July 8, 2025 • 32 mins
On this week’s episode, David Papadopoulos invites Bloomberg political reporter Nancy Cook and Bloomberg Businessweek’s Max Chafkin to the studio to discuss Elon Musk’s latest idea—the creation of the “America Party.” Third parties have famously been losing propositions in American politics, and Cook questions if the distractible multibillionaire even has the patience to handle the paperwork required to register with the Federal Election Commission.
And then there’s his constant string of controversies. Chafkin wonders if there’s a reliable base out there hungry to support the party of a man who called Social Security a Ponzi scheme, initiated a feud with President Donald Trump (still popular with much of Musk’s theoretical rank and file) and whose “DOGE” initiative on Trump’s behalf is accused by some of worsening the catastrophic consequences of the recent flooding in Texas.
Nevertheless, history shows just how disruptive third parties can be when the margins are slim, as they are now. Cook sees a small slice of the electorate, “tech bros who are like, ‘oh, right, we should cut Social Security, we should shrink the federal government’,” who could possibly be converted by the right wing business mogul.
Later in the show, Papadopoulos and Chafkin are joined by Bloomberg stocks reporter Esha Dey to discuss the latest gyrations of the world’s most prominent meme stock, Tesla. The trio discuss the challenges facing the electric car company and dissect a recent eyebrow-raising note from analyst Dan Ives. The prominent Tesla bull presents a simple answer to Tesla’s woes: give Elon more money.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star. A
star is born Elon.
Speaker 3 (00:13):
Juson Kennedy.
Speaker 2 (00:14):
He is the Thomas Edison plus plus plus.
Speaker 4 (00:17):
Of our age.
Speaker 2 (00:18):
Holy, his whole life is from a position of insecurity.
I feel for the guy.
Speaker 4 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty today, I'll pay
in four post.
Speaker 2 (00:30):
We are meant for great things in the United States
of America, and Elon reminds.
Speaker 3 (00:34):
Us of that.
Speaker 2 (00:35):
I'm very disappointed in Elon. I've helped Elon a lot.
Welcome to Elon, a Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, July eighth. I'm your host, David Papadopolos. Okay, America,
are you ready for the America Party? Elon Musk appareently
(01:00):
thinks you are launching the third Party late last week
and making bold declarations about upending the US political order
and what amounts to a dramatic escalation of his feud
with President Donald Trump. So we're going back to DC
to bring in another one of our star political reporters,
Nancy Cook, to get into the nitty gritty with me
and Elon inks stalwart Max Chafkin. Hello to you both.
Speaker 1 (01:24):
Hey, David, Hi, David, Hi Max. Thanks for having me.
Speaker 2 (01:28):
Yeah, Nancy, you know, thanks for coming back. It's been
a while, it's been too long. Now listen. If Elon's
politics are the yin well, then Tesla and its wobbly
share price is the yang. By the way, I actually
have no idea if this actually makes any sense, but
I'm gonna go with it. In with Max, you sort
of yeah, sure, well it's close enough, yeah, good enough
for rock and roll. And we'll bring in Esha Day
(01:50):
to talk about the growing ang swirling in the market
as Musk wades right back into politics. Okay, now, Nancy,
so with your colleague there in Washington, Josh Green, we
had previewed this last week, but then the big beautiful
bill got final approval in Congress and signed into law
by Trump on the fourth of July, and Musk then
(02:11):
announces the formation of the America Party the very next day.
So tell us here, what do we need to know
about the America Party And what as you see it,
do the prospects look like for this thing?
Speaker 1 (02:25):
Well, so Elon Musk was not happy with the tax bill,
which I think that you guys have talked about extensively,
and also hasn't been happy with the tariffs, and so
he has broken with Trump and his advisors on some
very key policy areas and then has threatened to start
this third political party on X. And so far the
(02:46):
idea just lives on X.
Speaker 2 (02:47):
And you use the term threat. Is that really all
it's still is at this point a threat?
Speaker 1 (02:52):
Yes, that's all it is. I mean, creating a third
political party is a huge heavy lift, and not just
heavy lift initially, it's a sustained heavy lift.
Speaker 2 (03:04):
What are some of the mechanics of this heavy lifting?
Speaker 1 (03:07):
Sure, so it would require a ton of money. He
has that, but you know, does he want to you know,
invest that money for the long term to make an
effect in both the midterms and the twenty twenty eight
presidential election or does he need to focus on his companies?
So money is one? Two is his attention span?
Speaker 2 (03:25):
You know?
Speaker 1 (03:25):
Sure he is threatening Trump and Trump officials about this
on X. But to create a third political party, you
have to register with a federal election commission. You have
to go to each individual state and make sure that
your party is registered in each political state. Like you know,
there are some political consultants, I'm sure in DC who
(03:46):
are salivating at the idea of taking Elon's money and
doing this, But to actually do it, it's so much
effort in all these states to do it, and there's
so much paperwork, and so, you know, in addition to
the money, question is does he have sort of this
sustained attention span to do this. And then the other
thing is that we have never really seen a successful
(04:09):
third party. You know, Ross Perrot has tried it in
the past, Andrew Yang tried it, Eddie Roosevelt, yeah, exactly,
No Labels has tried it, but we've never seen like Wallace. Sure,
but we've never seen like a really successful bid for
a third party. This is sort of a threat that
he's making.
Speaker 2 (04:28):
That is true. But Teddy Roosevelt and the Bull Moose Party,
I believe, and Ross Perro and whatever the hell the
name of his party was, they did very much affect
those elections.
Speaker 1 (04:43):
Sure, there is no question that it could affect the election,
and it could you know, sort of siphon off votes
for a Prima Democrat or Republican party. Like Americans are
very unhappy with the political system at this point. But
I think it's just like, does he have the attention
span and the money to do it? You know, for
(05:04):
a while, because really the next marker would be the midterms,
the twenty twenty six mid terms, when Republicans could lose
the House. That's sort of what's up for grabs. Then
and then the twenty twenty eight election, the presidential election.
You know, assuming Trump doesn't try to say a third term,
which would require him changing the constitution, but let's not
put it past him. It will be a totally open election.
(05:26):
There will be people running on the Republican side and
people on the Democratic side, and I think it will
be a very crowded field. And so, you know, does
Musk want to put up a candidate for that? You know,
I think that that's a ways off, but you know,
I think that there are certainly these conversations happening.
Speaker 2 (05:42):
Yeah, so Max, this is something that Josh Green also raised,
the attention span issue, the stick to itiveness sort of dubious,
like Nancy is and Joshing General has a very grim
outlook on the future of the America Party. But it's
curious to me that they both raised that question from
afar and I get it at some level because the
(06:03):
guy just bounces around all over the place, and yet
at the same time, it strikes me that you doubt him,
you question him and his stick toitiveness on something that
he starts obsessing about, and you can get burned.
Speaker 3 (06:16):
Right, Yeah, it's true.
Speaker 5 (06:18):
And you know, some of what Musk has said over
the last couple of days has suggested that he's thinking
about this in the same way that he's thinking about
these big bets. He keeps reposting these comments from fans
that say, like.
Speaker 2 (06:31):
They doubted he could start space X and he did.
Speaker 3 (06:34):
You know, so this is like his next act.
Speaker 5 (06:37):
People forget though, that Musk has threatened to start lots
of that he never actually followed such a so he
threatened to start like a news outlet, or he's done
it a few times, so, you know, made various threats
about media. You know, even give you well he did,
You're right, he did by X. But he said he
was starting this thing called Pravda a few years ago
and that never happened. It's not like he never sort
(06:59):
of flakes out on it. In fact, he flakes out
on threats that he makes on X.
Speaker 2 (07:03):
What's just hit rich.
