Well, Elon Musk gives now the richest person on the planet. More than half the satellites in space are owned and controlled by one man starting his own artificial intelligence company. Well, he's a legitimate super genius.

Well, Elon Musk gives now the richest person on the planet. More than half the satellites in space are owned and controlled by one man starting his own artificial intelligence company. Well, he's a legitimate super genius.

I mean legitimate. He says.

I mean legitimate. He says.

He's always voted for Democrats, but this year it will be different.

He's always voted for Democrats, but this year it will be different.

He'll vote Republican.

He'll vote Republican.

There is a reason the US government is so reliant on him.

There is a reason the US government is so reliant on him.

Elon Musk is a scam artist and he's done nothing. Anything he does is fascinating people.

Elon Musk is a scam artist and he's done nothing. Anything he does is fascinating people.

Welcome to Elon Inc. Where we talk about Elon Musk's vast corporate empire, his latest gambits and antics, and try to make sense of it all. I'm your host, Max Chapkin in for David Poppadopolis. Today we're talking about Tesla. The company's fourth quarter sales numbers came out earlier this morning, and Elon Musk's car company reported that had delivered nearly four hundred and eighty five thousand vehicles between October and December. That's basically what Wall Street expected. Meanwhile, something that did not meet expectations, Fidelity once again said that x Elon Musk's social media company was worthless, not worthless, but worth less than it was when Elon bought it. X lost nearly eleven percent of its value in November, which sounds bad until you realize that was the same month he told Bob Eiger, the CEO of one of the world's most beloved companies, to go fuck himself, to discuss this and to look at what's ahead in the new year. We've got our panel here, Sarah Fryar, who leads our big tech team here at Bloomberg News. Hello Sarah, Happy New.

Welcome to Elon Inc. Where we talk about Elon Musk's vast corporate empire, his latest gambits and antics, and try to make sense of it all. I'm your host, Max Chapkin in for David Poppadopolis. Today we're talking about Tesla. The company's fourth quarter sales numbers came out earlier this morning, and Elon Musk's car company reported that had delivered nearly four hundred and eighty five thousand vehicles between October and December. That's basically what Wall Street expected. Meanwhile, something that did not meet expectations, Fidelity once again said that x Elon Musk's social media company was worthless, not worthless, but worth less than it was when Elon bought it. X lost nearly eleven percent of its value in November, which sounds bad until you realize that was the same month he told Bob Eiger, the CEO of one of the world's most beloved companies, to go fuck himself, to discuss this and to look at what's ahead in the new year. We've got our panel here, Sarah Fryar, who leads our big tech team here at Bloomberg News. Hello Sarah, Happy New.

Year, Happy New Year.

Year, Happy New Year.

And Dana Hull, the world's most diligent Tesla reporter. Happy New Year to you, Dana, twenty twenty four, LFG Okay. So Elon Musk has over the last few years, I think, Dana correct me if I'm wrong, bragged that he's spent the new year delivering cars that he's been, you know, in the factory, you know, trying to put the last bow on in another year for Tesla. Do we have any sense of whether that's what he did over this holiday?

And Dana Hull, the world's most diligent Tesla reporter. Happy New Year to you, Dana, twenty twenty four, LFG Okay. So Elon Musk has over the last few years, I think, Dana correct me if I'm wrong, bragged that he's spent the new year delivering cars that he's been, you know, in the factory, you know, trying to put the last bow on in another year for Tesla. Do we have any sense of whether that's what he did over this holiday?

So it's not that I'm on the phone with Elon, but my sense is that he spent part of the holidays in Puerto Rico or at least his his jet was in Puerto Rico, And yeah, I did not get the sense that he was in Fremont or in Austin, like helping out the delivery guys, which you know he has done in years past. But yeah, no, I mean I think I think he was out of town.

So it's not that I'm on the phone with Elon, but my sense is that he spent part of the holidays in Puerto Rico or at least his his jet was in Puerto Rico, And yeah, I did not get the sense that he was in Fremont or in Austin, like helping out the delivery guys, which you know he has done in years past. But yeah, no, I mean I think I think he was out of town.

What do you make of the numbers? So four hundred and eighty five thousand vehicles for the last three months of twenty twenty three, one point eight million cars for the year. I mean, it sounds it sounds like a lot. I mean in historic terms. On the other hand, you know, not as high as some other companies.

What do you make of the numbers? So four hundred and eighty five thousand vehicles for the last three months of twenty twenty three, one point eight million cars for the year. I mean, it sounds it sounds like a lot. I mean in historic terms. On the other hand, you know, not as high as some other companies.

Yeah, So the big news out of the numbers for me was they didn't break out how many cyber trucks they delivered, which is pretty funny given that this is their brand new vehicle. So they delivered, you know, four hundred, five hundred and seven vehicles. They broke out the three and the Y, and then they had other models which includes the S, the X, and the cyber trucks. So we have no idea how many cyber trucks have actually been handed over to customers, and it just is weird that they didn't break that out.

