruggleBus 3922]

7 hours ago, F250 said:

 

 

 

[Neonmoon 38129]

Looks like it’s might happen soon

 

[52-80 19150]

Shaggy experts told me it would never happen

[ChickenSandwich 9832]

Q1 earnings report due 4/27

 

Must look like shit.