Speaker 3 (07:04):
I don't know.
Speaker 5 (07:05):
Now obviously, the like sort of maximalist version of this,
which is like he finds, like I don't like, you know,
four hundred congressional candidates and goes through the very hard,
very boring, probably humbling work of trying to get these
people on ballots in individual districts. It's this is what
Nancy's talking about. It would take forever, it would be
(07:25):
very expensive. These candidates would also have to raise a
ton of money from outside. It would just be like
a very messy thing, pretty much the opposite of like
flying into Butler for an hour and enjoying the fun
of a shop rally. But I do wonder what if
something in between happens, right, and Musk has already floated
(07:45):
various versions of this, like he could just like fund
a handful of Republican primary challenges, call it the America Party,
like not actually file with the FEC, but just say, like,
you know, that's what this effort is, and just act
like a normal kind of right wing mega donor attempting
essentially to drag you know, the MAGA coalition to the
(08:06):
right and also probably in the direction of subsidies, you know,
for his companies.
Speaker 2 (08:11):
So like the Tea Party is a wing of the
Republican Party, so too with the America Party. That's what
I'm saying now, Nancy, are you familiar with the term
man moot?
Speaker 1 (08:23):
I am not.
Speaker 5 (08:24):
Oh that's our version of taco. It's Musk always makes
up with Trump. So it's this idea, and I feel
like you are even buying into it in this answer.
It's this idea that like.
Speaker 2 (08:35):
Yeah, don't don't tell her what.
Speaker 5 (08:39):
He's talking a big game, but he's not really gonna
follow through, you know, and we kind of saw this.
Speaker 2 (08:46):
He's got a lot more to lose than Trump does.
But I gotta say this, Max, this is my point here.
Man moot's not right now. It's a looking a little rough.
I actually think it's looking a little bit more like twamum,
what is that? Just that's me moood backwards? Right, But
you're still all in on that mood.
Speaker 3 (09:04):
No.
Speaker 5 (09:04):
I mean, I just think that the force pushing Musk
and Trump together remains, and like you see it even
in the way that Trump is attacking Musk, like he
has like insulted Musk a few times, but it doesn't
feel like and maybe Nancy, maybe I'm just you know,
failing to appreciate this. But like it feels like he
hasn't used his like meanest insults yet. He's also focused
(09:27):
on the third party, not as this like hideous affront,
but he's just sort of said, it's impractical, this is
the way the system is. It feels like he's pulling
his punches a little bit and avoiding giving Musk the
full double barreled you know, insult canon that he sometimes
reserves for his enemies.
Speaker 3 (09:44):
It's always been a two party system, and I think
starting a third party just adds to confusion. It really
seems to have been developed for two parties. Third parties have.
Speaker 5 (09:53):
Never worked, so he can have fun with it, but
I think it's ridiculous.
Speaker 1 (09:58):
Well, Trump also just historic, like does get mad at people.
But I would say one interesting thing about him and
he will attack them and he can be vicious, is
there are very few people that he like the Bridges
are totally burned. You know, he was furious with Steve
Bannon when Steve Bannon left the White House during the
first term. Now they talk. You know, Steve Bannon was
at lunch at the White House, you know, a few
(10:20):
days before Trump bomb Durant. Trump is willing to make
up with people, like I think, much more so than
people realize, and so I could see them one hundred
percent making up. I also just want to make the
point that Elon doing this, you know, also runs the
risk of just really alienating Republican voters who are completely
(10:40):
beholden to Trump, and like, if they're going to pick
someone Trump versus Elon, they're going to pick Trump. I mean,
Trump is not just like a political figure or president,
do you know, He's almost like a movement figure in
terms of politics. I mean, people just feel so strongly
about him. His supporters, his detractors also feel strongly that
I just think, you know, Musk would not just have
(11:02):
to take on the mechanics of the third party and
the money and the time and the attention, but also
just take on sort of the cult of Trump's personality.
Speaker 2 (11:16):
You know.
Speaker 5 (11:16):
I've seen Nancy brought up these political consultants like salivating
over the chance to take Elon Musk's money, and I
uctually see some of this slipping out into public. Andrew
Yang has been tweeting at Musk. Mark Cuban has been
tweeting at Musk. These consultants are all talking about how
great an idea a third party is. But most of
these people are talking about a centrist third party, which
(11:36):
is not what Elon Musk is talking about. He's talking
about like a far right political party. Yes, all right,
what is his complaints, Like, what are his policy positions? Well,
his policy position is that we need to drastically cut
the deficit. Essentially, it's not that the Big Beautiful Bill
is bad because it cut Medicaid, which is what the
centrists think and which actually might be a credible position
(12:00):
from which to start trying to build some kind of
political movement. It's that they didn't cut enough. He's called
social Security a Ponzi scheme on the Joe Rogan Show.
He is not in sort of the mainstream of like
what centrist voters think. His views are sort of out there.
They're all over the place, and he's attacking Trump from
the right.
Speaker 2 (12:18):
Okay, So that is a fair point that saying we
got to go harder at social Security and Medicare and
Medicaid is not a centrist view. But Nancy's saying that
the debt is out of control and our deficits are
out of control. That's not far right politics, is it.
Speaker 1 (12:35):
That's just not a view that is in vogue right
now in Washington, I would say broadly. And it's not
something that voters are caring about. And talking about cutting
social security regardless of party is like the third rail
for voters. Like old people want their social security. They
don't want to support some political figure who talks about
cutting it or even changing it. I mean that's why
(12:57):
Doje I think was so unpopular. That's not a winning position.
Speaker 3 (13:01):
Yeah.
Speaker 5 (13:01):
I mean we're seeing like a little mini illustration of
how what a headache doses is going to be both
for the White House but also maybe even more so
for Elon Musk with this tragedy in Texas right like
one of the subplots. And I think we're I don't
think we know yet, but you're starting to see reports
about was Noah the Weather Service essentially understaff? Did that
(13:22):
contribute to not predicting? Like there's just like a lot
of ways in which.
Speaker 2 (13:26):
An understaff because potentially they were gutted by Doge.
Speaker 5 (13:30):
Yeah, And they're just all sorts of these kind of
little things where we're attacking government services that were working well,
created all sorts of liabilities for Musk and then in
turn for.
Speaker 2 (13:44):
And whether or not that actually turns out to be
the case or not. And I'm not sure we know
the answer to that. The narrative politically certainly does not help.
Speaker 5 (13:52):
Yeah, no, no, And it just shows that like beyond
just like going to the DOGE website and seeing the
top line number, you know, one hundred billion or whatever, like,
there aren't a lot of successes that you can point to.
So it's like it's like a lot of political liabilities
and a lot of disruption, kind of in the bad sense,
without necessarily a ton of political upside.
Speaker 2 (14:14):
Dirt parties have never worked in the sense that they've
never won an election, as you were pointing out, Nancy,
but as I was remembering, Teddy Roosevelt did cause believe
William Howard Taff to lose the election way back when.
And I think you can make an argument that Ross
Perrot cost George Bush the nineteen ninety two election. If
the America Party picks off voters, who is it picking off,
(14:41):
even if it's some at the margin, is it twenty
something year old guys, And where is it pulling people from? Well,
what's a.
Speaker 1 (14:49):
Little early to say, because you would often also have
to see like who are the candidates that this party
is putting forth and backing, and what do those people
look like? But I think it would probably pick up
off like you know tech bros who are like, oh right,
we should cut social security, we should shrink the federal government.
I'm not sure like how big of a slice of
(15:09):
the electric it is, But again, it would really depend
what Elon's going to have to do if he does
the Third Party is find all these candidates who also
want to cross Trump, and then he will put them
up for different congressional seats. But each candidate will sort
of have to run his or her own race and
have his or her own policy positions, which I guess
(15:30):
Elon would have to support, And so you know, I
think each of those candidates would appeal to probably different people.
Speaker 2 (15:36):
Yeah, now, Max, when we were talking about what this
party stands for, down on very very much against debt
and deficits. That, by the way, is also the origin
story of Doge. What else in his eeks is in
such do we know that this party will stand for?
Speaker 5 (15:52):
It's like a combination of Elon's interests and sort of
techno Silicon Valley right wing is and I'm piecing this
together from a bunch of tweets, but Elon has indicated
that modernizing the military with AI and robotics.
Speaker 3 (16:08):
Pro tech, pro crypto, pro natalist.
Speaker 5 (16:11):
It's like a bunch of essentially you know, internet guy ideas.
But again, like I don't know how Big Musk's bases, Like,
it's not that many people. It's enough people to build
a very successful car company. I'm not sure it's enough
people to build a successful political movement, you know, watching
this so I covered Peter Teal's donations in the twenty
(16:35):
twenty cycle, and he, you know, Teal spent all the time.
I had, I don't know, more than fifty million dollars.
Speaker 3 (16:42):
To get too.
Speaker 5 (16:44):
Essentially two Republican Senate candidates who are sort of far
right candidates to win their primaries.
Speaker 3 (16:50):
And it was it was pretty successful. Both JD.
Speaker 5 (16:53):
Vans and Blake Masters managed to win their primaries, and
one of those two guys, JD. Vans, won a Senate
election that costs fifty million dollars. And the reason it
worked primarily was not the money, but the fact that
Donald Trump endorsed both of those guys, and in those elections,
the big thing as big as the money was. It
was trying to get Trump to endorse those guys, and
(17:14):
it just kind of shows you that, like on the right,
it's pretty hard to run a successful election and not
get smushed if you're on the wrong side of Trump.
Speaker 1 (17:24):
To me, Elon sort of putting together this third party,
I'm like, who does that appeal to, apart from David Sachs,
who like maybe would go along with him.
Speaker 3 (17:32):
I don't know, Nancy, I don't know. David sax is
a pretty good job right now. He may stick with it,
which is which is he's the President's AI advisor. He's
in proximity to power.
Speaker 1 (17:43):
Right So if he goes with Elon, which I could
sort of see him being one of the few people
who does, he will lose that job because the Trump
people are all about revenge and leverage and they will
lace out anybody who goes along with this Elon idea.
Speaker 2 (17:57):
Nancy, on your point about how Trump has a way
actually of making up with quite a few people, Does
he have a sense of gratitude towards Musk and the
money in the ground game in twenty twenty four, and
is Donald Trump in the White House right now? If
not for Elon Musk.
Speaker 1 (18:17):
So I haven't talked to Trump about this specifically, so
I have no idea exactly what he's thinking. I mean,
I think, you know, the people around Trump and sort
of the Trump world at large, you know, I think
they're grateful for Elon's money. I think they think Elon's
a little weird. I think Elon made a bunch of
people in the White House mad or annoyed them. But
(18:38):
I also think they think they won also because of
Trump and like the political figure that he is, and
and the team's of sort of political savviness. I don't
think that they give all the credit to Elon. I
think they would be like offended by that suggestion.
Speaker 2 (18:52):
Not all the credit. But did he perhaps tip the balance?
Speaker 1 (18:56):
I guess would be I don't think they would say
he tipped the balance. I think that they would say
things like Trump getting indicted, which like supercharged the bas's
sense of grievance and like made really people coalesce around him,
was a key moment, you know, the assassination attempt, Biden
just being such a bad candidate. I think that there
were a bunch of things Musk helped with some money
(19:16):
in some key primary states. But I don't think that
they would say they owe the election to him, and
I think that he has created a lot of headaches
for them since then. I will also just say, like broadly,
the vibe in the White House now and in Trump
world is like they feel like they're winning. Their ecstatic
you know, they feel like they passed this big tax bill.
(19:36):
You know, Trump is like riding high. Staff is riding high,
and Elon, meanwhile, is just kind of annoying them. And
so that is the kind of the context in which
all of this is happening.
Speaker 2 (19:49):
Okay, So Naty, I'm going to ask you again now
about mam moot and whether you indeed subscribe to the
Max Chaffkin theory. Do you believe in memot? Yeah?
Speaker 1 (19:59):
I think people miss this about Trump. One is that
he is a very hospitable person and like is actually
more charming in person than people think. And the second
is is that he he will like accept people's apology
or forgive people. So I feel like, yeah, Elon's not
in the wilderness like they could make up, you know
today without an issue.
Speaker 5 (20:19):
Listen, Trump hasn't even given Muscow a diminutive nickname yet
and until that happens like, I don't even think this
is a full true feud.
Speaker 2 (20:27):
Final question for the two of you. In November twenty
twenty six, does the America Party take at least one
one seat in either the chambers of Congress? Nancy Cook, Nope,
Max Chefkin No.
Speaker 3 (20:44):
My answer is no. But I think that Elon Musk
will successfully back one House candidate, not necessarily on an
America Party line.
Speaker 1 (20:53):
Gotcha, I could see that. I agree with Max.
Speaker 2 (20:57):
Nancy come back and join us again soon anytime.
Speaker 1 (20:59):
Thanks for having me.
Speaker 2 (21:06):
So. Max and I are now joined by Esha Day,
a stocks reporter here at Bloomberg. Thank you for having me, Esha.
In the wake of the launch of the Great America
Party on Saturday, the stocks sank seven percent yesterday, which,
as you've often told us, Escha, by Tesla's standard, it's
not an enormous move yet seven percent, you know, seven
(21:28):
percent bounce back a little bit today, But the mood
out there seems pretty glum. That angst that among the
bulls that we've noted in recent months seems to keep
building and building. Tell us about what you're reading in
notes from analysts. What kind of you know, what you're
hearing in conversations you're having what is Esha day seeing.
Speaker 4 (21:48):
Sure, I think the mood I would call it one
of extreme caution at this point. So most of the
people that I'm speaking to, and mind you, these are
mostly TESLA investors or I would say bullish and bearish
analyst as well, but essentially everybody's kind of keeping their
fingers crossed and really hoping that this will just kind
of blow over.
Speaker 2 (22:07):
You're just hoping it's going to go away.
Speaker 5 (22:09):
You hear what you hear what Ash's saying, right, She's
talking about Memoot, Musk and Trump that this will just
knock over. He's not going to do this. They're gonna
make up. That's the trade.
Speaker 2 (22:20):
Okay, So they're hoping for Memoot, but at the same
time they're not thrilled, right, I mean, I think among
those expressing concern at a louder and louder you know level,
is Dan ives How do you refer to.
Speaker 3 (22:38):
Dan Ives man the QAnon shaman of right?
Speaker 2 (22:43):
I mean, what did he what did he write? Was
it just today? I think it's just today?
Speaker 4 (22:47):
But I mean, this is not the first time that
Dan is coming out and kind of, you know, really
pushing back on this what he called the soap opera,
and he's saying that soap opera needs to stop. But
his note this morning, he doesn't.
Speaker 2 (22:59):
He's not enjoying, no, clearly not, which.
Speaker 4 (23:02):
Is which is unusual for Dan, I would say. So
he's essentially saying that the company is now at a
tipping point, I mean, big words. His point is a
Tesla board. This is the time for Tesla board to
really step in and make some changes and try and
rain in Musk and his antics somewhat. And he believes
(23:23):
that this is the time to do it. I mean
the note is pretty forceful. As Max said, I would
call Dan an uber bull. His price target on the
Tesla stock is the highest on what Street. It's five
hundred dollars.
Speaker 2 (23:37):
What is the stock at right now?
Speaker 4 (23:39):
I think it's around two hundred dollars, yes, yeah, and
it's been the stock has been hovering around that level
despite some fairly large ish moves for about a month
or so now, so, yeah, it's three hundred dollars. He
has a five hundred dollars price stylege.
Speaker 2 (23:55):
So Max, the board, mister Ive says, is going to
step in. I mean he's gonna him to heal.
Speaker 3 (24:01):
You read dan Ives note, and as Iha says, you can.
Speaker 5 (24:04):
Sort of see why it's a problem because because dan
Ives his big thing after the election was that this
was great news for Tesla because Trump, the most powerful
man in the world, is suddenly aligned with the CEO
of Tesla. You know, Trump is going to basically sort
of use his political force to essentially legalize autonomous cars
all of a sudden.
Speaker 3 (24:25):
That's going to ease the path for Tesla's robotaxis. That
was the thesis. Now as that thesis is falling apart, obviously.
Speaker 5 (24:31):
That that's going to create problems, and that's why you
see dan Ives wanting to find finding move, find some
way to avoid.
Speaker 3 (24:39):
A protracted feud.
Speaker 5 (24:41):
However, when you read this note that Ash's talking about
this morning, you sort of see why it's going to
be pretty hard for the board to do any of
the stuff that dan Ives says, because there's no real stick.
Dan Ives doesn't propose threatening to fire Elon because that
is pretty much unthinkable to the Uber. Part of ives
thesis is that Elon Musk creates a lot of the
(25:02):
value for the company. So his solution is essentially the
other version of this, which is to just pay him
a lot of money.
Speaker 3 (25:09):
So the way wait, wait, so really.
Speaker 2 (25:12):
The proposal is to encourage bad behavior.
Speaker 3 (25:14):
The proposals where there's a fork in the road. Musk
is out of control and.
Speaker 5 (25:18):
To fix this, essentially, he wants the Tesla board to
write him a big check. And not only one big check,
because the plan is, if you read this note, is
to give Musk a new pay package that will bump
his equity up to twenty five percent. This is the
idea that if if Musk owned a little bit more
of Tesla, maybe he would be incentivized to spend some
(25:38):
more time there. He also wants for the board to
consider writing a second check, which is to buy Xai,
which of course would be another mega payout for Elon Musk.
And remember Xai is this company that Elon sort of
started in his spare time, recruited a bunch of ex
Tesla engineers. In certain ways, it seems kind of competitive
to Tesla. So the solution is to Musk and line
(26:01):
essentially by aligning the incentives. Another way to say that
would be to give him a bunch of more money.
Speaker 2 (26:07):
Right, so tie him closer to the company, you punish him,
you punish him Max by throwing bigger checks at him.
I mean, I may you know it drives. I mean,
but here's the thing. If your musk, Esha, and your
net worth is what roughly, it obviously goes.
Speaker 4 (26:24):
Up and down a lot. But right now it's around
three hundred and forty five billion.
Speaker 2 (26:28):
Dollars, all right, I mean, is an extra four seven
eight ten billion? I mean, does it matter? I mean,
I guess it would only matter if it helps you
fund the America Party. But part of the whole thesis
is I did iways want to pry you away from
that god forsaken idea. So I don't know. I mean
(26:48):
to Max's point, though, Esha, about how much Elon is
Tesla and Tesla is Elon. You had somebody quoted in
his story recently saying that fully ninety five percent of
the value of Tesla, of the market cap, which is
some nine hundred and sixty billion dollars, ninety five percent
(27:09):
is not derived from current operations, but from anticipation of
what is to come, new business lines, new revenue streams.
I mean, it's a staggering number. I think for most companies,
the value that the CEO or the value of what
is to come down the line and things that we
can't quite even see yet is going to be far,
(27:31):
far smaller than that. This is the cult of Musk
and the genius of Musk, as dan Ives is saying,
you may be furious with him and disappointed, but you're
you're stuck with him. Absolutely.
Speaker 4 (27:45):
Yes, what dan Ives is saying, and the really strict
measures that he's putting out, they really speak to this
kind of oh, you know, push and pull that Tesla
investors are feeling right now, like they are furious. They
do think it's a it's a huge distraction. You know,
this is they're powerless though they're powerless because I mean
they have put that power in that man in some
(28:06):
ways as well.
Speaker 2 (28:07):
So powerless that I've says, give him more money, Look,
I give him a bigger cat. I think.
Speaker 3 (28:12):
Honestly, there's a sense to it. I mean, it does.
Speaker 5 (28:16):
It does seem like, as you say, David, incentivizing bad behavior.
Although it's hard to imagine Musk responding well. Everything we
know about Elon Musk, it's hard to imagine him responding
well to an ultimatum. You worry, you give him an
ultimatum he might do something even more rat We've seen
that over and over again, and that is you know,
in a weird way, right, It's what gives him so
(28:39):
much power, is that is that he is a little
bit of erratic. There is this kind of wild card factor. Again,
it's a little it's a little bit trumpy.
Speaker 2 (28:46):
It is a little bit trumpy. By the way, Esha
I will note that since Tesla joined the S and
P five hundred at the end of twenty twenty, the
stock is wildly underperformed the S and P five hundreds,
up all of twenty six percent. I mean for that
period basically what you could get from owning treasury bills.
(29:09):
The S and P is up seventy seven percent in
that time to on a total return basis, and the
Nasdaq is up eighty three percent over that time. Granted,
this strips out the immediately preceding period, which was the pandemic,
the crazy pandemic rally that sent Tesla soaring. But yeah,
you're not talking about a four and a half year
period where the stocks treading water.
Speaker 4 (29:30):
Yep, that's true. And why is that? One part of
it is definitely that there was it was preceded by
that seven hundred and fifty percent rally in twenty twenty.
Speaker 2 (29:40):
Say that number again, was it seven hundred and fifty
bigger than I remember? How do we miss that?
Speaker 5 (29:44):
Max?
Speaker 4 (29:46):
But some of it is also just this like constant
noise that has surrounded the stock since then, the ev
business has kind of stabilized, so there's not a lot
of surprise in there.
Speaker 2 (29:57):
Then there was a stabilized it's kind of but then.
Speaker 4 (30:01):
Yes, and then it started kind of slowing down, So
that was one disappointment. You know, the core business isn't
really growing kind of leaps and bounds as it was
supposed to. Then there was the noise around Twitter, him
buying Twitter, and that entire distraction around it, him having
to sell stock. I mean, and when I talked to
investors right now, that is one instance that keeps coming
(30:23):
up a lot, not so much his other controversies, of
which there have been many, but that the Twitter controversy
or you know, buying Twitter, and the distraction related to
Twitter which is now X and now his political foray.
These are the two big.
Speaker 2 (30:38):
So the soap opera that I've refers to, I mean,
there is really several soap operas that seem.
Speaker 4 (30:45):
Refers to the political soap opera, which I think has
just gone completely out of control, especially after Musk and
Trump had their fallout. So, you know, I mean, it
was always kind of a wild bed, right, like the
fact that these two men are really close and just
the proximity to the president will give Tesla some sort
(31:07):
of a wild edge over competitors. It was always a lot.
Speaker 2 (31:12):
There was a lot of steam. It was a lot
of smoke. Max, being the the ace reporter he is,
he sniffed that out in November, to which I had said, well,
if that is true, if it's all smoke and mirrors,
you know, just just collect the gains and sell the stock.
And I don't know, And in hindsight.
Speaker 5 (31:31):
Yeah, that would have been Would we should charge.
Speaker 3 (31:34):
More for this podcast?