Yeah, So the big news out of the numbers for me was they didn't break out how many cyber trucks they delivered, which is pretty funny given that this is their brand new vehicle. So they delivered, you know, four hundred, five hundred and seven vehicles. They broke out the three and the Y, and then they had other models which includes the S, the X, and the cyber trucks. So we have no idea how many cyber trucks have actually been handed over to customers, and it just is weird that they didn't break that out.

So it has to be intentional, right.

So it has to be intentional, right.

Right, it's a lousy number, so they didn't broadcast it. If it was a positive number, they would have absolutely said, oh, we you know, we did a thousand or something like that. So they're basically obfuscating how many cyber trucks they've actually made.

Right, it's a lousy number, so they didn't broadcast it. If it was a positive number, they would have absolutely said, oh, we you know, we did a thousand or something like that. So they're basically obfuscating how many cyber trucks they've actually made.

And then the big thing.

And then the big thing.

Is that they've lost their like EV crown to BYD, which is the Warren Buffett backed Chinese company that also makes evs, And you know, Musk has said over and over again that their biggest competition is in China. But this is the first quarter that we've actually seen BYD kind of like come ahead now in terms of full EV deliveries ahead of Tesla. But the stock reaction today is kind of mixed. I think it's like the delivery numbers were in line with what Wall Street was expecting, but nothing earth shattering.

Is that they've lost their like EV crown to BYD, which is the Warren Buffett backed Chinese company that also makes evs, And you know, Musk has said over and over again that their biggest competition is in China. But this is the first quarter that we've actually seen BYD kind of like come ahead now in terms of full EV deliveries ahead of Tesla. But the stock reaction today is kind of mixed. I think it's like the delivery numbers were in line with what Wall Street was expecting, but nothing earth shattering.

So, Sarah, I mean you sort of hinted at this. On December twenty ninth, Musk wrote, I stand by my prediction that if Tesla executes extremely well over the next five years, that the long term value could exceed Apple and a Ramco combine. That I mean is that the spin that we're going to see like this is just you know what, strength on strength. He's just gonna play this as a as a huge victory.

So, Sarah, I mean you sort of hinted at this. On December twenty ninth, Musk wrote, I stand by my prediction that if Tesla executes extremely well over the next five years, that the long term value could exceed Apple and a Ramco combine. That I mean is that the spin that we're going to see like this is just you know what, strength on strength. He's just gonna play this as a as a huge victory.

I mean, I think that the game of talking about these things is to surprise and delight, right, So you want to start with like, you know, this grand vision, and I think that's the thing that Musk always excels at. He makes people believe that the future is going to be like way crazier and unimaginably amazing compared to today. And then you know, the details are kind of like they should probably exceed expectations, but in the case of Tesla, they haven't always except for you know, when it comes to the actual uptake of evs or EV's, I think for Tesla have a little bit of a better chance because the charging network for everyone else is kind of crumbling, So you know, that's one way you might bet on them. But I think when it comes to talking about the numbers, the best case scenario is to just say the future is going to be so much better than you can even imagine and not focus on what's right now.

I mean, I think that the game of talking about these things is to surprise and delight, right, So you want to start with like, you know, this grand vision, and I think that's the thing that Musk always excels at. He makes people believe that the future is going to be like way crazier and unimaginably amazing compared to today. And then you know, the details are kind of like they should probably exceed expectations, but in the case of Tesla, they haven't always except for you know, when it comes to the actual uptake of evs or EV's, I think for Tesla have a little bit of a better chance because the charging network for everyone else is kind of crumbling, So you know, that's one way you might bet on them. But I think when it comes to talking about the numbers, the best case scenario is to just say the future is going to be so much better than you can even imagine and not focus on what's right now.

And I guess that's what he's saying. Dan, you brought up byd refresh our memories, Like what is BYD and to what extent is it fair to compare them to Tesla? How similar or different are they from Tesla?

And I guess that's what he's saying. Dan, you brought up byd refresh our memories, Like what is BYD and to what extent is it fair to compare them to Tesla? How similar or different are they from Tesla?

I mean it's a Chinese electric car company and a battery company. And I think that like what most people are realizing is that when you look at the EV market, there's kind of two clear leaders BYD and Tesla, which are vertically integrated companies that make the cars, basically make the batteries, know a lot about like powertrain and engineering and battery sale development. And then there's like everybody else, which is the legacy OEMs that are trying to pivot to evs but don't have that kind of in house expertise. And so, like one of the big narratives in twenty twenty three was like slowing EV growth that like the EV market is still growing, but it's like slower than usual, and you saw like Ford and GM and all these other players kind of like pull back on their expectations. But like BYD and and Tesla are totally leading the world in volume, and Tesla deliveries year over year it was thirty eight percent growth. I mean that's that's still like significant growth. I mean, Tesla's growth is not like the runaway fifty percent growth that they have had some years, but it's still it's still growing. And yeah, I mean I think BYD does not really sell cars in the United States. So that's why, like a lot of people like are like what the hell is BYD because you don't see like a BYD car on the freeway.

