Transcription
Tesla stock has fallen from $420 at the beginning of July to now $38, and Yarn's call didn't help. So, what should we expect next? Does a rebound in AI mean a rebound in Tesla? Is there a merger overhang? Do the recent sightings of cyber cabs with no one inside driving around public roads in Austin change anything?
We've got the bulls here with us today. We've got the rational, also known as Mr. Incredible, the executive Jeff Lutz. We've got the power bowl, the queen, Tesla boomer mama Alexander Mertz. And today, we have the pioneerable, an economist and stock guru Joe Bacti. Welcome, everyone.
>> Hi Herbert.
>> Hi Robert.
>> Hi Albert.
All right, we have to talk about Tesla's stock. It has crashed significantly. Uh, and I think that Joe, your thesis is that it's mostly associated with the AI uh draw down. What's your thinking about what happened to Tesla's stock?
The company and the product. I don't look at the quarterly stock movement.
>> A very realistic bull questioning certain decisions.
>> The rational bull. They enjoy listening to bears.
>> We're looking for the red flags. You're supposed to react.
Yeah. I always tell everyone, uh, we have a lot of Tesla fans, of course, uh, and a lot of all-in Tesla investors, and sometimes they overfit on Tesla when the stock moves in a certain way. And I always recommend to everyone, take a step back, look at Micron, Nvidia, the AI trade, the Max 7. What did they do? And what we saw with, uh, Tesla at earnings, I was very negative on the earnings going in. I did a show right before and said, I don't like the whole setup. I predicted it's going to go down 2-3%, and then of course, it went down much more. But when you compared it with Google, the parallel earnings, same night Google came out and Google dropped insanely, like 7%. And when you put the beta of Tesla over it, that was like pretty much in lockstep, right? So the crash of Google after earnings, right, with Tesla crash is too paralyzed. And then we see the entire market imploding like in a dramatic way.
What people don't know is that this July was the worst sell-off month in momentum stocks in 30 years. Worse than .com crash and worse than the great financial crash on a monthly basis. Not cumulative over multiple months. That's where the crashes were worse. But on a monthly level, July was the worst month we have kind of ever seen. And so if you feel, if you feel bruised or lost a lot of money, or at least paper losses in the portfolio, it's, you're not the only one. This was the worst month in 30 years. And so, you know, we have to put that into perspective. And when we do that, Tesla going down from 366 to now, whatever, 310, 38 today, it's not that bad if you consider that the worst month that kind of ever happened, when you see stocks like the huge stocks like Google dropping like stones and now recovering. So I think we are a little more like depressed than we should be from a Tesla perspective, uh, in the grand scheme of things, and I don't think Tesla has moved too much out of lock with the market.
So, the actual negativity on Tesla, yes, the earnings call wasn't great. I also got a little more negative on Tesla than I was before, like slightly more negative because it sounded like there's zero pressure on rolling robo taxi out, but they said like, well, it takes time. And I expected all of that, but it sounded just a little tad more less, uh, accelerated than I thought. So, long story short, I think much bigger things have happened than Tesla, especially this week with Leo Paul Ashen Brener and, you know, uh, this whole thing with Ken Griffin and the buyout and his panic, uh, thing on Tuesday about the Fed. This was all a coordinated thing to crash the market, which totally worked. He took over the fund, and you saw exactly the key holdings of the fund, Nebius, Micron, Sanders, going up like insane 30% today. That's not a normal move for trillion-dollar companies, right? So, or for Micron.
>> Two questions to you, Joe, then. One is, does that mean a rebound in AI would mean a rebound in Tesla? And two, the counter to people saying that's opposite of what you're saying is that Tesla's not an AI company yet. It's not being seen as an AI company. And so, for it to fall because of AI, you know, draw down, it's, it's, it's not necessarily because of the AI draw down.
I think Tesla is full on a momentum stock. So in that bucket, Tesla is full on a Mac 7. So on two fronts, it's already connected to AI, and on top of it, we all know it's an AI stock, and a lot of people know that. Maybe not everyone, but a lot of institutions. Ron Baron knows that. So a lot of people who are institutions also know that. So I think Tesla is tied into the AI trade on three sides: it's momentum, it's Max 7, and to some extent, it's recognized as AI. So there's just no way it escapes this whole thing. And that's also true on the upside. I think if AI recovers now, we are going back to wherever we belong, like 360, 400.
>> So, you do see a rebound. All right. And Jeeoff?
Yeah, I mean, I agree with, with most of that. I think Joe did a nice overview. Just a couple of things, though. If you looked at the stocks really bouncing today, meaningfully bouncing, they're the, they're the stocks that had really good earnings, and they had really good earnings reports, and they had really good earnings calls, and they had really good guidance, and they, they went up meaningfully higher. I think Tesla's just back to where it was maybe Monday, close of trade, and maybe parts of Tuesday, uh, the day before. So, I, I think there's a little bit more going on here. If you look at Nvidia and Google, for example, they're, Google's down 5% on the last 30 days. Nvidia's flat in the last 30 days. Tesla's down 25%. So, I, I, and and by the way, on very good product deliveries, but I think the bottom line, the way the market read the Tesla earnings report was, we're going to spend more than free cash flow, and we're not necessarily telling you that we're going to pull those revenues in from that. Even though they could have couched it as potentially the fastest robo taxi rollout in history is what may happen when we look at this ramp a year from now. That's what may well, that's what will likely happen. But they didn't. So when you say you're going to spend more than free cash flow, and by the way, for good reason, we know that Tesla's ROIs are very good, and we think, and I think they're going to have very short returns. You're going to spend more than free cash flow, and then you're not going to, you're not going to really give some acceleration on the robo taxi roll, give you some indication, and even dampen it down. I think the market took that and and and basically, uh, broke the stock for a bit. So for it to unbreak, I, so I, I agree. I think there, it could float up a bit as the AI trade and the rest of tech. By the way, the, the AI trade took down the NASDAQ. NASDAQ went in the, in the correction, 10% down, and, and I agree with Joe in the beta of Tesla. So I think there'll be some movement up, but, but for Tesla to get its groove back, it's, it's got to unbreak itself. There has to be some sort of meaningful announcement relating to robo taxi, relating to are they selling, uh, unused compute? By the way, who, I mean, there's so many different things that that Tesla could be doing. Uh, and then we'll, we'll touch a bit on on merger, but I just want to say the stocks that bounced today are the stocks that had really high quality earnings. Uh, and, and they're, and they're like Micron, Bloom Energy, they're, they're flying today. Nebius, these are companies with great futures, very high quality earnings. The companies that did not have very high quality earnings only meaningfully, um, you know, bounced today. And, uh, not everybody's been down this past month. So, it's, it's been a tough month, uh, for people. I hope everybody is okay. We don't know if this is the end of it. We don't know if there was a break, but it sure looked like there was some amount of capitulation that's occurred of late, and, and, and we'll see how the rest of this plays out.
Yeah, I would like to add that, um, I think the market is very, very nervous because of the capital needs of all this AI development. And today, stocks get appreciated who have already solid cash flow in streams that the market understands and can extrapolate. With Tesla and SpaceX, lots of it is on a project level. As retail investors, we understand it, or we think we understand it. We can model it. We probably don't even need to model it to be comfortable with it. But that's not how Wall Street operates. They want numbers on which they can build. They want to confirm their numbers. So end of last week came out this Goldman report that really shook this market, which was, uh, this projection that in the next round, three years, it was 7 trillion money needs to be raised in one way or another to come up with these data centers and these AI developments that they need. 7 trillion is enormous. I know we're getting used to billions and trillions, but 7 trillion is enormous. We have seen 25 billion, um, loan bond that SpaceX issued. We've seen two others. All three of those, um, were difficult to place, which is something new. Usually, these bond issues, they just get sucked up with investment funds or, uh, if they're well-rated, straight away into pension funds and whatever. This time, it became already more complicated. And the second signal was that on the secondary market, once they start trading, their spread widened. Nobody wanted them at the initial conditions. So that is for me, who has lived in the rating agency world between 1997 and 2007, and then I left, and I'm so happy I left, um, a clear signal of something brewing where you have an enormous need for capital and cash, and where you have a market that is getting skeptical on how they will finance this all, what it will needs in extra spread or extra asset-backed securities. I'm already having stomach cramps if I think about this. You know how this has to be packaged that the money comes forward to it. And this is not only a Tesla problem, but it is also a Tesla and SpaceX problem because they will need money. My projections are that in the next three to five years, Tesla and SpaceX together may need more than, uh, 200 billion. Now, will that be compensated by income? Last quarter, I actually found that the Tesla earnings call not that bad because I expected, and the market expected, a much worse free cash flow number. They expected a negative number of three and a half. I even thought it could have gone to to five. Now, they have compensated the capex spending, which wasn't that huge yet, if we want to get to 25 billion this year, by, um, the operating income from from cars and energy. So objectively looking at the numbers, it wasn't bad at all. Um, I mean, I'm not saying everything was perfect, but in terms of, you know, capital structure, uh, financial stability, you know, I always track that, and I will in two weeks bring out my table again. Um, but I don't find Tesla's financial strength deteriorated yet. The market is super sensitive now to financial strength, and there are some financial juggernauts out there. There are some companies. Look at Apple today. Apple had, uh, less capex spending than last year at the same time. Do I appreciate that? Not at all. You know, I'm not investing in Apple. But that seems to give comfort to investors. While this, we're having all these projects, look at us, this is all going to make millions and trillions, is something that scares the market today. And you, as a retail investor, should ask yourself, do I have to stomach that this is going to be a ride over a couple of quarters or maybe even short years, because this is going to be depending as much on how much is the market giving you in financing capacities than about the project itself. You know, you need to be able to find the money for it, and that is getting harder than it was for many, many years. And it's not only interest rates.
>> Um, regarding finding the money for it, there, I think SpaceX, I, I saw a video from Tasha Keiny of Arc Invest, and she said that robo taxi revenue, if SpaceX buys Tesla, will fund...
>> Correct.
>> ...the requirement for data center. At the same time, did you guys see this? This is pretty impressive. This is, uh, this is a report, a comment from Gavin Baker, a, a well-known VC, after Nvidia's report. Nvidia produced a report. And when he read the report, he said that SpaceX has is going to have 4 gigawatts this year and another four next year, per this report. SpaceX AI, 4 gigawatts of rental leasing this year. Spot price for computers gone up since they signed their Anthropic and Google deals. And so some people are estimating, when you say 4 gigawatts this year, SpaceX AI, that that means that they can lease out $100 billion this year. And if that's the case, that is a, a trillion-dollar market cap. That's what that's what Tesla has right now, over a trillion-dollar market cap because of 100. So then all of a sudden, SpaceX becomes this. So now you've got SpaceX AI, possibly they're going to announce this at the earnings call in August 4th, that they have, I don't know, let's call it $100 billion. I don't know how real that is, of, you know, an AI ARR, which, you know, we know that these are short-term deals, so I don't know if you can count on it. But still, $100 billion, they announce it on August 4th. Then you've got the robo taxi revenue, SpaceX and Tesla combined, seems like the story that can carry the day for the investments required.
That is exactly correct. That is exactly right. If, if, if SpaceX can show more interest for their rental business, um, that materializes immediately in big contracts with names that can afford it, right? It's also always a question who does it. Um, and, um, if, if that is published, that is going to change the mood completely. And we may move on to the merger overhang. It will actually improve the mood for both SpaceX and Tesla because as long as this merger chatter is around, and people may not like us talking about it, but it's not just us talking about it. They're talking about it on CNBC, and they're talking about it in any, in any serious Wall Street office. I mean, I know personally of many, not of one, but of many who are sketching this out now for weeks in very sophisticated models. So if you can now suddenly plug in that number of $100 billion revenues this year, and again, it has to be seen who pays that, and is it 90-day cancellation contracts, and not that changes the whole image in one announcement, in one announcement. That is how fragile our stock price today is. Downwards, as long as there are no good news, because you're actually getting it from all sides, from the market, and from a lackluster earnings call, and from a slow rollout of one announcement on the SpaceX side.
>> Yeah, one of the issues here because we are also working on the modeling, mostly on the actual prediction, how much goes online. So, you know, we are working on that. So I would be a little skeptical about this. And I think that's how the market sees it's like, okay, fine, it's a report. Is it true? That's the question. So this is really the question. Uh, so it's not that easy. It's not that no one has ever thought of it, and now we have a rumor, and now the stock goes up. Everyone knows that's the big question, right? And no, and no one has the exact answer right now outside SpaceX. What exactly is going on? What about Colossus 2? What about Colossus 3? Will we see another gigawatt coming online this year? Will it be two? Will it be three? That would be a big surprise if it's three. And what about next year? Will it like flatten out? Will they run into permitting problems or not? And so, just saying, oh, it's going to be four. I think that's not too helpful because everyone already knows, like, okay, something is going to happen, but the big question is realistically, what is it? And, and so I think that's a non-trivial question. Is it one? Is it two? Is it three? Like, what is it? Because it's about numbers and...
>> When does it come up too?
Exactly. So, are we talking like, this is, this is way not in the realm of theory anymore. It's about concrete modeling. What do we have by October? What do we have by November? When do the contracts come in? That's the all-decisive question. And will it then flatten out? Will it stick to Colossus 2 and 3 realistically? And it also won't help. I think even announcements will not even help that much because everyone will be skeptical. I think it's all about deals. Like if they announce, we have the contract, and this thing is live, that has a huge impact.
Well, I agree with you. It has to be a signed deal, and it has to be like they started paying yesterday. I mean, I'm, but that's what it is. But I, I mean, do we all agree that even that good news is actually still making Tesla shares more attractive than SpaceX?
Well, I would agree because of what we discussed before. It needs to be a merger of equals. I think there is no realistic scenario where where Tesla shareholders are okay with being bought in a less than one-to-one deal. So therefore, it doesn't even matter like they need to be better or equal to one to one. So if SpaceX goes up, yeah, sure, that's good for Tesla too. So I think there's nearly no scenario where it's not good for...
>> If SpaceX announces a hundred billion dollar. Can you imagine this guys? A hundred billion dollar in like several deals like announced like nobody realized. Um, in terms of timing, did you guys see this post?
SpaceXI, the newest, thank you to SE Robinson. And he goes, the newest image, uh, of Colossus 2, macro hard, and macro harder. There are six blocks of mega 128, 720 megabits, blah, blah, blah, blah. He talks about it. He shows this image. Elon replies and says, "To the right is mini hard." That's the first time we heard of this. It's a, it's a facility that he's calling mini hard, which will have the same 220,000 GB300s, by the way, these are the, the newest Nvidia chips with 800 gigs of, I don't know what this is, NICs, as macro harder, but in an improved, much denser configuration. And people are freaking out because when they go, okay, so not only have they, you know, what I'm saying? Like, they they're building this, these huge Colossus one, Colossus 2, macro hard, marker harder, and then the, oh, by the way, there's this mini hard that is already a building that is already going to be got it. It's got as much as the others do. So the building's up.
Anyways, I think it's important for, for SpaceX to just quickly retell the story. I think Gavin Baker, there's nobody that does it better than Gavin Baker in terms of why this is special and why are people paying a premium for compute. And the reason is, there are bottlenecks in the whole chain to bring up, uh, AI and to bring up AI infrastructure. And so you're going to, if you're going to get your infrastructure up, and you're going to get your buy your intelligence faster, these companies are willing to pay a premium for some period of time. And there's nobody in the industry, as noted by Jensen and by many others, that could bring up a, a brownfield site, a bare site into functioning compute faster than Elon and the Space XAI team. And that the market does, I think the market is aware of that. But I think it is fair to say that beyond, uh, announcements, which I think there is kind of an announced, there's kind of a model as Joe said, there's this modeling of like, what next year could look like. But if they come into the ear into this earnings period next week and say, "Look, we're going to go much bigger than that." And oh, by the way, let's retell this story about what we've done this year and why people are coming to us for compute. I think there's something to that. But Tesla, sorry, SpaceX AI, and the way Elon and his company manages this from end to end, from the bare site to coherent compute, is unlike other companies. And we see what's happening with Oracle, with OpenAI, with all these different things out there. People are really stumbling to bring this up and get it going. So there, there is value in this. I think the other thing that would be interesting and valuable is, uh, you know, they've made this progress on the V3 Starlink. Is there, are there, is there a line of reservation holders, major, major hyperscalers that want to get in line for Starship flights and to buy the, um, AI1, the first data center design and actual units from SpaceX? Is there, is there just like, are there capacity reservations on TSMC and Nvidia for the next version of Vera Rubin? Are there capacity reservations now for space-based data centers? I think that would also be meaningful.
Actually, that earnings call Tuesday is going to be something because obviously we have, as retail, Tesla retail, our topics that we're waiting for. The topics on SpaceX are going to be completely different. And there will be as much financial, financial needs, financial situation now as there will be on upcoming contracts, Starship launches, and whatsoever, but also much more technical, right? It's just a complete, completely different set of topics. And I think it's going to be fascinating for us to, to assist to that. Also, who is going to have the lead? Is it Elon? Is it Gwyn? Is there other people, the CFO? It's going to be very interesting. I think, uh, you know, my, my take on this whole thing is, um, I think we are totally not in the world of narratives anymore, and we are just in a hardcore AI market. And I think SpaceX is just fair and square in that market. That's why I would not bet too much on Starship stories or even AI satellite booking stories. Not because I don't believe in them, or not because I don't believe they're very important, but the market will not care. That's what I think. I think we are now in a period where it's just complete hardcore stuff. Look at Micron. I mean, these people have guaranteed $400 billion dollars in earnings coming in, and no one even cares, right? They say, "Well, let's wait until it actually is in the bank account." So, um, what does it mean for SpaceX? I think from an earnings call dynamic here, I expect actually much better calls than Tesla, because Tesla recently was just awful. And it's not just Elon's fault. The whole leadership team at Tesla, they are not masters of these calls. Let me put it lightly. And I think SpaceX is very different because Gwin is, I think, very capable. She will probably be very good. The CFO is very good. So I think it will be a totally different league of earnings call. That's my expectation. Will it help much? I don't know. And I think for me, the situation with SpaceX is tricky because I think one reason the stock is selling off is because there is technical selling pressure, regardless of what happens if you unlock that many shares. And we have seen what that can mean with the crazy Ashen Brener debacle over the last two days. They were selling off Micron like close to, whatever, I don't even know where it went, like five forward earnings, right? Five PE, and no one cares. It broke through 800, broke was close to breaking through 700. That's complete madness. Everyone knew it's madness. There was no rational person who says this is still normal. But no one can do anything because the market pressure was so strong. And with SpaceX, we will see the same problem. If you unlock all these shares, even if everyone says it's stupid, the share, the stock can just drop. And I think people don't have an appetite for that. And so I think SpaceX, two defining moments for SpaceX in this market. The first one is that technical selling pressure that is inevitable, and no one knows how much, how strong it will be punctually, right? And the second thing is this entire Colossus story is not about the story. It is very clear to me, it's very likely we will see major developments this year with major contracts with very major earnings. But I don't think they will get anyone will cut them any slack for any story. It needs to actually happen. And so...
>> The question is when will it happen and how does it relate to the unlocks? I I would rather not have it happen the earnings call and rather see some unlocks and see this stock reacting because if you see some unlocks and then, and then let's say it's September and we haven't heard of Colossus and the stock is at 100 and we have seen how the unboxing being digested. I would become extremely bullish because I think we will get these news, they will be massive, and there will be massive earnings. If it happens at the earnings call, the problem I have is, okay, let's say the stock goes up to 140 or something, which could happen if they announce crazy things. We still don't know what happens when they unlock the shares. So would I buy it? No, I would still wait. So ideally, I want to see what the unlocks do while this is not being announced, while I'm getting more bullish that there will actually be a major Colossus release, and then we are talking about like, then we're talking. So it's a tricky, it's a tricky game.
I have a question, Joe, and for anybody, but aren't these unlocks forecasted? They've been out there. They've been heavily hedged. Like there's no, there's no element of surprise here. So do you, I mean, expect the unexpected, or just there's just going to be raw selling pressure and it just goes back again? It's not, it's not a surprise.
Exactly. But that's the, I have thought about this a lot. Like, can you pre-price that in with absolutely no surprise? And the answer is not really, because it's just mechanical selling pressure. Even if you know it all day long, what are you going to do, right? They all unlock all the wealth advisors say, and this is not trivial, we have 5% float, it unlocks up to 60%. It's a crazy multiple, right, of shares coming into the market. And they're all bullish on SpaceX, of course, but all their wealth advisors say, "You need to take at least 20% of the table. Are you nuts? You're a little factory worker. You make a $100,000 a year. You have $5 million sitting there. You need to diversify, right?" Everyone is going to say that. So, it doesn't, there will be forced selling pressure to some extent. And then let's assume you're smart, you are a hedge fund or something. What are you going to do? You could only sit there and say, "Well, I'm going to buy the dip." But then you don't know how much it dips the next month with the next unlock. So that's the problem, Jeff. There is mechanical selling pressure.
I, I would like to object to that. So first of all, um, options opened up the second week after the SpaceX IPO, actually the fifth day, the Tuesday. So people that knew from there on that they have to sell, just because SpaceX grew also so much, right? I mean, if they had it as a 5% portfolio position, now it was suddenly 10, 15%. I mean, even us Tesla shareholders, we bought it in March at two billion, and end of June, it was three billion, right? And if you're a portfolio manager, that makes a considerable difference if you have a portfolio of stock, and this suddenly has a 50% increase. So if you knew you wanted to sell, and you saw the stock going up 290, 200, 210, you most probably put in place an option strategy to lock in those prices. Okay. So you may still sell, but you have actually options on the other side, and so it's actually a neutral event when those two collide after the lockup. Then the lockup itself, there, I did write an article, everybody can find that in most of my articles, maybe Herbert, you can put it below the YouTube video when you publish this, on the exact structure, because we have about 50% belonging to Elon, who cannot go out for a year. We have about 13% in special purpose vehicles, who cannot go out until next year. They're not as late as as Elon, but they're staggered. So only about a third can go out between now and December 8th. And this is the first tranche. Now, this would be a third of all those early investors if they sold all of it. They will not. Then you consider those that have already option hedges, which will be neutralized. So I actually do believe this is going to be much more of a non-event than people anticipated because yes, on first read, it looks as it's a bit a huge opening up of the float, doubling the float, and it could, if everybody sold and nobody had hedged, it could. But I do believe that's not going to be the case. So that's the first thing. Then going back to the earnings call, I wanted to add something before we go. Remember the Tesla earnings call when it came to the topic of the merger? Yeah, here I am again. And Elon was like, "Yeah, this is not the venue. This is an earnings call. We would need another, uh, specific venue," and I'm handing it over to Brandon Ahart, our general counsel, who then said three times nothing either, and the topic was over. Now, SpaceX, very interesting, doesn't have a general counsel. They had that in the IPO documents. Um, there was a gentleman called David Harris, but he retired end of 2025. There is a VP Legal called Christopher Kard, Kardachi, not Kardashian, Kardachi, um, who is VP for Legal, but they did publish that they currently don't have a general counsel. That is highly, that is highly unlikely to IPO.
>> Without a general counsel, why are you laughing, Herbert? You're laughing.
Because we know, because there's already one at Tesla, that's why. That's why they don't have one now, right?
I just hope somebody asks the question so that we will see whether there's a general counsel sitting there, and then who do they kick it to? That question, because, yeah, like I said, maybe it's just VP Legal, Mr. Karachi, and, and that's going to do it. But at the moment, there is no general counsel.
>> So, so Joe, you know, Alexander is pointing out that when the stock, Tesla SpaceX stock skyrocketed right after IPO, then it fell significantly. One of the reasons why it fell was because it was a timing was the options trading opened up. And if you remember what Mark Cuban did when he sold his Broadcast.com to Yahoo decades ago, the smartest move he ever made was while he was waiting for that deal to, you know, for him to actually get his billion dollars, he actually played stock options on it so that no matter what happened, if there was a draw down, he would still make his money regardless of what happened, right? He bet a hedge. That's what Alexander thinks they, a lot of the SpaceX folks did, is they already hedged. That's why the stock fell.
Well, but I would push back a little bit on this theory. So, so first, Alexander, what I read is that 60% or 50% of the entire float unlocks by December. So, if you say it's...
>> That's not true because first of all, I mean, couldn't be 60% because Elon has 48 or 49. So that's impossible. And he, he cannot get out until June 13th, 2027. And then you have to take those SPVs out, uh, which are another 13%. So we're at about two-thirds that cannot get out until next year. The SP start earlier. And, and again, I, I really did a nice table on that. Maybe I'll send you the chart. Um, Herbert, I mean, let's just say 900, sorry, it said 911 million shares on lock, and there's 13 billion shares outstanding, right? On August 6th.
>> On August 11th. Yeah.
>> So, sorry. They're not, they're not all going to sell.
Yeah. So that's...
>> But here's, here's the problem. So we have, we have 5% float, and then let's say 30% in total get unlocked. So 25% on top of it. So 5x, it's 500% more than we have right now float. And...
>> Double the float.
It's double the current float. Not not 5x.
Everybody sells, we have double the float. It's...
>> Staggered. It's Joe. It's staggered.
Yeah, I mean, until December. Oh, yeah.
>> So it's 500% more in December. In 500.
So that is the problem because we have to consider if you have 5% float, it's not that everyone sells all day long. Only a tiny fraction of this 5% actually gets sold and bought every day. It's not that everyone sells it every day. So only a small fraction of the float is actually traded. Now, if you push 500% more into the market, or every time you push another 5%, whatever you count, uh, there will be a subset of these people who sell because what Alexandra mentioned, these option strategies, I would doubt that this is the majority of people holding these shares. A few of them did it.
But there are much more index buying coming. Everybody thought the index buying was only happening the first two, three weeks. That's not true. They could only proportionally purchase to the float. So now that every time the float increases, there will be readjustments. So you will see SpaceX heavy buying both in September and December because of the new freed up float. Honestly, it's just not as big a topic as everybody tries it tries to make it. That's my, I mean, I've...
My take on it is the August 11th. So that's why this is so important. What happens now? No one knows because no one can actually quantify this stuff exactly because we don't know. So it will be very important to see what happens on August 11th because that price...
>> On the 11th. It's on the 6th. It's on the 6th. The the earnings call is on Tuesday the 4th, and they allowed to go out the second day after the earnings call, which is the sixth.
Okay. Interesting. So that will be extremely important. That's all next week. Yeah.
Yeah. This will be extremely important because it will inform us for every, then the market can price everything. And once we see what happens in the first unlock, then everyone knows what roughly the mechanics are, and then it gets very interesting. So...
Well, and, and let me add to that. So I had multiple, really multiple. I'm, I'm sorry, I should actually stop talking to all these institutions because they ruined my time. But I've had multiple discussions with institutional investors who are in it as early investors. And I was really surprised that they didn't understand this lockup and when they could get out, because some of them really want to get out. And I said to them, so how, you know, you have staggered? They said, I don't care anymore about the second and third. I just want to get out with as much as possible on the first, because I think the merger announcement comes and will be not as well perceived for SpaceX investor. So I want to be out. So I do believe that first August 6th reaction, that is it. Thank you, um, Herbert. And there's a table on the bottom that has the whole details. Um, that August 6th will give us an indication. I give you that, Joe. But it will probably be exaggerated compared to the following ones because they, they will have done what they need to do.
Yes. Yes. But it's just important. I think everyone would feel much more comfortable after or after next week where we see, okay, what, give me some data points, and then from there, I feel much more comfortable that we are in a realistic price discovery phase, which is important for me, because that's why I hope they don't announce too much Colossus stuff in the earnings call, because I have my own theory. I'm pretty sure big things are going to happen this year, and I'd rather not have everyone know that. And, you know, it's better if they say, well, we are working on stuff, then we see the unlock, then I know where the price actually will go to, and then after, if it's still at 100 or 110, that's great. Then I would actually start building up a position because then we know...
That's it. That's...
Okay, can we move on, guys? Let's move on. I, I don't want to spend so much time on SpaceX stock. It is very important. What I want to go back to Tesla stock and tell me if I'm wrong here, but what I've heard you guys say so far, right? Number one, it's, it's, it's locked to, it's, it's tied to AI, and AI right now had a, a fall, but now there's a rebound. It was all kind of mechanical fall. Two, it's capex investment. People are very concerned as they realize what Tesla's going to have to do for capex to keep up with all the other MAG 7s. Then there is, um, the robo taxi forecast was pretty soft during the earnings call. That seems to be the number one reason that it fell after the earnings call. People are no longer as bullish about robo taxi for this year. That could still change. And then three, there's a merger overhang. How big of a deal is this merger overhang do you guys think?
Okay, let me maybe take that. And can you please show that chart I sent you about institutional ownership? I do, I do believe that even though there is an AI worry, and even though there is a, you know, what's the capex worry, institutions have understood that this merger will come. Maybe it doesn't come as quickly as I want it to come, but it will come, and are building up a Tesla position now. Let me explain this chart. This is the number of shares held by institutions, lock by Fintel. Fintel and NASDAQ and a couple others are doing that. They're actually doing it in a really bad way because you see that November 2022 jump, that's the split, 3:1, they can't even adjust for that. But just ignore that. I always hate when I see these charts and I have to explain that. But what you can see is while during 2025, it was quite stable, it went down at the beginning of the year, but now it is at its highest level ever. Over two billion of the 3.95 billion outstanding are with institutions. Now, bear with me. 3.95 are outstanding. 1.1 of those are Elon's. So that leaves 2.8. Okay. They have more than two. So retail is down to 800 million shares. That is where we are.
>> Can you put that in percentages?
Yeah, that means we're just over 20%. We came from...
>> Oh, we are. We were like over 50% at one point. Yeah. Over 50 at one point. We went down to the high 30s when we had to go through all these, all these votes, and every time I, we were all very active in mobilizing. We're down to the very low 20s.
Why is this low 20s? Well, there are two things happening. There are two things happening. One is the overall share count increased because of Elon investing his shares, getting restricted stock. So his package moved from 400 to 800 to now 1.1 billion shares because of the 2025, well, 400, it was, and then the 2025 restricted stock, and now the 2018 stock options transformed into restricted stocks. Booms, 1.1. So the whole, the whole, the whole outstanding shares moved from three billion to four billion. Well, no, sorry, I'm exaggerating. From 3.3 billion to 3.95, and that whole jump is nearly all the November 2025 package, and then the transformation of the 2018 package. So the whole thing bloated. First reason. