When Musk merges something into another, it's an acknowledgement that it's about to crater. He bailed out a company he chaired that was owned by his cousins. I think it was called SolarCity, and he bailed it out by stuffing it into Tesla. He stuffed Twitter into XAI, which then got folded into SpaceX. His M&A strategy is simple. When one of his kids is failing, he makes another family adopt it. So, right now, Tesla is the patient, and SpaceX is the organ donor, or SpaceX shareholders are the organ donors.
Today's number, $750 billion. That's how much Meta, Amazon, Microsoft, and Alphabet are expected to vote to capital expenditures this year alone. That's more than the entire GDPs of Ireland or Belgium. Ed Sheeran, I decided to sell my homemade bagpipes made from colostomy bags on Amazon, but it sounded like [ __ ].
I'm doing very well. Very happy after that Signal win. We won in three categories.
Yes. Big news. And tell the fans, what did you win in? Or what did we win in, I should say. It's a team effort, you little primadonna diva [ __ ]. What did you win?
Prof G Markets won best money and finance podcast. So, thank you for casting your votes in that. Also, daily podcast. Thank you for that as well. And then, my newsletter won best newsletter. So, very excited about that. The only category in which our show did not win was best video podcast, but that's okay. We'll get him next time.
Congratulations to you, to Claire. Who else is on this joy bag of donuts cruise ship?
Dan, Mia, Kristen, video team, Allison.
Yeah, quite a few people here. Definitely see layoffs coming. Great effort. Great effort. We can be Lena. Great effort. AI, let's can AI do That's my favorite thing that I say to Katherine. I'm like, can AI do this?
Can AI do it? What else is going on? Anything else good?
Well, I saw the Nathan Fielder movie, which everyone's talking about. Have you seen it yet?
I just She freaks me out. It's like I don't want to go see a movie about the clown from It. She just wigs me out. I don't I find her frightening.
So, you're not going to see it? Or what's the plan here? Cuz you kind of have to see it.
I'm going to wait till it comes out on streaming. I mean, tell us about it. What's your official
It was great. I have a couple of criticisms, but it's not as fun if you haven't seen it. So, go see it, and then you and I will have sort of a breakdown of the movie. But, it was fascinating. And she is an extremely interesting person. And kind of a metaphor for our time, I would say. And he really got that out of her. So, you should see it.
Why is she a metaphor I'll ask. Why is she a metaphor for our time?
Well, because she's kind of the quintessential tech founder slash grifter who kind of got away with convincing huge amounts of people with a lot of money that what she was doing was legit. And then you see in the conversations that she truly is lying. Or at least that is my take. It's sort of up for debate at the end of the movie. But again, you know, you got to go see it. And then you and I can have the conversation.
I think me getting hair plugs in Turkey and buying a Porsche are sort of a metaphor for the age.
I think that marks the age.
plenty of things that mark our time. Are you going to see the Zuckerberg movie? So, we got this we got Zuckerberg movie, Elon Musk movie, which Kara is in, and then we have Sam Altman movie coming out in December. So, we got four big tech founder movies.
I'll see the Sorkin one cuz I just like him and I really enjoyed the first one. And I want to see what happens in part two. Although I'm traumatized from seeing Sex and the City 2. I don't think I can ever see a sequel again. God, it was so bad. And I'm a Sex and the City girl at I don't know if you know that about me.
I can't see the Musk one. It's 4 hours. I just can't do that.
Did you see How to Rob a Bank?
Really? What is I'm not I'm not aware of this.
I'm playing me. Although they called me back and said, "We'd like to get a Signal award-winning podcaster to do the next one." Yeah, it's with Pete Davidson.
What is How to Rob a Bank?
It's a movie about a bunch of kids who it kind of touches on income inequality and a lack of opportunity for young men and these young men start robbing banks. They're actually a young crew start robbing banks and they start posting videos on how to rob banks on YouTube. It's actually pretty good film.
Is it out? I should know that, shouldn't I? The only movie I'm going to go see in the theaters is the new Ali G movie. I'm going to go see that. I'm going to take my boys to that. We're excited about that.
Okay, well we have a lot to get into. And by the way, if you like this show, please be sure to hit follow wherever you're listening or subscribe to us on YouTube and also hit the bell icon which gets notifications for all of our latest episodes. We appreciate it. It means a lot. Thank you very much. And with that, let's get into our show. Last week, Elon Musk's two biggest companies delivered very different results. Tesla's revenue was flat year-over-year while its automotive business continued to struggle. Both auto revenue and deliveries fell compared with a year earlier. SpaceX, meanwhile, had a very strong quarter. Revenue surged 161% year-over-year. Profits beat expectations and capital expenditures came in slightly below what investors had anticipated. But the biggest story wasn't in either company's earnings. Musk officially confirmed that special committees at Tesla and SpaceX are evaluating a potential merger between the two companies. And investors are increasingly betting that a deal will happen. On Kalshi, the odds of a Tesla-SpaceX merger before 2028 have climbed to 81%. So, Scott, we can talk about the earnings, but to be honest, the merger seems more relevant and more important here. Elon has confirmed that both boards have formed these special committees to study potentially pursuing this merger. Elon said last week, quote, "I do think there's a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there is a lot to be gained from cooperating." And as I mentioned, the odds that this happens before 2028, at least according to prediction markets traders, is 81%. So, this seems very, very likely that this is going to happen. SpaceX is a $2 trillion company. Tesla is a $1.5 trillion company. Combined, I guess it'll be a $3.5 trillion company. What do you make of this?
Well, I think actually Kalshi has this wrong. I think there's an 80% chance it'll get approved by the board. I mean, the board is sort of a, you know, the board is doing a lot of work here. And that is when you're talking about decisions involving SpaceX and Tesla, the bride, the groom, and the officiant are the same person. And that is this is just a formality, so he can check an SEC box. Having said that, I think a real existential risk and we'll circle back to this to Elon Musk, SpaceX, and Tesla is, I think, on November the 4th, if Democrats take the House and the Senate, I just can't imagine the number of subpoenas and calls to testify before Congress that Musk is going to receive. I think that there is bipartisan anger around him throttling back Starlink in Ukraine and potentially, you know, neutering at the worst possible time the defense of the West. But anyways, so his board will approve it. And I think most likely it does go through, but let's talk about kind of the winners and losers here. The way I would describe it is they're both rocket ships, but SpaceX is busting into outer orbit and Tesla there's feels like there's a decent chance one of the O-rings is about to come off. SpaceX revenue is up 161% with net income of 4.4 billion and a 60% EBITDA margin. Tesla's revenue was flat and operating income is down 56% with a 2.6% margin and deliveries are down 2%. So, what you have is a company you have an automobile company, you pointed this out yesterday, that's trading at a P of 300 versus an industry at 18. And this is effectively what's going on here. Musk has this he's a genius on several levels, but something he really understands is So, back to Sex and the City. Carrie is dating Mikhail Baryshnikov. I don't forget the character's name. And she meets with and he's constantly kind of putting her off and never has time for and he's like, "As soon as my art show is over, we'll do this." And he meets with Mikhail Baryshnikov's former lover and says, "Why did you break up?" And she said, "I got sick of as soon as." And she kept saying, "As soon as this happens, this will happen." Musk is literally the genius of as soon as. Okay, I have a better EV, it's going to change the world. Wow. All right, no, other people are coming to the EV market, it's a shitty low-margin company. Wait, we're going to have autonomous. As soon as we have autonomous, I'll be able to justify this valuation. Okay, you're making progress in autonomous. Waymo's doing a half a million rides a week, you're doing very few with a safety monitor in the front seat. Okay, as soon as we produce 5 million robots. Everyone is running out of patience with this boyfriend called Tesla. So, he is going to merge it into a company that this valuation, which I would argue is irrational, really has an incredible story. So, he's taking shareholders who are getting 2.9 million of market cap per car, and I think that is really tenuous, and he's putting it into a company that has, quite frankly, a more enduring sexier story. Now, to be fair, there are some real synergies here. SpaceX has purchased more than 1 billion of Tesla batteries and more than 100 million of Cybertrucks, although I would argue that's a related party transaction. Tesla knows how to manufacture at scale, and SpaceX has compute that self-driving needs. It's a real merger with a fake promise. When Musk merges something into another, it's an acknowledgement that it's about to crater. When he bailed out a company he chaired that was owned by his cousins, I think it was called SolarCity, and he bailed it out by stuffing it into Tesla. He stuffed Twitter into XAI, which then got folded into SpaceX. His M&A strategy is simple. When one of his kids is failing, he makes another family adopt it. So, right now, Tesla is the patient and SpaceX is the organ donor or SpaceX shareholders are the organ donor. So, who wins? Tesla shareholders. They get to trade a declining shares in a declining car company for a stake in Starlink and AI. That's like trading, you know, your Buick for a piece of a Gulfstream. And he wins because he's going to get to maintain control. Largest merger ever, bigger than the GDP of France. But again, I think this is more he keeps pulling more and more rabbits out of the hat and he needs a new one for Tesla and that new rabbit is SpaceX. Your thoughts?
