Is a Judge’s Request for “Reasonableness” a Win for Elon Musk?

Chris Hill: This week, a federal judge gave Elon Musk and the SEC two weeks to settle the dispute about whether Musk violated the settlement he had …

In October, in the wake of a particularly ill-considered “funding secured” tweet regarding the possibility of taking his company private, the CEO of Tesla (NASDAQ:TSLA), Elon Musk, cut a deal with the Securities and Exchange Commission that cost him some money, a soupçon of unfettered power, and — perhaps most painful — the right to be completely unfiltered and unsupervised in his social media postings. Since then, it has become clear that the billionaire remains determined to live on the edge when it comes to the tweeting part of that agreement, and the SEC asked a judge to hold him in contempt. Late last week, the judge essentially told them all to play nice, and figure it out like adults.

In this segment of the Motley Fool Money podcast, host Chris Hill and Fool senior analysts Andy Cross and Jason Moser consider what that agreement might look like, and discuss how Tesla — the stock and the company — will weather the next downturn, whether Musk can (or should) give up “poking the bear,” and the automaker’s path to profitability.

To catch full episodes of all the Motley Fool’s free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on April 5, 2019.

Chris Hill: This week, a federal judge gave Elon Musk and the SEC two weeks to settle the dispute about whether Musk violated the settlement he had agreed to back in October. Judge Alison Nathan told both sides to “take a deep breath and put on their reasonableness pants.” I’m unfamiliar with these pants, but I like the approach that the judge is taking here.

Jason Moser: I feel like I’m going to take that home and use it on my kids once or twice in the coming week. Listen, this is such a battleground stock. I really do feel sorry for anyone who is exceptionally over-weight in this company. It’s got to be tough to sleep at night if you are. Probably the worst thing about this is that I’m not surprised at all. [laughs] I think that the trouble with being a publicly traded company is that Tesla the business is going to be held to these arbitrary benchmarks on a quarterly basis when it comes to producing cars. What we’re finding now, and I’m sure what Elon Musk has known for a while, is that it’s very difficult to make and sell cars.

I think the bigger question for Tesla, for me — I think they’ve clearly established themselves as a viable competitor in the space. But you look at the business itself, it’s anything but simple, the capital structure. I start thinking ahead to when the next recession hits — we know that’s when, not if — what happens to this stock when that next recession hits? Because I think the space is only going to get more and more difficult now, more and more competitive. From a management perspective, it’s probably better if Musk quits poking the bear and just focused on actually running the company. But clearly, he likes stirring up trouble. I don’t know that you’re going to be able to get away from that.

Andy Cross: Poking the bear, you’re talking about the SEC. Let’s just talk about the quarter. They delivered 63,000 vehicles. That’s down 31% from the fourth quarter, which was a record. The Model 3, which is really what they’re banking on being the mass-market vehicle for consumers, deliveries there were down 20%. So, what I’m looking forward to is understanding how the Model 3 will be from a profitability perspective. As they lower that price to drive up demand, will that be profitable enough to continue to drive Tesla toward some kind of profitability that investors are ultimately going to want?

Hill: If you’re a shareholder, do you want Elon Musk being reasonable? I don’t think he got to where he is at this point in his life by being reasonable.

Moser: I don’t think, as a shareholder, I want to have to deal with this narrative regarding the investment. I would rather see him just keep his head down and just keep doing what he does best.

Going back to some of those numbers, it is important to note that while those numbers came in shy for quarter one, there was some pull-forward of demand from quarter one into quarter four of last year because of a step-down in the federal tax credit. And that’s important to note, because that goes to that pricing power thing. We’ve always questioned Tesla’s ability to raise prices. Really, there are a lot of incentives involved in getting people to purchase those cars. Talking about profitability, this is not something where they can just raise prices at the drop of a hat.