I mean it's a Chinese electric car company and a battery company. And I think that like what most people are realizing is that when you look at the EV market, there's kind of two clear leaders BYD and Tesla, which are vertically integrated companies that make the cars, basically make the batteries, know a lot about like powertrain and engineering and battery sale development. And then there's like everybody else, which is the legacy OEMs that are trying to pivot to evs but don't have that kind of in house expertise. And so, like one of the big narratives in twenty twenty three was like slowing EV growth that like the EV market is still growing, but it's like slower than usual, and you saw like Ford and GM and all these other players kind of like pull back on their expectations. But like BYD and and Tesla are totally leading the world in volume, and Tesla deliveries year over year it was thirty eight percent growth. I mean that's that's still like significant growth. I mean, Tesla's growth is not like the runaway fifty percent growth that they have had some years, but it's still it's still growing. And yeah, I mean I think BYD does not really sell cars in the United States. So that's why, like a lot of people like are like what the hell is BYD because you don't see like a BYD car on the freeway.

But they are a massive player.

But they are a massive player.

Yeah, and China is a massive market, a massive market that of course Tesla has wanted to participate in. I mean, does this, I mean, does this bode ill at least for Tesla's sort of like big hope for growth in China.

Yeah, and China is a massive market, a massive market that of course Tesla has wanted to participate in. I mean, does this, I mean, does this bode ill at least for Tesla's sort of like big hope for growth in China.

I think it's going to be very interesting to see in the coming year how Tesla reacts to be widdy in China. They've done a lot to kind of cut prices in China. They do a lot of marketing in China. You know, Tesla owes a lot to China. I mean, the Chinese government really supported the building of that factory in Shanghai. And after the United States, China is far and away Tesla's largest market. So I think just like keeping an eye on price cuts and in the ways that Tesla tries to pull demand levers in China's going to be really interesting.

I think it's going to be very interesting to see in the coming year how Tesla reacts to be widdy in China. They've done a lot to kind of cut prices in China. They do a lot of marketing in China. You know, Tesla owes a lot to China. I mean, the Chinese government really supported the building of that factory in Shanghai. And after the United States, China is far and away Tesla's largest market. So I think just like keeping an eye on price cuts and in the ways that Tesla tries to pull demand levers in China's going to be really interesting.

Sarah, do you think that Elon Musk's sort of seeding the crown, the electric vehicle crown to another company is significant? I mean, how much of his mythology is kind of baked into like being the market leader. Do you think this, you know, ultimately becomes no big deal.

Sarah, do you think that Elon Musk's sort of seeding the crown, the electric vehicle crown to another company is significant? I mean, how much of his mythology is kind of baked into like being the market leader. Do you think this, you know, ultimately becomes no big deal.

I think if if I'm Elon Musk, I'm taking credit for it, right, it's like a victory because he started the evy revolution of the modern era, and so other companies succeeding in it. It's like a reflection of his own influence on the market, or at least that's how I'd see if I were being optimistic. But I think that, you know, in the past, we've heard him say, like take credit for the whole ev revolution, which is why we've talked about how he felt so snubbed when Biden didn't so much as mentioned Tesla when he talked about the proliferation of EV's in the US.

I think if if I'm Elon Musk, I'm taking credit for it, right, it's like a victory because he started the evy revolution of the modern era, and so other companies succeeding in it. It's like a reflection of his own influence on the market, or at least that's how I'd see if I were being optimistic. But I think that, you know, in the past, we've heard him say, like take credit for the whole ev revolution, which is why we've talked about how he felt so snubbed when Biden didn't so much as mentioned Tesla when he talked about the proliferation of EV's in the US.

Dana, you talked about the cyber truck briefly, you know. I read your article on Bloomberg dot Com about sort of different guesses as to how many cyber trucks were sold. I think the analyst estimates range from anywhere from what several hundred to several thousand. We know that there was at least one cyber truck out there because there was a crash reported over the weekend involving a Toyota Corolla did not end super well for the Corolla, although there are no injuries. I mean, just just from sort of social media and scattered reports from Tesla dealerships, do we have any sense of how many cyber trucks are on the road or how this whole process is going that we've been talking about for the last few months.

Dana, you talked about the cyber truck briefly, you know. I read your article on Bloomberg dot Com about sort of different guesses as to how many cyber trucks were sold. I think the analyst estimates range from anywhere from what several hundred to several thousand. We know that there was at least one cyber truck out there because there was a crash reported over the weekend involving a Toyota Corolla did not end super well for the Corolla, although there are no injuries. I mean, just just from sort of social media and scattered reports from Tesla dealerships, do we have any sense of how many cyber trucks are on the road or how this whole process is going that we've been talking about for the last few months.

I think Elon tweeted over the weekend that there are a couple hundred out there now and a lot of them are in so a couple of hundred on the roads, I guess in the hands of customers. You know, there are cyber trucks in showrooms. You know, it's a big marketing thing for Tesla. They want people to come to the showroom to see the cyber truck and then hopefully like sit in a model why and then buy a model why. I mean I saw one in real life. I was walking to Trader Joe's and like one drove by, and I was like, oh, there's a cyber.

I think Elon tweeted over the weekend that there are a couple hundred out there now and a lot of them are in so a couple of hundred on the roads, I guess in the hands of customers. You know, there are cyber trucks in showrooms. You know, it's a big marketing thing for Tesla. They want people to come to the showroom to see the cyber truck and then hopefully like sit in a model why and then buy a model why. I mean I saw one in real life. I was walking to Trader Joe's and like one drove by, and I was like, oh, there's a cyber.

