00:00I'm tempted to ask, would becoming a trillionaire change Elon Musk in any way, or how would it change him?
00:04But in all seriousness, would he be satisfied then? Clearly, pay is important to him.
00:09He's made it a serious part in board discussions.
00:11I think that pay is important to him insofar as it's sort of a scoreboard of his achievement.
00:17As well, he has big ambitions here.
00:20He's attempting to invest huge sums of money in the political system.
00:25There's big plans here with SpaceX.
00:27Of course, now the hope would be that the public is going to fund SpaceX's plan rather than Elon Musk
00:32personally.
00:33But he is somebody who has cared about, he may not care about material wealth or his house.
00:39That's what he always says.
00:40But he is somebody who's been very, very focused on his personal wealth, his pay.
00:44We've seen these fights over pay packages for years.
00:47He even, in an exchange on X earlier this year, corrected someone, insisted that he was a trillionaire, I guess
00:54a little prematurely.
00:55So this is, he has been focused on his net worth, even if he says he's not focused on material
01:00wealth.
01:01Let me stick with focus, but in a different light here.
01:03That is how he's going to be able to run this company when it goes public, when he has other
01:06things kind of drawing his attention.
01:08He is the techno king of Tesla.
01:11I believe that's the official term.
01:12It's in the prospectus that I mentioned earlier.
01:14Any concern among these legions of retail investors who are going to be backing him today about his capacity to
01:19do this and that simultaneously?
01:21I don't think there's any concern among the legion of retail investors.
01:23That's what they're betting on.
01:25I think when you talk to institutional investors, there are people who will quietly say that this is a concern.
01:32And we saw this risk factor come up with Tesla, that that was the justification for paying him this latest
01:40huge pay package, that there was a risk that he would take his AI ball and play elsewhere.
01:45I think this is why so many people think that Tesla and SpaceX are eventually going to merge, that you
01:52have two companies run by the same person.
01:54They're both kind of doing the same thing.
01:57And you have shareholder bases that have essentially the same thesis, which is Elon Musk is great.
02:03We're going to follow him to the moon.
02:04There's a massive distinction between economic ownership and voting power.
02:08And Musk is going to come out of this IPO, 84 percent voting power at SpaceX, which, you know, when
02:15Max and I over the last 12 months were writing about Elon's world and particularly the Tesla, the whole pay
02:21package point, he would argue, would he not, Max, it's about control.
02:25He can only execute the vision that he's outlining if he's not at risk from activist investors and so on.
02:32Yeah, absolutely.
02:32And this setup at SpaceX is complete control.
02:36I mean, not just the 85 percent, you know, voting control, but also the fact that they've moved it from
02:42Delaware to Texas, where the, you know, the courts are set up in a way that's much more favorable to
02:48management.
02:48You also have provisions in this IPO around arbitration for, you know, shareholder class actions.
02:54Basically, no one is going to be able to force Musk to do what he wants.
02:58The only thing that can force him is the stock market, is the fact that, you know, if the stock
03:04market doesn't like this plan,
03:05and doesn't believe in the idea of space data centers, which I think is very possible, especially as, you know,
03:10depending on what happens with the AI market in general, then I think that might could force changes.
03:15So SpaceX is already a conglomerate, right?
03:17X was brought into XAI, and now they're all part of SpaceX.
03:22Is there a point at which Tesla becomes part of the conglomerate as well, Ed, let me ask you?
03:25You know, because in that situation, nobody could complain that he wasn't being able to, you know, give time to
03:32each company, because essentially he's giving time to their conglomerate.
03:35The idea is out there in the market.
03:37We reported prior to the XAI and SpaceX merger that both boards had met and discussed the idea of a
03:43SpaceX and Tesla merger anyway, and that there was a large group of SpaceX investors that basically went to Elon
03:47and the rest of SpaceX management and were like,
03:49this makes much more sense to go with Tesla. In this IPO, yes, retail is massively oversubscribed.
03:56There are loads of Tesla shareholders that did not buy shares in the IPO or tried to get an allocation
04:02because they think that's going to happen anyway.
04:04Why bother? You know, you'll get your comp or your reward if the transaction were to happen.
04:08It is also a way to kind of address some of the issues at Tesla.
04:12You remember, look at Tesla and what you have is kind of a troubled car company and a very, you
04:19know, as the investors see it, a very promising AI thing.
04:22If Tesla is not able to kind of get its car business on the right track pretty quickly, you know,
04:29either by, you know, bringing lots more robo taxis to the market.
04:32Right now, they just have a few dozen in a couple of cities that are, you know, operating unsupervised.
04:37If they aren't able to sort of find some new gear in terms of automotive sales, this could be a
04:42way to say, okay, you know, we don't need to worry about being a car company.
04:45Now we're just going to be part of this amazing vertically integrated AI rocket ship.
04:49To watch the proceedings there at the NASDAQ trading floor, I just want to point that out.
04:52Yes, the head of the company.
04:53You mentioned the boards having talked to one another in the minute that we have left here, Ed.
04:57I'm curious about that, the power that this board will have, if any.
05:00You've talked about his capacity to pick who's going to be on that board and to relieve them if he
05:04wants.
05:06Notoriously, Elon Musk's boards don't have much power to push back.
05:09Well, hopefully everyone else read the prospectus like you did.
05:12But basically, you know, his comp for SpaceX is based on restricted shares that he has to hit market cap
05:18milestones to get,
05:19but also establish a permanent human colony on Mars.
05:22Yes, a permanent human colony on Mars in order to unlock his compensation.
05:27That's the board's control.
05:28They had it written into the dock that the board of SpaceX, think about its composition.
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