I think that's exactly right. I mean, you look at Tesla stock, it's down 13% in the past year. People love to say Tesla's been like such a great investment, but over the past five or six years it actually hasn't. When you just look at the five-year time frame, it's actually underperformed the S&P by about three times. So, this is a stock that has been lagging in recent years and it's because the business is actually in decline. It's because revenue has fallen. It just fell again last quarter. The car deliveries just fell as well. The story that people are excited about is the robo-taxi, but as we also know, the robo-taxi is like millions of miles behind Waymo, which is the winner and the front-runner in this race and it's not even close. So, the story for Tesla is certainly coming under a lot of pressure and I think you're exactly right. The adoption analogy is perfect. It's like I kind of think of it as sort of brand laundering or maybe even multiple laundering where you have SpaceX, which currently has a sexy story about satellites in space or excuse me, data centers in space, orbital data centers. They already have the satellites in space. The next story is the orbital data centers. The story after that is the asteroid mining. The story after that is creating colonies on Mars. So, he's creating all of these stories, and currently, investors are kind of lapping it up. Because you've got I mean Tesla, we already believe you and I agree that we think that Tesla is way overvalued, trading at, you know, more than 300 times earnings, and the average across the auto industry is 17. Now, we can't do that with SpaceX because they don't have earnings, but we can look at the price-to-sales multiple. Tesla's trading 14 times sales, SpaceX is trading at 87 times sales. So, he's kind of doing the same thing again. Okay, let's put them all in the same bucket together and maybe people will stop asking questions about why are car deliveries declining? Why are your sales declining on a quarter-over-quarter basis? Why is this happening? Maybe they'll stop asking those questions. And they'll say, "Oh, well, that doesn't matter because the main thing, the main prize is the asteroids or it's the AI or it's renting out the data centers." And to be honest, like, it's not a terrible argument to make. It just means that you're kind of, as you often say, smearing the Vaseline over the lens so that we don't actually have to dig into the reality. And as you point out, he's done this plenty of times before. He did it with SolarCity, he did it with Twitter, he did it with xAI. I mean, you remember we used to actually see all of the financial details of Twitter. We saw how much user growth was increasing or decreasing. Like, we had all of those details. Then suddenly it's bought up by xAI and suddenly we don't really get that level of detail. Like, you know, technically that company is part of SpaceX and we don't really get to see what the revenues actually look like, what the financials look like because it doesn't really matter anymore to the story of the business. So, it does seem like that is pretty much the game plan here. We're going to distract away from the fact that Tesla is seemingly in structural decline, at least when you look at its core business. Who knows what happens with the robotaxi, but SpaceX is the sexy hot new AI company.
Look, a brand, if you will, is one part promise, one part performance. And Elon Musk has become the master, the Jedi Knight, the sensei of promise. And the moment the performance begins to catch up to the promise, he shoves it in another vehicle with more promise. And also, there's a lesson to be learned here. And I say this admiringly, even at a small business. So, this has been great for Tesla shareholders because it creates cheap capital such that he can pull the future forward. I mean, that ridiculous circus act of a flying car with 5 seconds of thrust that takes 5 hours to fuel on an empty shell of a car, I mean, that's just not going to happen. And it's Look over here.
Does that make you bullish when you see that? Like, I see that and I know that the idea is that Oh, look, the car is flying. Look at our engineers. Look how talented they are. But I look at that, I'm like, why are you doing that? Like, why are you spending money on that?