Truck, so an actual moving one, an actual moving one. You know, they largely seem to be like on the road in Texas and in California. I think that's where the first deliveries are probably going to. But you know, they've warned that it's going to be a very slow ram. I just think the fact that they didn't break out how many of the delivered in today's quarterly sales report is just really telling, like it's not a lot. The crash that you mentioned was kind of classic in that, like, you know, we don't really I mean, most journalists don't write about car crashes unless it's a Tesla, and that's been like a beef that Tesla has had for quite some time. Like God, you know, like there are thousands of car crashes across the country every day and like none of them make headlines unless it's Tesla. In this case, I think the Corolla across the median and like ran into the cyber truck, and there's no evidence that the cyber truck caused this crash.

Truck, so an actual moving one, an actual moving one. You know, they largely seem to be like on the road in Texas and in California. I think that's where the first deliveries are probably going to. But you know, they've warned that it's going to be a very slow ram. I just think the fact that they didn't break out how many of the delivered in today's quarterly sales report is just really telling, like it's not a lot. The crash that you mentioned was kind of classic in that, like, you know, we don't really I mean, most journalists don't write about car crashes unless it's a Tesla, and that's been like a beef that Tesla has had for quite some time. Like God, you know, like there are thousands of car crashes across the country every day and like none of them make headlines unless it's Tesla. In this case, I think the Corolla across the median and like ran into the cyber truck, and there's no evidence that the cyber truck caused this crash.

And crucially, I think you know, the Corolla driver's okay, which obviously there are people warning and probably validly warning about the size of this thing and the potential danger composed to sedans, although in this case it seems like luckily everybody was okay. I mean, for me, the big thing with the cyber truck is that this, you know, it's this kind of boundary breaking vehicle. It's totally different, it's totally sci fi and because of the way it's rolling out, there's a bit of a letdown here, and we see it in these numbers, you know, we see it over the last few weeks where Elon Musk did this amazing thing. He introduced this like back to the future car and it's kind of like, you know, not a whole lot of excitement, partly because they haven't managed to get these on the road.

And crucially, I think you know, the Corolla driver's okay, which obviously there are people warning and probably validly warning about the size of this thing and the potential danger composed to sedans, although in this case it seems like luckily everybody was okay. I mean, for me, the big thing with the cyber truck is that this, you know, it's this kind of boundary breaking vehicle. It's totally different, it's totally sci fi and because of the way it's rolling out, there's a bit of a letdown here, and we see it in these numbers, you know, we see it over the last few weeks where Elon Musk did this amazing thing. He introduced this like back to the future car and it's kind of like, you know, not a whole lot of excitement, partly because they haven't managed to get these on the road.

All the ones I've seen in San Francisco have been prototypes that actual employees are testing or driving. Yeah, they say RC and the side release candidate.

All the ones I've seen in San Francisco have been prototypes that actual employees are testing or driving. Yeah, they say RC and the side release candidate.

Does that make you the coolest person in San Francisco or the least cool person in San Francisco, Sarah?

Does that make you the coolest person in San Francisco or the least cool person in San Francisco, Sarah?

That I've seen them, they're just surrounding by.

That I've seen them, they're just surrounding by.

You Ris here. All right. So last thing I want to do before we move on is just is Dan, I just get a sense from you over what this means for the for Tesla going forward. So we're going to see an earnings report at the end of the at the end of the month. What are you thinking about there? What are you thinking about kind of looking ahead for Elon Musk's car company.

You Ris here. All right. So last thing I want to do before we move on is just is Dan, I just get a sense from you over what this means for the for Tesla going forward. So we're going to see an earnings report at the end of the at the end of the month. What are you thinking about there? What are you thinking about kind of looking ahead for Elon Musk's car company.

Yeah, So the big question I think on everybody's mind is what guidance does Tesla give for twenty twenty four in terms of how many vehicles are they going to deliver? You know, they set a target of one point eight million for twenty twenty three. They met that target, but what is it for twenty twenty four?

Yeah, So the big question I think on everybody's mind is what guidance does Tesla give for twenty twenty four in terms of how many vehicles are they going to deliver? You know, they set a target of one point eight million for twenty twenty three. They met that target, but what is it for twenty twenty four?

Is it like.

Is it like.

Barely any growth? Is it going to be like two million, Is it going to be two point five? Is it going to be three? I mean, Elon is always about growth, and they don't really have They have like a pretty stale lineup right now, and the cyber truck is not out in high volumes. So how are they going to grow given that, like their best seller.

Barely any growth? Is it going to be like two million, Is it going to be two point five? Is it going to be three? I mean, Elon is always about growth, and they don't really have They have like a pretty stale lineup right now, and the cyber truck is not out in high volumes. So how are they going to grow given that, like their best seller.

The Model Why, is four years old.

The Model Why, is four years old.