Speaker 2 (31:34):
Yes? All right, Esha, thanks for joining Max, Thanks as always,
Thank you, Thanks David. This episode was edited by Anamas
Racus and produced by Stacy Wong, with help from Rachel Lewis,
(31:55):
Chrisky Wait, Maple's Handles Engineering, and Dave Percelfact checks. Our
supervising producer is Magnus Henrikson. The elon Ingk theme is
written and performed by Taka Yasuzawa and Alex Sugiira. Brendan
Francis Newnham is our executive producer, and Sage Bauman is
the head of Bloomberg Podcasts. A big thanks as always
(32:15):
to our supporters Joel Weber and Brad Stone. I'm David Papadoppo.
If you have a minute, rate and review our show,
it'll help other listeners find us. See you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star. A
star is born Elon.
Speaker 3 (00:13):
Juson Kennedy.
Speaker 2 (00:14):
He is the Thomas Edison plus plus plus.
Speaker 4 (00:17):
Of our age.
Speaker 2 (00:18):
Holy, his whole life is from a position of insecurity.
I feel for the guy.
Speaker 4 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty today, I'll pay
in four post.
Speaker 2 (00:30):
We are meant for great things in the United States
of America, and Elon reminds.
Speaker 3 (00:34):
Us of that.
Speaker 2 (00:35):
I'm very disappointed in Elon. I've helped Elon a lot.
Welcome to Elon, a Bloomberg's weekly podcast about Elon Musk.
It's Tuesday, July eighth. I'm your host, David Papadopolos. Okay, America,
are you ready for the America Party? Elon Musk appareently
(01:00):
thinks you are launching the third Party late last week
and making bold declarations about upending the US political order
and what amounts to a dramatic escalation of his feud
with President Donald Trump. So we're going back to DC
to bring in another one of our star political reporters,
Nancy Cook, to get into the nitty gritty with me
and Elon inks stalwart Max Chafkin. Hello to you both.
Speaker 1 (01:24):
Hey, David, Hi, David, Hi Max. Thanks for having me.
Speaker 2 (01:28):
Yeah, Nancy, you know, thanks for coming back. It's been
a while, it's been too long. Now listen. If Elon's
politics are the yin well, then Tesla and its wobbly
share price is the yang. By the way, I actually
have no idea if this actually makes any sense, but
I'm gonna go with it. In with Max, you sort
of yeah, sure, well it's close enough, yeah, good enough
for rock and roll. And we'll bring in Esha Day
(01:50):
to talk about the growing ang swirling in the market
as Musk wades right back into politics. Okay, now, Nancy,
so with your colleague there in Washington, Josh Green, we
had previewed this last week, but then the big beautiful
bill got final approval in Congress and signed into law
by Trump on the fourth of July, and Musk then
(02:11):
announces the formation of the America Party the very next day.
So tell us here, what do we need to know
about the America Party And what as you see it,
do the prospects look like for this thing?
Speaker 1 (02:25):
Well, so Elon Musk was not happy with the tax bill,
which I think that you guys have talked about extensively,
and also hasn't been happy with the tariffs, and so
he has broken with Trump and his advisors on some
very key policy areas and then has threatened to start
this third political party on X. And so far the
(02:46):
idea just lives on X.
Speaker 2 (02:47):
And you use the term threat. Is that really all
it's still is at this point a threat?
Speaker 1 (02:52):
Yes, that's all it is. I mean, creating a third
political party is a huge heavy lift, and not just
heavy lift initially, it's a sustained heavy lift.
Speaker 2 (03:04):
What are some of the mechanics of this heavy lifting?
Speaker 1 (03:07):
Sure, so it would require a ton of money. He
has that, but you know, does he want to you know,
invest that money for the long term to make an
effect in both the midterms and the twenty twenty eight
presidential election or does he need to focus on his companies?
So money is one? Two is his attention span?
Speaker 2 (03:25):
You know?
Speaker 1 (03:25):
Sure he is threatening Trump and Trump officials about this
on X. But to create a third political party, you
have to register with a federal election commission. You have
to go to each individual state and make sure that
your party is registered in each political state. Like you know,
there are some political consultants, I'm sure in DC who
(03:46):
are salivating at the idea of taking Elon's money and
doing this, But to actually do it, it's so much
effort in all these states to do it, and there's
so much paperwork, and so, you know, in addition to
the money, question is does he have sort of this
sustained attention span to do this. And then the other
thing is that we have never really seen a successful
(04:09):
third party. You know, Ross Perrot has tried it in
the past, Andrew Yang tried it, Eddie Roosevelt, yeah, exactly,
No Labels has tried it, but we've never seen like Wallace. Sure,
but we've never seen like a really successful bid for
a third party. This is sort of a threat that
he's making.
Speaker 2 (04:28):
That is true. But Teddy Roosevelt and the Bull Moose Party,
I believe, and Ross Perro and whatever the hell the
name of his party was, they did very much affect
those elections.
Speaker 1 (04:43):
Sure, there is no question that it could affect the election,
and it could you know, sort of siphon off votes
for a Prima Democrat or Republican party. Like Americans are
very unhappy with the political system at this point. But
I think it's just like, does he have the attention
span and the money to do it? You know, for
(05:04):
a while, because really the next marker would be the midterms,
the twenty twenty six mid terms, when Republicans could lose
the House. That's sort of what's up for grabs. Then
and then the twenty twenty eight election, the presidential election.
You know, assuming Trump doesn't try to say a third term,
which would require him changing the constitution, but let's not
put it past him. It will be a totally open election.
(05:26):
There will be people running on the Republican side and
people on the Democratic side, and I think it will
be a very crowded field. And so, you know, does
Musk want to put up a candidate for that? You know,
I think that that's a ways off, but you know,
I think that there are certainly these conversations happening.
Speaker 2 (05:42):
Yeah, so Max, this is something that Josh Green also raised,
the attention span issue, the stick to itiveness sort of dubious,
like Nancy is and Joshing General has a very grim
outlook on the future of the America Party. But it's
curious to me that they both raised that question from
afar and I get it at some level because the
(06:03):
guy just bounces around all over the place, and yet
at the same time, it strikes me that you doubt him,
you question him and his stick toitiveness on something that
he starts obsessing about, and you can get burned.
Speaker 3 (06:16):
Right, Yeah, it's true.
Speaker 5 (06:18):
And you know, some of what Musk has said over
the last couple of days has suggested that he's thinking
about this in the same way that he's thinking about
these big bets. He keeps reposting these comments from fans
that say, like.
Speaker 2 (06:31):
They doubted he could start space X and he did.
Speaker 3 (06:34):
You know, so this is like his next act.
Speaker 5 (06:37):
People forget though, that Musk has threatened to start lots
of that he never actually followed such a so he
threatened to start like a news outlet, or he's done
it a few times, so, you know, made various threats
about media. You know, even give you well he did,
You're right, he did by X. But he said he
was starting this thing called Pravda a few years ago
and that never happened. It's not like he never sort
(06:59):
of flakes out on it. In fact, he flakes out
on threats that he makes on X.
Speaker 2 (07:03):
What's just hit rich.
Speaker 3 (07:04):
I don't know.
Speaker 5 (07:05):
Now obviously, the like sort of maximalist version of this,
which is like he finds, like I don't like, you know,
four hundred congressional candidates and goes through the very hard,
very boring, probably humbling work of trying to get these
people on ballots in individual districts. It's this is what
Nancy's talking about. It would take forever, it would be
(07:25):
very expensive. These candidates would also have to raise a
ton of money from outside. It would just be like
a very messy thing, pretty much the opposite of like
flying into Butler for an hour and enjoying the fun
of a shop rally. But I do wonder what if
something in between happens, right, and Musk has already floated
(07:45):
various versions of this, like he could just like fund
a handful of Republican primary challenges, call it the America Party,
like not actually file with the FEC, but just say, like,
you know, that's what this effort is, and just act
like a normal kind of right wing mega donor attempting
essentially to drag you know, the MAGA coalition to the
(08:06):
right and also probably in the direction of subsidies, you know,
for his companies.