No, he's running out of rabbits. And he did it Notice how he did it 2 days before the earnings call where they announced that this company trading at 300 times earnings is in structural decline, is flat to down. Anyways, but there is a lesson here, and that is as a leader of a company, you always want to be painting a promise that's something to reach for, cuz it not only gets "quote-unquote" the markets excited and we don't have shareholders, other than the employees, but you want to give the employees something to think, "Okay, we have a vision here." We're moving towards something bigger that will make the company worth more and is exciting to work on. I think you always want to be I love I think it was Al Pacino said, What is God if not grasping beyond your reach? You always as a leader want to be a little bit I don't want to call it not godlike, but give people something say, "Okay, this is what we're going to reach for next year." He has done that like no one in history. And he also has a great sense for okay, when do people start figuring out that I'm full of [ __ ] and that there likely won't be I won't be producing 5 million robots a year and then my autonomous is just not living up to expectations. I know, shove it into the rocket thing cuz that's going very well. But there you do a little bit and I'm sure the movie you referenced has some of this. There's a pretty thin line between being a visionary and committing outright fraud. And that is if you can paint an extraordinary enough a vision and you are credible and to be fair he keeps delivering for shareholders. Shareholders want him to continue to do this. I'm a Tesla shareholder. Oh god, this does feel kind of scary. Oh wait, I'm going to own SpaceX. Great. And then he can stare down the SpaceX shareholders who I believe are on the wrong side of this deal and say, [ __ ] I have always delivered and I will continue to deliver and this is a reason why we're doing this. It's going to add a lot of top line revenue. It's going to add a lot of manufacturing scale. But the idea of a brand being promised versus performance he exudes. No one has ever had a greater ratio of promise to performance even distinctive as incredible accomplishments than Elon Musk. So, I totally agree. I do think though that this isn't necessarily good for Tesla shareholders.
I think that's right.
I think we should just discuss like how this merger would actually work. Like how would these two things come together? What would probably happen is that SpaceX would acquire Tesla and they would offer Tesla investors SpaceX stock and then Tesla shareholders will convert their existing Tesla shares into SpaceX shares. The price will be determined by the boards. It's expected RBC predicts that Tesla shareholders will get a 20 to 30% premium. So, you might think, "Oh, that's good. Like, you get paid more than it's currently trading at right now. You're going to get rich." But, you also have to remember that the currency is going to be the SpaceX shares. And the price of those shares is based on whatever the current market value of SpaceX is. So, you know, your shares will convert, and you'll look like you're 20% richer. Like, "Oh my god, that's great." But, then if SpaceX stock falls by 20% the next day, then you're not actually getting a premium. And my view is that that could very very easily happen. And the reason I think that is because I think the SpaceX valuation is basically [ __ ]. And the reason it's [ __ ] is because the float is still incredibly small. It's still around 15 to 20%. And you look at a company like Nvidia or Microsoft, these actual multi-trillion-dollar companies, they have floats of almost 100%. All of their shares are trading. And so, the SpaceX shares right now are not experiencing genuine price discovery because only a fraction of them are actually being publicly traded. And the smaller the float, the more you can manipulate the price with extremely large shareholders. And we have every reason to believe that that is happening, especially for this company which is saying it's going to raise hundreds of billions more dollars in the future. Which is why I believe all of the investment banks are pumping up the price in their investment research, such that they have a better chance of underwriting these debt and equity offerings that are going to come down the pipeline, which is exactly how the investment banks make money. And you know, I get that that right there is kind of a conspiracy theory, but I do believe it's true, especially considering what we saw last year where the SEC eliminated the one law that was designed to prevent this conflict of interest from happening. So now I see this happening, they got rid of the law. It's like, yeah, I think that these price targets from these banks are total [ __ ]. I think it's ridiculous that Raymond James is saying that SpaceX is worth $10 trillion today. So I believe that the price is being extremely inflated right now. I think it's being manipulated and Elon is deciding, okay, now that my SpaceX shares are worth saying that this company is worth $2 trillion even though that is a [ __ ] number in my personal view, I'm going to use that as currency to go out and buy Tesla. And the ultimate reason why I think that he is doing this. One is the multiple on the brand laundering. But I think the biggest reason is that this is going to consolidate massive amounts of power. And that is that SpaceX has a dual class shareholder structure. Elon has 80% of the votes. Tesla does not. He only has around 20%. And this is why he's had problems when there've been shareholder lawsuits and he's tried to reincorporate the company in Texas and he was able to kind of get around some of those things and bend the company to his will. But ultimately, he only has 20% of the votes. But by converting Tesla stock into SpaceX and they're going to use the non-voting SpaceX shares as currency here, that is my prediction. He is going to eliminate essentially all of the shareholder protections that have gotten in the way of him doing whatever he wants at Tesla. So it's going to basically mean that he has 80% control over this entire merged corporation, whereas before he only had 20% of Tesla. So this essentially just gives him more power. It consolidates more of the influence into his hands. I think that that is his ultimate goal and he said this before. He says he doesn't like being a public company because it means he has to deal with shareholders and shareholder lawsuits. That's why he moved from Delaware to Texas. This is like his whole thing. So, ultimately, what it means for Tesla shareholders, I think, is you're giving up your voting rights once you do this. And I think that's definitely going to happen. And then also, you're buying into a company whose $2 trillion valuation is extremely precarious right now. And based on what I believe is a lot of financial manipulation.