I mean, I'm sure that they'll like refresh it, they'll probably enter some new markets, but they don't have anything fancy and snazzy, and the cyber truck is going to be very slow going, So just the whole question of their guidance is the big one for investors. And then how do these price cuts that they've had all year impact the margins and it? You know, in twenty twenty three, Elon Musk made this very shrewd decision that they were going to chase volume over margins to kind of protect their market share, and that gambit basically worked. I mean, they cut prices, they moved metal, but how far how low are they willing to go?

I mean, I'm sure that they'll like refresh it, they'll probably enter some new markets, but they don't have anything fancy and snazzy, and the cyber truck is going to be very slow going, So just the whole question of their guidance is the big one for investors. And then how do these price cuts that they've had all year impact the margins and it? You know, in twenty twenty three, Elon Musk made this very shrewd decision that they were going to chase volume over margins to kind of protect their market share, and that gambit basically worked. I mean, they cut prices, they moved metal, but how far how low are they willing to go?

I mean, are they going to.

I mean, are they going to.

Continue to cut prices or have we reached kind of like a steady state. And then do they start advertising, Like what are they going to do to actually get new people into these cars? People who are not like your generic like sort of early adopter, tech savvy, you know, environmental climate change caring person Like the wave of people who wanted to buy an EV basically already have out. It's this like real effort to kind of convince Middle America to consider an EV and that's something that Tesla hasn't really had.

Continue to cut prices or have we reached kind of like a steady state. And then do they start advertising, Like what are they going to do to actually get new people into these cars? People who are not like your generic like sort of early adopter, tech savvy, you know, environmental climate change caring person Like the wave of people who wanted to buy an EV basically already have out. It's this like real effort to kind of convince Middle America to consider an EV and that's something that Tesla hasn't really had.

To do before. Well, we know they're going to advertise on X yeah, which really needs it, right, Yeah.

To do before. Well, we know they're going to advertise on X yeah, which really needs it, right, Yeah.

I wonder how much they'll spend with what the spend will be.

I wonder how much they'll spend with what the spend will be.

All right, well, let's talk about X then, because you know, on the last day of twenty twenty three, Axios reported that Fidelity, as I said at the top of the show, the big asset manager, cut its valuation of the company, uh, making it seventy one point five percent less valuable than it was at the time that Elon Musk purchased it for forty four billion. I think that implies a valuation about just over twelve billion. This disclosure includes a nearly eleven percent drop in November. Sarah, I found myself kind of a nerd to this kind of report just because it's like, oh, yeah, you know this platform that's been gasping for air for months that Elon Musk has been you know, insulting you know, advertisers. It's almost like, yeah, no, crap, it's lost a lot of money. What does this report mean?

All right, well, let's talk about X then, because you know, on the last day of twenty twenty three, Axios reported that Fidelity, as I said at the top of the show, the big asset manager, cut its valuation of the company, uh, making it seventy one point five percent less valuable than it was at the time that Elon Musk purchased it for forty four billion. I think that implies a valuation about just over twelve billion. This disclosure includes a nearly eleven percent drop in November. Sarah, I found myself kind of a nerd to this kind of report just because it's like, oh, yeah, you know this platform that's been gasping for air for months that Elon Musk has been you know, insulting you know, advertisers. It's almost like, yeah, no, crap, it's lost a lot of money. What does this report mean?

I think that there is some real significance here because we don't have any insight right now into how X is valuing itself, how they are telling bankers they're doing, and investors what kind of information those people are getting, and so the Fidelity numbers, although you know it's not perfect we don't know how many shares they hold, we don't know what kind of information they get from from X. It is at least like a rare public disclosure of something about this company.

I think that there is some real significance here because we don't have any insight right now into how X is valuing itself, how they are telling bankers they're doing, and investors what kind of information those people are getting, and so the Fidelity numbers, although you know it's not perfect we don't know how many shares they hold, we don't know what kind of information they get from from X. It is at least like a rare public disclosure of something about this company.

Yeah, and I guess it's also a counterpoint. You know. Unfortunately for me, I listened to the Kathy Wood Elon Musk Twitter spaces Kathy would investor in X, and you know, sort of spent most of the time talking her book and was sort of keeping praise on the on Elon Musk's campaign to take on the woke mind virus, as she sees it. And so of course this is a counterpoint and maybe like a douse of cold water or something on the kind of universe of boosters who've been kind of promoting this thing.

Yeah, and I guess it's also a counterpoint. You know. Unfortunately for me, I listened to the Kathy Wood Elon Musk Twitter spaces Kathy would investor in X, and you know, sort of spent most of the time talking her book and was sort of keeping praise on the on Elon Musk's campaign to take on the woke mind virus, as she sees it. And so of course this is a counterpoint and maybe like a douse of cold water or something on the kind of universe of boosters who've been kind of promoting this thing.

I think it's also just interesting because it really kind of punctuates this myth of Elon as being this financial genius, right, like he has done all these incredible things. SpaceX is the most valuable private company in the US. Tesla is like the eighth or ninth largest company in the world. He like really shrewdly raised capital at a time when interest rates were low, and then like X is like the big time that he really missed time in the market, he overpaid, He spent forty four billion dollars on this thing right before the market started to createor and he has not been able to turn it around. And like for him to sort of be the owner of a company that is now worth far less than what he paid for it, and then he's got all this debt.