Cross: That’s in the U.S. So much the demand is coming from Europe and China, and they had some struggles there from the operations side. To Jason’s point, I think the thing we really want to see with them, and the hope is that Elon Musk will do this, which is drive Tesla from a car manufacturing company, being able to solve these problems so they can get these deliveries set to where they want to be and they can manufacture these companies. Especially when I think about China, which they’re investing a ton of money into that Gigafactory over in China.

Moser: Just to reiterate, they did reaffirm in the release prior guidance of 360,000 to 400,000 vehicle deliveries in 2019. They’re not backing off of that number yet. Granted, it’s still very early on in the year, but it’s worth noting.

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Give Elon Musk More Money Act! Legislators Propose Extending EV Credits To Tesla And GM

A bipartisan group of lawmakers plans to introduce a bill to expand federal tax credits for buyers of electric vehicles, in what could be a boon for the …

That Elon Musk is a great entrepreneur is true, sadly one of the ways he’s a great entrepreneur is in his ability to suck taxpayer subsidies into his projects. Tesla, as an example, has waxed fat off the $7,500 credit for buying an electric vehicle, an EV. That credit is now half what it was for Tesla and disappears entirely soon – not good for Tesla’s bottom line or, possibly, its ability to survive. So, what do we see being introduced? A bill to extend Tesla’s eligibility for those credits. Vastly increase Musk’s access to your and my money that is.

The proper name for this is the Give Elon Musk More Money Act:

A bipartisan group of lawmakers plans to introduce a bill to expand federal tax credits for buyers of electric vehicles, in what could be a boon for the growing EV market. The existing $7,500 tax credit for buyers of EVs phases out over 15 months once an automaker sells 200,000 electric cars. The tax credit for Tesla buyers was halved to $3,750 on Jan. 1; General Motor’s tax credit was likewise cut in half starting April 1.

That argument in favour of such subsidies is that they aid in getting a project up off the ground and into mass manufacturing. Which it has done. The argument for increasing or extending it is, well, umm, give Elon more cash?

Reuters reports that Democratic Senators Debbie Stabenow and Gary Peters, Republican Senators Lamar Alexander and Susan Collins and Democratic Representative Dan Kildee are introducing a bill today called ‘Driving America Forward Act’. The main change that the bill would bring is an additional $7,000 tax credit for another 400,000 vehicles after an automaker reaches the original 200,000 vehicle threshold.

DAFA? No, not really. GEMMMA perhaps.

The bill is backed by major automakers including GM, Tesla, Toyota Motor Corp, Ford Motor Co, Fiat Chrysler Automobiles NV, Honda Motor Co, BMW AG, Nissan Motor Co, Volkswagen AG and utilities.

Sure they do. They get to have bundles more of our money. Why wouldn’t they like that?

And yet, well, why should we all be giving more money to Elon Musk? He’s already got tens of billions more than we do, right? Further, Tesla’s had their chance to show they can make their cars work. Maybe they’ve even shown they can. But given that they are now in mass manufacturing no more support is justified. We’ve already subsidised them enough, we’re done.

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Elon Musk: ‘Cryptocurrency is a far better way to transfer value than pieces of paper’

Besides having co-founded PayPal and founding Tesla and SpaceX, Elon was also integral in the creation of Dogecoin, a cryptocurrency that started …
Binance CEO CZ Predicts Significant Influx into Crypto Market
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Elon Musk has been to be one of the most influential people driving the force behind tech innovation today. Besides having co-founded PayPal and founding Tesla and SpaceX, Elon was also integral in the creation of Dogecoin, a cryptocurrency that started as just a dog meme. In fact, Elon Musk is the former CEO of Dogecoin.

During a recent interview with CNBC’s podcast called “For Your Innovation,” Elon Musk had some more wisdom to offer the world. He was quoted as saying that paper money, as we know it, is going away, and he had his reasons well lined up for inspection.