We'll be right back after the break. And if you're enjoying the show so far, send it to a friend, and please follow us on YouTube, Spotify, or wherever you get your podcasts.
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We're back with Prof G Markets.
The governance gymnastics or the shareholder dynamics or the physics says that he gets control of both companies. I mean, that's a free gift with purchase here and not the reason he's trying to do this. I think the reason he's doing this is he wants to stay close to being a trillionaire and he realizes that Tesla is on its eighth of nine lives in terms of trading at 300 times earnings. It's just, you know, the Roadster originally promised, announced in 2017, delayed four times. I mean, they're just kind of out of magic tricks here. They're out of distractions. And what he'll be able to do here and it I mean, okay, it's like in the world of [ __ ] pick your fighter, Bernie Madoff or Elizabeth Holmes in terms of valuation here. I get why you would say, and we've said this, that SpaceX is dramatically overvalued. But SpaceX still has the promise of it. Tesla has no moats. BYD is making a better Tesla for half the price. The entire rest of the world has 8% of the launch payload capacity right now. There I can tell you personally, there is nothing like Starlink. Nothing. I think there will be eventually, but there's nothing like it. XAI, the AI portion of SpaceX, is up 9X. Now, granted, it's off a small base, but that story has legs. The Tesla story is running out of steam. It's like I feel like it's one of those TikToks you see of the guy in the 26 mile who collapses and this great guy who would have won the silver medal picks him up and we're all like oh well done. Yeah, this they're in a triathlon and Tesla's out of steam here because and when you talk about governance oh he'll get control. For God's sake he committed securities fraud at Tesla. And the board didn't even like kick him up to chairman for a week and then make him CEO.
a trillion dollars off today.
Yeah, so the notion that Musk isn't in charge of Tesla is I mean maybe it makes it harder for shareholder lawsuits but be clear. I mean there can only be one and he sits on the iron throne. The board members aren't even allowed to I don't even know who's on the board. They're not even allowed to talk.
Yeah, so basically he puts them on the board and says, [ __ ] I'm going to make you rich. And occasionally you can, you know, you're going to come to product demos and you're going to make a bunch of money. But be clear: you're not a fiduciary for shareholders; you're a fiduciary for Elon Musk. Anyways, the governance is not the motivation here it's a freak he's like while we're at it let's make sure I'm in control of both companies legally and not just practically.