I think it's also just interesting because it really kind of punctuates this myth of Elon as being this financial genius, right, like he has done all these incredible things. SpaceX is the most valuable private company in the US. Tesla is like the eighth or ninth largest company in the world. He like really shrewdly raised capital at a time when interest rates were low, and then like X is like the big time that he really missed time in the market, he overpaid, He spent forty four billion dollars on this thing right before the market started to createor and he has not been able to turn it around. And like for him to sort of be the owner of a company that is now worth far less than what he paid for it, and then he's got all this debt.

That he has to service. And also I think what's important here is this number is not about Elon. I mean a lot of the other rhetoric about X, the other decisions we've seen people make have been about his behavior directly, you know, advertisers pulling money. Elon Musk calls them haters, says, go f yourself. Like he he really feels like every time somebody takes money away from X, that's you know, a personal slight against him and the company and the future. This you know, consciousness of humanity or what have you. This is about Fidelity telling its investors here's what we have and what it's worth based on our best guesses, based on all the numbers we have all you know, whether it's a third party valuation or you know, market comps or what have you. This is Fidelity, you know, not making it about Elon just kind of giving an update to their portfolio.

That he has to service. And also I think what's important here is this number is not about Elon. I mean a lot of the other rhetoric about X, the other decisions we've seen people make have been about his behavior directly, you know, advertisers pulling money. Elon Musk calls them haters, says, go f yourself. Like he he really feels like every time somebody takes money away from X, that's you know, a personal slight against him and the company and the future. This you know, consciousness of humanity or what have you. This is about Fidelity telling its investors here's what we have and what it's worth based on our best guesses, based on all the numbers we have all you know, whether it's a third party valuation or you know, market comps or what have you. This is Fidelity, you know, not making it about Elon just kind of giving an update to their portfolio.

Do we have any sense actually what goes into this this sort of valuation, or like what they're even going on.

Do we have any sense actually what goes into this this sort of valuation, or like what they're even going on.

I mean, that's that's the hard part. It's all behind the scenes that we know that X has given its largest holders some information about the progress of the business. Bloomberg reported that the company's ad sales were projected to slump this year to about two point five billion. That is a dramatic slump from from last year. So there's some real, you know, money at play here. I should note that this change in valuation happened almost right after the Musk comments to advertisers at the deal Book conference. This is a November thirtieth update, so it could have even you know, they're going to have to reevaluate it.

I mean, that's that's the hard part. It's all behind the scenes that we know that X has given its largest holders some information about the progress of the business. Bloomberg reported that the company's ad sales were projected to slump this year to about two point five billion. That is a dramatic slump from from last year. So there's some real, you know, money at play here. I should note that this change in valuation happened almost right after the Musk comments to advertisers at the deal Book conference. This is a November thirtieth update, so it could have even you know, they're going to have to reevaluate it.

And does this have any impact on the you know, the debt payments that Elon Musk give, you know, the efforts to renegotiate debt, like the like what Sarah looking ahead, where is X financially and like, does does Elon Musk have you know, have any hope of of sort of quickly turning things around?

And does this have any impact on the you know, the debt payments that Elon Musk give, you know, the efforts to renegotiate debt, like the like what Sarah looking ahead, where is X financially and like, does does Elon Musk have you know, have any hope of of sort of quickly turning things around?

Well quickly is going to be tough, but you know, all of the banks have the debt on hand on their balance sheets. Obviously it's been uncomfortable for them. They can't sell it. They've tried, and they have this agreement amongst themselves that if they sell it, you know, everyone gets to sell it at the same price. So it's not like, you know, Morgan Stanley can just sell it at twenty cents on the dollar and get rid of it. If they sell it at that amount, everyone is allowed to sell whatever portion they have. That's so they don't end up undercutting each other on offloading this debt. Eventually, so a few things could happen. I mean, there could be restructuring of X. If it gets really bad, they could go into some as Musk has hinted at. I don't think that they will because if that happens, then all the equity would just become zero. And I don't think that Musk would want to do that to all his close friends and investors that put money into this company. And he's actually said like, I don't I don't plan to start losing money for people now. So I think he's going to try to find a way to turn it around. My best guess is that he's going to use the Grock AI as like a launch point for trying to make X about more than just a social network and ride the AI hypewave. That's one way that could happen. But then, you know, everyone has a chatbot now, so how special is that?

Well quickly is going to be tough, but you know, all of the banks have the debt on hand on their balance sheets. Obviously it's been uncomfortable for them. They can't sell it. They've tried, and they have this agreement amongst themselves that if they sell it, you know, everyone gets to sell it at the same price. So it's not like, you know, Morgan Stanley can just sell it at twenty cents on the dollar and get rid of it. If they sell it at that amount, everyone is allowed to sell whatever portion they have. That's so they don't end up undercutting each other on offloading this debt. Eventually, so a few things could happen. I mean, there could be restructuring of X. If it gets really bad, they could go into some as Musk has hinted at. I don't think that they will because if that happens, then all the equity would just become zero. And I don't think that Musk would want to do that to all his close friends and investors that put money into this company. And he's actually said like, I don't I don't plan to start losing money for people now. So I think he's going to try to find a way to turn it around. My best guess is that he's going to use the Grock AI as like a launch point for trying to make X about more than just a social network and ride the AI hypewave. That's one way that could happen. But then, you know, everyone has a chatbot now, so how special is that?