Speaker 2 (08:11):
So like the Tea Party is a wing of the
Republican Party, so too with the America Party. That's what
I'm saying now, Nancy, are you familiar with the term
man moot?
Speaker 1 (08:23):
I am not.
Speaker 5 (08:24):
Oh that's our version of taco. It's Musk always makes
up with Trump. So it's this idea, and I feel
like you are even buying into it in this answer.
It's this idea that like.
Speaker 2 (08:35):
Yeah, don't don't tell her what.
Speaker 5 (08:39):
He's talking a big game, but he's not really gonna
follow through, you know, and we kind of saw this.
Speaker 2 (08:46):
He's got a lot more to lose than Trump does.
But I gotta say this, Max, this is my point here.
Man moot's not right now. It's a looking a little rough.
I actually think it's looking a little bit more like twamum,
what is that? Just that's me moood backwards? Right, But
you're still all in on that mood.
Speaker 3 (09:04):
No.
Speaker 5 (09:04):
I mean, I just think that the force pushing Musk
and Trump together remains, and like you see it even
in the way that Trump is attacking Musk, like he
has like insulted Musk a few times, but it doesn't
feel like and maybe Nancy, maybe I'm just you know,
failing to appreciate this. But like it feels like he
hasn't used his like meanest insults yet. He's also focused
(09:27):
on the third party, not as this like hideous affront,
but he's just sort of said, it's impractical, this is
the way the system is. It feels like he's pulling
his punches a little bit and avoiding giving Musk the
full double barreled you know, insult canon that he sometimes
reserves for his enemies.
Speaker 3 (09:44):
It's always been a two party system, and I think
starting a third party just adds to confusion. It really
seems to have been developed for two parties. Third parties have.
Speaker 5 (09:53):
Never worked, so he can have fun with it, but
I think it's ridiculous.
Speaker 1 (09:58):
Well, Trump also just historic, like does get mad at people.
But I would say one interesting thing about him and
he will attack them and he can be vicious, is
there are very few people that he like the Bridges
are totally burned. You know, he was furious with Steve
Bannon when Steve Bannon left the White House during the
first term. Now they talk. You know, Steve Bannon was
at lunch at the White House, you know, a few
(10:20):
days before Trump bomb Durant. Trump is willing to make
up with people, like I think, much more so than
people realize, and so I could see them one hundred
percent making up. I also just want to make the
point that Elon doing this, you know, also runs the
risk of just really alienating Republican voters who are completely
(10:40):
beholden to Trump, and like, if they're going to pick
someone Trump versus Elon, they're going to pick Trump. I mean,
Trump is not just like a political figure or president,
do you know, He's almost like a movement figure in
terms of politics. I mean, people just feel so strongly
about him. His supporters, his detractors also feel strongly that
I just think, you know, Musk would not just have
(11:02):
to take on the mechanics of the third party and
the money and the time and the attention, but also
just take on sort of the cult of Trump's personality.
Speaker 2 (11:16):
You know.
Speaker 5 (11:16):
I've seen Nancy brought up these political consultants like salivating
over the chance to take Elon Musk's money, and I
uctually see some of this slipping out into public. Andrew
Yang has been tweeting at Musk. Mark Cuban has been
tweeting at Musk. These consultants are all talking about how
great an idea a third party is. But most of
these people are talking about a centrist third party, which
(11:36):
is not what Elon Musk is talking about. He's talking
about like a far right political party. Yes, all right,
what is his complaints, Like, what are his policy positions? Well,
his policy position is that we need to drastically cut
the deficit. Essentially, it's not that the Big Beautiful Bill
is bad because it cut Medicaid, which is what the
centrists think and which actually might be a credible position
(12:00):
from which to start trying to build some kind of
political movement. It's that they didn't cut enough. He's called
social Security a Ponzi scheme on the Joe Rogan Show.
He is not in sort of the mainstream of like
what centrist voters think. His views are sort of out there.
They're all over the place, and he's attacking Trump from
the right.
Speaker 2 (12:18):
Okay, So that is a fair point that saying we
got to go harder at social Security and Medicare and
Medicaid is not a centrist view. But Nancy's saying that
the debt is out of control and our deficits are
out of control. That's not far right politics, is it.
Speaker 1 (12:35):
That's just not a view that is in vogue right
now in Washington, I would say broadly. And it's not
something that voters are caring about. And talking about cutting
social security regardless of party is like the third rail
for voters. Like old people want their social security. They
don't want to support some political figure who talks about
cutting it or even changing it. I mean that's why
(12:57):
Doje I think was so unpopular. That's not a winning position.
Speaker 3 (13:01):
Yeah.
Speaker 5 (13:01):
I mean we're seeing like a little mini illustration of
how what a headache doses is going to be both
for the White House but also maybe even more so
for Elon Musk with this tragedy in Texas right like
one of the subplots. And I think we're I don't
think we know yet, but you're starting to see reports
about was Noah the Weather Service essentially understaff? Did that
(13:22):
contribute to not predicting? Like there's just like a lot
of ways in which.
Speaker 2 (13:26):
An understaff because potentially they were gutted by Doge.
Speaker 5 (13:30):
Yeah, And they're just all sorts of these kind of
little things where we're attacking government services that were working well,
created all sorts of liabilities for Musk and then in
turn for.
Speaker 2 (13:44):
And whether or not that actually turns out to be
the case or not. And I'm not sure we know
the answer to that. The narrative politically certainly does not help.
Speaker 5 (13:52):
Yeah, no, no, And it just shows that like beyond
just like going to the DOGE website and seeing the
top line number, you know, one hundred billion or whatever, like,
there aren't a lot of successes that you can point to.
So it's like it's like a lot of political liabilities
and a lot of disruption, kind of in the bad sense,
without necessarily a ton of political upside.
Speaker 2 (14:14):
Dirt parties have never worked in the sense that they've
never won an election, as you were pointing out, Nancy,
but as I was remembering, Teddy Roosevelt did cause believe
William Howard Taff to lose the election way back when.
And I think you can make an argument that Ross
Perrot cost George Bush the nineteen ninety two election. If
the America Party picks off voters, who is it picking off,
(14:41):
even if it's some at the margin, is it twenty
something year old guys, And where is it pulling people from? Well,
what's a.
Speaker 1 (14:49):
Little early to say, because you would often also have
to see like who are the candidates that this party
is putting forth and backing, and what do those people
look like? But I think it would probably pick up
off like you know tech bros who are like, oh right,
we should cut social security, we should shrink the federal government.
I'm not sure like how big of a slice of
(15:09):
the electric it is, But again, it would really depend
what Elon's going to have to do if he does
the Third Party is find all these candidates who also
want to cross Trump, and then he will put them
up for different congressional seats. But each candidate will sort
of have to run his or her own race and
have his or her own policy positions, which I guess
(15:30):
Elon would have to support, And so you know, I
think each of those candidates would appeal to probably different people.
Speaker 2 (15:36):
Yeah, now, Max, when we were talking about what this
party stands for, down on very very much against debt
and deficits. That, by the way, is also the origin
story of Doge. What else in his eeks is in
such do we know that this party will stand for?
Speaker 5 (15:52):
It's like a combination of Elon's interests and sort of
techno Silicon Valley right wing is and I'm piecing this
together from a bunch of tweets, but Elon has indicated
that modernizing the military with AI and robotics.
Speaker 3 (16:08):
Pro tech, pro crypto, pro natalist.
