Halls of Shrewd'm / US Policy❤
No. of Recommendations: 5
Musk recently said on X that WEB should invest in Tesla. Comments like this from Musk should be taken seriously. Remember the "Should I buy Twitter" statement. I put this in the same category, kind of an invitation.
In the past whenever anyone has speculated that WEB has or will buy Tesla shares I've always said there was a zero chance of that happening. We all know why: circle of competence, price and hard to predict earnings etc. Add WEB's sometimes mildly critical comments about Musk to the list as well.
But, right now there is a unique opportunity presenting itself: Musk wants out of many of the businesses he's in. Not because they are bad businesses - they're great businesses - but because he has better opportunities to focus his attention and limited resources on.
Musk started X.ai about a year ago. They're currently raising 6B at a 20B valuation. (20B out of nowhere ... nice.) Tesla is investing 10B this year on compute. I think Elon needs another 50 or 100B to fund his ambitions in AGI. (No small-ball here.) He seems very focused on AI/robotics and is cutting his Capex at Tesla to preserve the 26B that's already in the bank. (Musk recently commented on when Netflix spun off their DVD business in favor of streaming. He said to apply that logic to Tesla.) He's also commented that Tesla is "pivoting."
I won't go into whether a hard pivot to AI/robotics is a good idea. What's important is that Musk's open to some kind of transaction for his legacy businesses. Specifically, I think that insurance, stationary energy storage, Supercharger/Megacharger and lithium refining might be on the table. Less appealing would be solar and battery production. I could see hundreds of Billions of dollars deployed into these businesses over the next ten years at good rates of return. Combined, they have excellent products with huge and growing TAMs that are complementary to BRKs current businesses.
On the personal side of things. I think WEB and EM have always admired each other. Bill Gates was an issue but that is behind them.
What would a transaction look like? I have no idea. It needs to solve the capital deployment and growth stagnation issue for WEB and the capital needs and focus issue for EM.
Of course there's more speculation than fact in my comments above. A lot of connecting the dots with no clear picture. Still, stranger things have happened. I'll go back into my Tesla/BTC hibernation now.
No. of Recommendations: 44
Musk recently said on X that WEB should invest in Tesla. Comments like this from Musk should be taken seriously.
Okay, I can stop reading now.
No. of Recommendations: 40
But, right now there is a unique opportunity presenting itself: Musk wants out of many of the businesses he's in. Not because they are bad businesses - they're great businesses
Loathe as I am to clutter the board with this nonsense, my fingers insist on asking “What great businesses?”
The car company is headed down, buffeted by a combination of sharply increased model competition especially in China, increased price competition everywhere, loss of a significant moat in the US (chargers become universal), erratic management, aging lineup, sharply declining margins and more.
The Boring Company, well there’s a reason you don’t hear about it.
SpaceX. Going well. Take away the millions of government subsidies and …
Robotaxis: Don’t exist. Not exactly a Buffett selling point.
Robotics: Doesn’t exist in any commercial sense. See above.
AI: Nobody knows if this will turn into what, and if it does who will profit from it. See above, and above.,
Solar City: Probably the less said the better. Two consecutive years of stunningly bad performance.
I guess you must be talking about “X”, which is going great, except for the advertising part which is off 60-80% depending on whether it’s Musk talking or media watchers. Yeah, that’s it. “X”. There’s a business a CEO who knows nothing about social media can get his teeth into. Although on reflection, I think that’s been tried,
No. of Recommendations: 10
Musk recently commented on when Netflix spun off their DVD business in favor of streaming. He said to apply that logic to Tesla.
Netflix didn't spin off their DVD business, they canceled it. They never sold off an independent DVD business from the rest of streaming Netflix. The final DVDs were recycled or allowed to be kept by the customers.
So what does that say about applying that logic to Tesla?
No. of Recommendations: 11
So what does that say about applying that logic to Tesla?
They fired pretty much everybody in the charging network division. Would that be along the same lines?
Jim
No. of Recommendations: 2
Lol, We would never touch anything that Elon touched.
What’s that saying, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently?”
Joe