I guess we'll see, all right, Before we get to any you know, full fully fledged predictions, I want to ask one more question to Dana, which is, you know, we've been talking I feel like for a year, over a year really over.

I guess we'll see, all right, Before we get to any you know, full fully fledged predictions, I want to ask one more question to Dana, which is, you know, we've been talking I feel like for a year, over a year really over.

The sort of behavior on X potentially spilling over to Tesla. You know, we got these new numbers basically meeting expectations. Why hasn't what's happening on X seemed to have an impact on Tesla? And can we are we getting to the point where you can include maybe it won't like maybe maybe the attributes of the car, you know, exist on their own.

The sort of behavior on X potentially spilling over to Tesla. You know, we got these new numbers basically meeting expectations. Why hasn't what's happening on X seemed to have an impact on Tesla? And can we are we getting to the point where you can include maybe it won't like maybe maybe the attributes of the car, you know, exist on their own.

Well, I mean, you and I have kind of wrote a story about this last year, right, Like, there's definitely anecdotal evidence that there are there's like a never Tesla crowd. There are consumers out in the world who will never buy a Tesla because they think that what Elon Musk has done to Twitter slash X is like abhorrent and like they're just never going to buy a Tesla. But fundamentally, people buy cars because of the price and the range and the quality of the technology, and like Tesla is still kind of the main game in town, at least here in the United States. I think the other thing is that how Elon behaves, it's so much more of like a US centric thing that people pay attention to than it is globally, Like I'm not I'm not aware of like how closely the average consumer in China tracks what Elon Musk is saying on Twitter at you know, two o'clock in the morning. And so the brand has always been very closely intertwined with Elon. But what you're seeing on X and Sarah alluded to this earlier, is like a lot more Tesla executives are now using X to kind of promote the company, like like more executives are tweeting, you know, every every facet of Tesla now has its own handle, like the cyber truck and the recruiting team and the factories and like optimists th Robot has its own like you know, Twitter account, And so you're seeing more the company do a lot more kind of marketing on X. And to Sarah's point, they're going to start advertising or they already have or like that. That's going to be a really interesting thing to watch in twenty twenty four.

Well, I mean, you and I have kind of wrote a story about this last year, right, Like, there's definitely anecdotal evidence that there are there's like a never Tesla crowd. There are consumers out in the world who will never buy a Tesla because they think that what Elon Musk has done to Twitter slash X is like abhorrent and like they're just never going to buy a Tesla. But fundamentally, people buy cars because of the price and the range and the quality of the technology, and like Tesla is still kind of the main game in town, at least here in the United States. I think the other thing is that how Elon behaves, it's so much more of like a US centric thing that people pay attention to than it is globally, Like I'm not I'm not aware of like how closely the average consumer in China tracks what Elon Musk is saying on Twitter at you know, two o'clock in the morning. And so the brand has always been very closely intertwined with Elon. But what you're seeing on X and Sarah alluded to this earlier, is like a lot more Tesla executives are now using X to kind of promote the company, like like more executives are tweeting, you know, every every facet of Tesla now has its own handle, like the cyber truck and the recruiting team and the factories and like optimists th Robot has its own like you know, Twitter account, And so you're seeing more the company do a lot more kind of marketing on X. And to Sarah's point, they're going to start advertising or they already have or like that. That's going to be a really interesting thing to watch in twenty twenty four.

All right, so we'll we'll keep an eye on that. But now I want to turn to predictions. It's it's the beginning of the year. I think we should go around. Each of us should make a prediction. Sarah, let's start with you predictions for twenty twenty four.

All right, so we'll we'll keep an eye on that. But now I want to turn to predictions. It's it's the beginning of the year. I think we should go around. Each of us should make a prediction. Sarah, let's start with you predictions for twenty twenty four.

So I think that we are going to see X have much less influence on the twenty twenty four elections than everyone thinks they will. I think by then the political conversation will have moved maybe elsewhere, or or if it is if it is another Trump versus Biden election, I think that there's just going to be a lot of widespread apathy about that pairing and people who dislike both candidates, and there just won't be nearly the level of discussion line that we saw in the prior election. So maybe this is my like fingers crossed.

So I think that we are going to see X have much less influence on the twenty twenty four elections than everyone thinks they will. I think by then the political conversation will have moved maybe elsewhere, or or if it is if it is another Trump versus Biden election, I think that there's just going to be a lot of widespread apathy about that pairing and people who dislike both candidates, and there just won't be nearly the level of discussion line that we saw in the prior election. So maybe this is my like fingers crossed.

But you're just wish casting here, I think.

But you're just wish casting here, I think.

Well, I also think that you know, we're seeing a decrease in relevance of the platform itself.

Well, I also think that you know, we're seeing a decrease in relevance of the platform itself.

When Donald Trump names Grock his you know, likely candidate for Secretary of Defense, then you will have to eat your words. I will, Dana, what about you? What do we have? Can you? Sarah gave us Actually what I think is a pretty positive prediction. It's something to look forward to for twenty twenty four. What do you have? What are you sort of hoping for or expecting in the new year.

When Donald Trump names Grock his you know, likely candidate for Secretary of Defense, then you will have to eat your words. I will, Dana, what about you? What do we have? Can you? Sarah gave us Actually what I think is a pretty positive prediction. It's something to look forward to for twenty twenty four. What do you have? What are you sort of hoping for or expecting in the new year.

So I guess my prediction is that I think Elon Musk is going to increasingly cast himself as like an aggrieved victim of government overreach. And we've already seen this play out with you know, he has tangled with regulatory agencies his entire career. You know, NITS is the fun Police, the SEC is this Short Seller Enrichment Commission.

So I guess my prediction is that I think Elon Musk is going to increasingly cast himself as like an aggrieved victim of government overreach. And we've already seen this play out with you know, he has tangled with regulatory agencies his entire career. You know, NITS is the fun Police, the SEC is this Short Seller Enrichment Commission.

The FTC, and the FCC. He's no fan of them.

The FTC, and the FCC. He's no fan of them.

And like, as his empire grows, like various government agencies are going to try to, you know, rain him in with varying degrees and pretty limited success. But I think that going into an election cycle, you're just going to see Elon increasingly take the tack that like he is a victim of big government overreach and that all these regulatory agencies and Biden in particular are out to get him, and that like these mean government people are trying to you know, ruin him and don't appreciate all that he's done for job growth in the United States.

And like, as his empire grows, like various government agencies are going to try to, you know, rain him in with varying degrees and pretty limited success. But I think that going into an election cycle, you're just going to see Elon increasingly take the tack that like he is a victim of big government overreach and that all these regulatory agencies and Biden in particular are out to get him, and that like these mean government people are trying to you know, ruin him and don't appreciate all that he's done for job growth in the United States.

My prediction is sort of related to Sarah's, but it's maybe a little less serious. I predict that Elon Musk and Georgia Maloney, the leader of Italy, will intensify their alliance. However that means, and I do think we should be on Elon Musk romance watch here. I hope I'm not overstepping the bounds of the good sense of this podcast, but Elon Musk spent part of December there. He spent a lot of time talking about the need to make more Italians, and I do think there's some breadcrumbs here if we're willing to follow him, I.

My prediction is sort of related to Sarah's, but it's maybe a little less serious. I predict that Elon Musk and Georgia Maloney, the leader of Italy, will intensify their alliance. However that means, and I do think we should be on Elon Musk romance watch here. I hope I'm not overstepping the bounds of the good sense of this podcast, but Elon Musk spent part of December there. He spent a lot of time talking about the need to make more Italians, and I do think there's some breadcrumbs here if we're willing to follow him, I.

Think the podcast might want to consider like a trip to Italy to kind of do some on the ground reporting here. I mean, it seems like this is you know, New Year's New Beginnings Coliseum episode. A lot of people take stock of their relationships when the New year begins.

Think the podcast might want to consider like a trip to Italy to kind of do some on the ground reporting here. I mean, it seems like this is you know, New Year's New Beginnings Coliseum episode. A lot of people take stock of their relationships when the New year begins.

I agree we need an off site and I will bring that up with David Popadopolis the next time he's here. Okay, let's leave it there. Thanks for listening to Elon Inc. And thanks to our panel Sarah Fryar and Dana Hall.

I agree we need an off site and I will bring that up with David Popadopolis the next time he's here. Okay, let's leave it there. Thanks for listening to Elon Inc. And thanks to our panel Sarah Fryar and Dana Hall.

Always a pleasure anytime.

Always a pleasure anytime.

This episode was produced by Stacy Wong. Naomi Shaven and Rayhan Harmansi are our senior editors. The idea for this very show also came from Rayhon Blake Maples handles engineering, and we get special editing assistants from the one and only Jeffrey Grocott. Our supervising producer is Magnus Hendrickson. Thanks a bunch to BusinessWeek Editor Joel Weber. The Elon Inc. Theme is written and performed by Taka Yazuzawa and Alex Sigierira Sage Bauman is the head of Bloomberg Podcasts and our executive producer. I'm Max Chafkin. If you have a minute, rate and review our show, it'll help other listeners find us and we will appreciate it. Happy New Year to you and see you next week.

This episode was produced by Stacy Wong. Naomi Shaven and Rayhan Harmansi are our senior editors. The idea for this very show also came from Rayhon Blake Maples handles engineering, and we get special editing assistants from the one and only Jeffrey Grocott. Our supervising producer is Magnus Hendrickson. Thanks a bunch to BusinessWeek Editor Joel Weber. The Elon Inc. Theme is written and performed by Taka Yazuzawa and Alex Sigierira Sage Bauman is the head of Bloomberg Podcasts and our executive producer. I'm Max Chafkin. If you have a minute, rate and review our show, it'll help other listeners find us and we will appreciate it. Happy New Year to you and see you next week.