Speaker 5 (16:11):
It's like a bunch of essentially you know, internet guy ideas.
But again, like I don't know how Big Musk's bases, Like,
it's not that many people. It's enough people to build
a very successful car company. I'm not sure it's enough
people to build a successful political movement, you know, watching
this so I covered Peter Teal's donations in the twenty
(16:35):
twenty cycle, and he, you know, Teal spent all the time.
I had, I don't know, more than fifty million dollars.
Speaker 3 (16:42):
To get too.
Speaker 5 (16:44):
Essentially two Republican Senate candidates who are sort of far
right candidates to win their primaries.
Speaker 3 (16:50):
And it was it was pretty successful. Both JD.
Speaker 5 (16:53):
Vans and Blake Masters managed to win their primaries, and
one of those two guys, JD. Vans, won a Senate
election that costs fifty million dollars. And the reason it
worked primarily was not the money, but the fact that
Donald Trump endorsed both of those guys, and in those elections,
the big thing as big as the money was. It
was trying to get Trump to endorse those guys, and
(17:14):
it just kind of shows you that, like on the right,
it's pretty hard to run a successful election and not
get smushed if you're on the wrong side of Trump.
Speaker 1 (17:24):
To me, Elon sort of putting together this third party,
I'm like, who does that appeal to, apart from David Sachs,
who like maybe would go along with him.
Speaker 3 (17:32):
I don't know, Nancy, I don't know. David sax is
a pretty good job right now. He may stick with it,
which is which is he's the President's AI advisor. He's
in proximity to power.
Speaker 1 (17:43):
Right So if he goes with Elon, which I could
sort of see him being one of the few people
who does, he will lose that job because the Trump
people are all about revenge and leverage and they will
lace out anybody who goes along with this Elon idea.
Speaker 2 (17:57):
Nancy, on your point about how Trump has a way
actually of making up with quite a few people, Does
he have a sense of gratitude towards Musk and the
money in the ground game in twenty twenty four, and
is Donald Trump in the White House right now? If
not for Elon Musk.
Speaker 1 (18:17):
So I haven't talked to Trump about this specifically, so
I have no idea exactly what he's thinking. I mean,
I think, you know, the people around Trump and sort
of the Trump world at large, you know, I think
they're grateful for Elon's money. I think they think Elon's
a little weird. I think Elon made a bunch of
people in the White House mad or annoyed them. But
(18:38):
I also think they think they won also because of
Trump and like the political figure that he is, and
and the team's of sort of political savviness. I don't
think that they give all the credit to Elon. I
think they would be like offended by that suggestion.
Speaker 2 (18:52):
Not all the credit. But did he perhaps tip the balance?
Speaker 1 (18:56):
I guess would be I don't think they would say
he tipped the balance. I think that they would say
things like Trump getting indicted, which like supercharged the bas's
sense of grievance and like made really people coalesce around him,
was a key moment, you know, the assassination attempt, Biden
just being such a bad candidate. I think that there
were a bunch of things Musk helped with some money
(19:16):
in some key primary states. But I don't think that
they would say they owe the election to him, and
I think that he has created a lot of headaches
for them since then. I will also just say, like broadly,
the vibe in the White House now and in Trump
world is like they feel like they're winning. Their ecstatic
you know, they feel like they passed this big tax bill.
(19:36):
You know, Trump is like riding high. Staff is riding high,
and Elon, meanwhile, is just kind of annoying them. And
so that is the kind of the context in which
all of this is happening.
Speaker 2 (19:49):
Okay, So Naty, I'm going to ask you again now
about mam moot and whether you indeed subscribe to the
Max Chaffkin theory. Do you believe in memot? Yeah?
Speaker 1 (19:59):
I think people miss this about Trump. One is that
he is a very hospitable person and like is actually
more charming in person than people think. And the second
is is that he he will like accept people's apology
or forgive people. So I feel like, yeah, Elon's not
in the wilderness like they could make up, you know
today without an issue.
Speaker 5 (20:19):
Listen, Trump hasn't even given Muscow a diminutive nickname yet
and until that happens like, I don't even think this
is a full true feud.
Speaker 2 (20:27):
Final question for the two of you. In November twenty
twenty six, does the America Party take at least one
one seat in either the chambers of Congress? Nancy Cook, Nope,
Max Chefkin No.
Speaker 3 (20:44):
My answer is no. But I think that Elon Musk
will successfully back one House candidate, not necessarily on an
America Party line.
Speaker 1 (20:53):
Gotcha, I could see that. I agree with Max.
Speaker 2 (20:57):
Nancy come back and join us again soon anytime.
Speaker 1 (20:59):
Thanks for having me.
Speaker 2 (21:06):
So. Max and I are now joined by Esha Day,
a stocks reporter here at Bloomberg. Thank you for having me, Esha.
In the wake of the launch of the Great America
Party on Saturday, the stocks sank seven percent yesterday, which,
as you've often told us, Escha, by Tesla's standard, it's
not an enormous move yet seven percent, you know, seven
(21:28):
percent bounce back a little bit today, But the mood
out there seems pretty glum. That angst that among the
bulls that we've noted in recent months seems to keep
building and building. Tell us about what you're reading in
notes from analysts. What kind of you know, what you're
hearing in conversations you're having what is Esha day seeing.
Speaker 4 (21:48):
Sure, I think the mood I would call it one
of extreme caution at this point. So most of the
people that I'm speaking to, and mind you, these are
mostly TESLA investors or I would say bullish and bearish
analyst as well, but essentially everybody's kind of keeping their
fingers crossed and really hoping that this will just kind
of blow over.
Speaker 2 (22:07):
You're just hoping it's going to go away.
Speaker 5 (22:09):
You hear what you hear what Ash's saying, right, She's
talking about Memoot, Musk and Trump that this will just
knock over. He's not going to do this. They're gonna
make up. That's the trade.
Speaker 2 (22:20):
Okay, So they're hoping for Memoot, but at the same
time they're not thrilled, right, I mean, I think among
those expressing concern at a louder and louder you know level,
is Dan ives How do you refer to.
Speaker 3 (22:38):
Dan Ives man the QAnon shaman of right?
Speaker 2 (22:43):
I mean, what did he what did he write? Was
it just today? I think it's just today?
Speaker 4 (22:47):
But I mean, this is not the first time that
Dan is coming out and kind of, you know, really
pushing back on this what he called the soap opera,
and he's saying that soap opera needs to stop. But
his note this morning, he doesn't.
Speaker 2 (22:59):
He's not enjoying, no, clearly not, which.
Speaker 4 (23:02):
Is which is unusual for Dan, I would say. So
he's essentially saying that the company is now at a
tipping point, I mean, big words. His point is a
Tesla board. This is the time for Tesla board to
really step in and make some changes and try and
rain in Musk and his antics somewhat. And he believes
(23:23):
that this is the time to do it. I mean
the note is pretty forceful. As Max said, I would
call Dan an uber bull. His price target on the
Tesla stock is the highest on what Street. It's five
hundred dollars.
Speaker 2 (23:37):
What is the stock at right now?
Speaker 4 (23:39):
I think it's around two hundred dollars, yes, yeah, and
it's been the stock has been hovering around that level
despite some fairly large ish moves for about a month
or so now, so, yeah, it's three hundred dollars. He
has a five hundred dollars price stylege.
Speaker 2 (23:55):
So Max, the board, mister Ive says, is going to
step in. I mean he's gonna him to heal.
Speaker 3 (24:01):
You read dan Ives note, and as Iha says, you can.
Speaker 5 (24:04):
Sort of see why it's a problem because because dan
Ives his big thing after the election was that this
was great news for Tesla because Trump, the most powerful
man in the world, is suddenly aligned with the CEO
of Tesla. You know, Trump is going to basically sort
of use his political force to essentially legalize autonomous cars
all of a sudden.
Speaker 3 (24:25):
That's going to ease the path for Tesla's robotaxis. That
was the thesis. Now as that thesis is falling apart, obviously.
Speaker 5 (24:31):
That that's going to create problems, and that's why you
see dan Ives wanting to find finding move, find some
way to avoid.
Speaker 3 (24:39):
A protracted feud.
Speaker 5 (24:41):
However, when you read this note that Ash's talking about
this morning, you sort of see why it's going to
be pretty hard for the board to do any of
the stuff that dan Ives says, because there's no real stick.
Dan Ives doesn't propose threatening to fire Elon because that
is pretty much unthinkable to the Uber. Part of ives
thesis is that Elon Musk creates a lot of the
(25:02):
value for the company. So his solution is essentially the
other version of this, which is to just pay him
a lot of money.
Speaker 3 (25:09):
So the way wait, wait, so really.
Speaker 2 (25:12):
The proposal is to encourage bad behavior.
Speaker 3 (25:14):
The proposals where there's a fork in the road. Musk
is out of control and.
Speaker 5 (25:18):
To fix this, essentially, he wants the Tesla board to
write him a big check. And not only one big check,
because the plan is, if you read this note, is
to give Musk a new pay package that will bump
his equity up to twenty five percent. This is the
idea that if if Musk owned a little bit more
of Tesla, maybe he would be incentivized to spend some
(25:38):
more time there. He also wants for the board to
consider writing a second check, which is to buy Xai,
which of course would be another mega payout for Elon Musk.
And remember Xai is this company that Elon sort of
started in his spare time, recruited a bunch of ex
Tesla engineers. In certain ways, it seems kind of competitive
to Tesla. So the solution is to Musk and line
(26:01):
essentially by aligning the incentives. Another way to say that
would be to give him a bunch of more money.
Speaker 2 (26:07):
Right, so tie him closer to the company, you punish him,
you punish him Max by throwing bigger checks at him.
I mean, I may you know it drives. I mean,
but here's the thing. If your musk, Esha, and your
net worth is what roughly, it obviously goes.
Speaker 4 (26:24):
Up and down a lot. But right now it's around
three hundred and forty five billion.
Speaker 2 (26:28):
Dollars, all right, I mean, is an extra four seven
eight ten billion? I mean, does it matter? I mean,
I guess it would only matter if it helps you
fund the America Party. But part of the whole thesis
is I did iways want to pry you away from
that god forsaken idea. So I don't know. I mean
(26:48):
to Max's point, though, Esha, about how much Elon is
Tesla and Tesla is Elon. You had somebody quoted in
his story recently saying that fully ninety five percent of
the value of Tesla, of the market cap, which is
some nine hundred and sixty billion dollars, ninety five percent
(27:09):
is not derived from current operations, but from anticipation of
what is to come, new business lines, new revenue streams.
I mean, it's a staggering number. I think for most companies,
the value that the CEO or the value of what
is to come down the line and things that we
can't quite even see yet is going to be far,
(27:31):
far smaller than that. This is the cult of Musk
and the genius of Musk, as dan Ives is saying,
you may be furious with him and disappointed, but you're
you're stuck with him. Absolutely.
Speaker 4 (27:45):
Yes, what dan Ives is saying, and the really strict
measures that he's putting out, they really speak to this
kind of oh, you know, push and pull that Tesla
investors are feeling right now, like they are furious. They
do think it's a it's a huge distraction. You know,
this is they're powerless though they're powerless because I mean
they have put that power in that man in some
(28:06):
ways as well.
Speaker 2 (28:07):
So powerless that I've says, give him more money, Look,
I give him a bigger cat. I think.
Speaker 3 (28:12):
Honestly, there's a sense to it. I mean, it does.
Speaker 5 (28:16):
It does seem like, as you say, David, incentivizing bad behavior.
Although it's hard to imagine Musk responding well. Everything we
know about Elon Musk, it's hard to imagine him responding
well to an ultimatum. You worry, you give him an
ultimatum he might do something even more rat We've seen
that over and over again, and that is you know,
in a weird way, right, It's what gives him so
(28:39):
much power, is that is that he is a little
bit of erratic. There is this kind of wild card factor. Again,
it's a little it's a little bit trumpy.
Speaker 2 (28:46):
It is a little bit trumpy. By the way, Esha
I will note that since Tesla joined the S and
P five hundred at the end of twenty twenty, the
stock is wildly underperformed the S and P five hundreds,
up all of twenty six percent. I mean for that
period basically what you could get from owning treasury bills.
(29:09):
The S and P is up seventy seven percent in
that time to on a total return basis, and the
Nasdaq is up eighty three percent over that time. Granted,
this strips out the immediately preceding period, which was the pandemic,
the crazy pandemic rally that sent Tesla soaring. But yeah,
you're not talking about a four and a half year
period where the stocks treading water.
Speaker 4 (29:30):
Yep, that's true. And why is that? One part of
it is definitely that there was it was preceded by
that seven hundred and fifty percent rally in twenty twenty.
Speaker 2 (29:40):
Say that number again, was it seven hundred and fifty
bigger than I remember? How do we miss that?
Speaker 5 (29:44):
Max?
Speaker 4 (29:46):
But some of it is also just this like constant
noise that has surrounded the stock since then, the ev
business has kind of stabilized, so there's not a lot
of surprise in there.
Speaker 2 (29:57):
Then there was a stabilized it's kind of but then.
Speaker 4 (30:01):
Yes, and then it started kind of slowing down, So
that was one disappointment. You know, the core business isn't
really growing kind of leaps and bounds as it was
supposed to. Then there was the noise around Twitter, him
buying Twitter, and that entire distraction around it, him having
to sell stock. I mean, and when I talked to
investors right now, that is one instance that keeps coming
(30:23):
up a lot, not so much his other controversies, of
which there have been many, but that the Twitter controversy
or you know, buying Twitter, and the distraction related to
Twitter which is now X and now his political foray.
These are the two big.
Speaker 2 (30:38):
So the soap opera that I've refers to, I mean,
there is really several soap operas that seem.
Speaker 4 (30:45):
Refers to the political soap opera, which I think has
just gone completely out of control, especially after Musk and
Trump had their fallout. So, you know, I mean, it
was always kind of a wild bed, right, like the
fact that these two men are really close and just
the proximity to the president will give Tesla some sort
(31:07):
of a wild edge over competitors. It was always a lot.
Speaker 2 (31:12):
There was a lot of steam. It was a lot
of smoke. Max, being the the ace reporter he is,
he sniffed that out in November, to which I had said, well,
if that is true, if it's all smoke and mirrors,
you know, just just collect the gains and sell the stock.
And I don't know, And in hindsight.
Speaker 5 (31:31):
Yeah, that would have been Would we should charge.
Speaker 3 (31:34):
More for this podcast?
Speaker 2 (31:34):
Yes? All right, Esha, thanks for joining Max, Thanks as always,
Thank you, Thanks David. This episode was edited by Anamas
Racus and produced by Stacy Wong, with help from Rachel Lewis,
(31:55):
Chrisky Wait, Maple's Handles Engineering, and Dave Percelfact checks. Our
supervising producer is Magnus Henrikson. The elon Ingk theme is
written and performed by Taka Yasuzawa and Alex Sugiira. Brendan
Francis Newnham is our executive producer, and Sage Bauman is
the head of Bloomberg Podcasts. A big thanks as always
(32:15):
to our supporters Joel Weber and Brad Stone. I'm David Papadoppo.
If you have a minute, rate and review our show,
it'll help other listeners find us. See you next week.
Host
David Papadopoulos
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