But it's something that Tesla shareholders technically lose, and I think this is my view is like, I can see how Tesla shareholders might feel that they're getting a good deal, but I think we should be real about all of the ways in which they're also getting screwed and all of the ways in which the bag that they're going to be holding is equally premised on BS narratives about the future. Like the gift that he's giving them is that current BS narrative about humanoid robots that one is running out of steam and people aren't buying it anymore. And so he's doing this grand kind gesture of okay, here's another narrative which is also BS but it's just newer and so it's more exciting and also I think it's financially manipulated because the float is so small so it's easier to pull off this circus act. But to me, it's like, okay I can see how that might be good for shareholders in the short term, but ultimately I think you're running into the same problem, which is like, this is still a bunch of [ __ ] like this is still a bunch of, you know, as you said, pulling rabbits out of the hat that, you know, God bless Elon Musk for finding another rabbit. I'm just going to propose my final little conspiracy here. I was thinking about this like okay we're all Tesla shareholders because we all own the S&P. So I own Tesla whether I like it or not. What's going to happen to my Tesla shares when they get acquired by SpaceX? I mean for one I'm immediately those shares I mean the S&P we'll see what the S&P will do about it. Sometimes, what the S&P does is they remove it from the index. But I think this is worth really digging into, because my new conspiracy theory is that I think that this might be his way of forcing SpaceX into the S&P, which currently it cannot join because the S&P has these strict rules on profitability, on the float requirements, on how long you've been trading publicly all of these things which make SpaceX not eligible for index inclusion, and it won't be for quite some time. Of course they got included in the NASDAQ because they cut a deal with the NASDAQ and they decided to change the rules but everyone breathed a sigh of relief when the S&P came out and said we're not going to include SpaceX. But I just want to read to you one of the exceptions to the rules, and this is I'm quoting from the S&P's bylaws: quote "non-S&P composite companies that acquire S&P composite index constituents, but do not fully meet all of the eligibility criteria, may still be added to the S&P index at the discretion of the committee if the merger consideration includes the acquiring company issuing stock to target company shareholders," which is exactly what's going to happen, "and the committee determines that the addition could mitigate turnover and enhance the representativeness of the index as a market benchmark." In other words, there is an exception to the rule. Which is, you might not be profitable, you might have an artificially low float, you might not have been trading for very long; but if you are large enough to go in and acquire another company that is systemic to the S&P, which Tesla is, then the S&P committee has the right to say, "Okay, that's good enough, and we're going to include you." So, I could see this turning into the grand circus act of Elon's going to acquire this company, and that way SpaceX is included in the index, and then none of us have a choice. We all own SpaceX, which puts enormous amounts of buying pressure on the stock, which artificially inflates the price even more. I know I'm being conspiratorial, and I'm open to that not being the case, but honestly, given Elon's track record, I genuinely think that that is going to happen here.
Well, JP Morgan said that a stock-for-stock merger could give the S&P committee grounds to make exceptions to some eligibility rules, right? Cuz you noted that you're supposed to trade for 12 months.
And other laws, other restrictions, which they don't meet.
And other restrictions, you have to have a float, etc. And JP Morgan also estimated that an inclusion would create a passive buying equal to about 10% of the combined company's free float, which is real. Now, what you said that I don't, and I don't know the mechanics of this but I think this is going to be a merger, not an acquisition, in the sense that the special committee's... So, you form a special committee, and the special committee is supposed to do real work with the investment bank to say, "Does this make sense?" Can we justify it? What happens if this goes wrong? Is the CEO just building an empire? CEOs have a tendency to want to do acquisitions. Why? Because their compensation is driven by a compensation committee on the board that hires Towers Perrin cuz we don't like to do actual real work. And Towers Perrin, who we pay $200,000, comes in and says, "Okay, Janet Robinson is the CEO of a $5 billion media company. And on average, the CEO of a $5 billion media company makes 8 million a year." And then what happens is we go, "Well, Janet's a good person and she's working hard. We don't want to pay her 50%, we'll pay her 60%," which doesn't sound like a lot. But when you're paying 20% above the mean every year, what that means is every three or four years, CEO compensation is doubling and is the reason why in the last 40 years, CEO compensation has gone from 30 times the worker type to like 600.
Yeah. Well, it's just been totally out of control. So, my point is there's an incentive to make acquisitions even when they don't make any sense. And every CEO is hoping for a transformative acquisition like what Zuckerberg did with Instagram. The reality is about seven in 10 acquisitions end up destroying shareholder value. Now, if I'm on the special committee representing SpaceX shareholders, I'm like, "Okay, they're making an argument around scale. The company has manufacturing, supply chain expertise. It's going to give us a lot of top-line revenue." All right, but Jesus Christ, 300 times earnings? And wait, you want me to pay a premium? [ __ ] you. Yeah, I mean, no. I think the special committee at Tesla is going to have a lot more eye rolling at current valuations. They're going to say, "Our total addressable market is the universe, is the galaxy." And you know, go on to list all the things I'm talking about. And we're paying 300 times for a company whose revenue growth is flat. So, and you want us to pay a premium cuz supposedly we're on top here and we're the acquirer.
You're saying, "Sorry, the SpaceX board is going to roll their eyes." Excuse me, the SpaceX board
I think if any special committee
Of which, by the way, he has 80% of the voting power.
So, assuming these guys want to write a report such that they're at least defensible in court, you know, and assuming these people actually do their job and are counseled by anybody, they're going to go
Why do you think that? They don't I mean, we saw what they said in court. They don't have a spine. Right? I mean, that was Tesla that we saw.
Okay, stock price the day after it starts trading as a combined company. Right? It's SpaceX is Okay, SpaceX, you not only overpaid, you grossly overpaid. Right? So, I just don't I think they're probably going to end up in just a like-for-like. Like, what is the share price on the day of closing and we do a like-for-like exchange. I don't see why SpaceX would pay a In part of what you do on a special committee is you do benchmarking. You say, "Okay, first benchmark is what would someone else pay for Tesla?" And the answer is they'd pay 30 cents on the dollar. There is no one out there that would even pay the current price, much less a premium. Who on Earth Who Apple? Would Apple pay Apple for a premium What is Tesla at 1.4 trillion or something? What would Apple is literally like He'd probably the only viable competitor or viable acquirer from Tesla. Tesla has a 1.5 trillion. They would have to pay $2 trillion. They're going to take a 30 or 40% dilution to buy Tesla. No, they would never do that. So, the special committee, if they do anything, and not only that, the special committee owns shares of SpaceX. So, they do have a vested interest. My point is I don't think there's any way Tesla is going to be able to argue on any level and also not create a fairly significant ugly hangover the first day this starts trading as a post as a wind up. Now, having said all of this, Ed, I think this all may be moot. I think the wolves are coming for this guy. And when I say this guy, I don't mean these companies, I mean this guy. I think there are so many elected representatives who will be hitting subcommittees on commerce, defense, intelligence, they're going to go, let me get this. This guy was throttling back Starlink? As inbound projectiles from Russia came in? [ __ ] you have some splaining to do. Oh, and by the way, you want us to approve or not have CFIUS reviews up your ass and all sorts of anti-trust up your ass?
And just to clarify for listeners, what you're referring to is what we heard last week, which is that in Ukraine, their drones, which rely on Starlink and Starshield, which are SpaceX products, their drones started falling out of the sky because Starlink just was turned off randomly. And reports say that it was Elon who did this. That is what the Wall Street Journal has been reporting on, but Elon's saying, oh no, I don't make these decisions. This is a decision by the government. And then Trump came out and said, I wasn't responsible for this. So, everyone's kind of pointing fingers as to who was responsible for this decision, but it's clear I mean, at least to me, I mean,
Read between the lines however you'd like. Seems to me like Elon, who has expressed that he doesn't want to be seen as someone who's providing protection for Ukraine in a war, who I believe has criticized Zelenskyy publicly.
Zelenskyy has gone too far. That was his tweet from 2 weeks ago.
Right. So, the idea that it wasn't Elon Musk who turned those things off seems to be a little bit ridiculous, especially given his track record of lying. So, I think you're pointing out, like, you know, that's worth an investigation. Is Elon Musk controlling the trajectory of geopolitical warfare, a war in which we're supposed to be defending our ally in Ukraine? Is he controlling that trajectory and then denying it? In which case, does that warrant review? Does that warrant congressional testimony? Probably. Probably warrants a federal investigation.
These guys are going to ask this guy to put his elbows on the table and cough for the next 4 years. They are going to probe him like... he's going to wish he could go for a 5-year colonoscopy versus what's about to happen to him because...
Can I just clarify that? Like, because you're saying that, you know, Democrats are going to investigate him, he's going to be having his arms on the table coughing.
I know that. Car elbows, apologize.
Checked. It's never too early to start, Ed. It's never too early to start.
Elbows. So, because I saw that Kara Swisher said something similar on The Bulwark where she was like, yeah, this guy might go to prison. And I know that she's getting a lot of flak and a lot of...
Let's be clear. She said that he'll be investigated.
He'll be investigated. Okay. Well, she's getting criticized for suggesting that we use political power and when the Democrats take over, we just investigate people and send them to prison. And that's how... And Elon has responded to her and he said like, 'Okay, game on,' essentially. And it's flaring up into kind of like a pretty intense and nasty political debate. The criticism of her was, 'What are you investigating him for? What is the problem? Or are you just saying, I don't like Elon Musk, let's investigate him and let's send him to prison?' I know that's not what she's saying, but for you here, what do you think that he is going to be investigated for that will warrant bringing him in for congressional testimony? I think that the Ukraine thing is certainly something. That seems pretty bad. But is there anything else that you're referring to?