Crypto Is The Better Way To Transfer Value

Giving his reason for bashing fiat, Elon argued that cryptos are a far much better of transferring value as opposed to fiat currencies. As a matter of fact, Elon Musk isn’t the only person to throw this line. Numerous other crypto bigwigs, as well as regular crypto fans and traders, have held that opinion for long.

People Have Stopped Idolizing Cash

According to one Twitter user who commented on the tweet sent out by one Joseph Young regarding Elon’s interview, cash is no longer idolized. That utterance alone signals a broader running sentiment among the crypto community as well as the general world population that cash money is no longer as useful as it used to be before cryptos popped in.

In fact, according to another Twitter user commenting on the thread on CNBC’s twitter feed, a good number of countries are already going cashless. The user went ahead to mention Sweden which plans to introduce its own national cryptocurrency in 2021 and proceed to go totally cashless by 2023. Another user also noted China as one country that also on the way to becoming a cashless economy.

Elon Musk says “Paper money is going away.” via @CNBCMakeIthttps://t.co/GsWL9Pvl0r

— CNBC (@CNBC) April 7, 2019

What About Privacy?

The issue of security, especially privacy, has been a thorny issue in the crypto space. Some fear that going completely cash will give governments leeway to interfere with the decentralized nature of cryptocurrencies and compromise privacy.

On the other hand, there are those who feel that the mass adoption of cryptos would foster better and more efficient financial systems with smoother payment systems.

What’s Your Thought On This ?, Let Us Know In the Comment section Below.


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Elon Musk’s favorite crypto – founder ready to sell the company for $4.2 billion

When Elon Musk praises your cryptocurrency, chances are the price of the digital coin will go up. However, something even more important happened.
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When Elon Musk praises your cryptocurrency, chances are the price of the digital coin will go up. However, something even more important happened. The founder of Dogecoin, Jackson Palmer, said he is ready to sell Dogecoin.com for the colossal sum of $4.2 billion. Elon Musk, after declaring his interest in the crypto, accepted to be the CEO of DOGE.

Mr. Palmer was actually of the cryptocurrency space for some time until Elon Musk’s comment. In his tweet, he said that “Funding (not yet) secured”.

While many are wondering what has pushed the founder to post such a statement, the reasons are very obvious. Dogecoin’s value spiked considerably in the last few days and of course, the praise from Musk must have been also worked on Palmer’s mind.

Interestingly enough, the manager of the Twitter account of Dogecoin posted a poll for the next potential CEO of Dogecoin. Elon Musk won.

Dogecoin is a popular cryptocurrency that was created as a fun currency. However, the digital coin has reached a 24thposition in CoinMarketCap by market cap. The current market cap of Dogecoin is $381m.

Elon Musk in talks with Benjamin Netanyahu for tunnels in Israel

Jerusalem: Elon Musk, the founder of SpaceX, Tesla and Neuralink, is in negotiations with Israels government to build tunnels in the country, said …

Jerusalem: Elon Musk, the founder of SpaceX, Tesla and Neuralink, is in negotiations with Israels government to build tunnels in the country, said Israeli Prime Minister Benjamin Netanyahu.

“I met a man that they call Elon Musk-have you heard of him? A real genius,” the New York-based The Algemeiner journal quoted Netanyahu as saying at a campaign event last week when asked about Israel’s transportation infrastructure.

“Right now, we’re in conversation with him to see if we can tunnel the State of Israel.”

Netanyahu said he and Musk ate breakfast at the Prime Minister’s residence, where the billionaire entrepreneur mentioned tunneling, The Algemeiner reported on Sunday.

According to the state comptroller, ineffective public transportation could cost the Israeli economy $6.9 billion annually by 2030, if dire changes are not implemented.

The billionaire entrepreneur visited Israel in March 2018 and has been in negotiations with Israel’s government to build tunnels.

If the plans work out as intended, Musk’s tunneling firm — Boring Co. — could help in the development of Israel’s tangled transportation network, the report said.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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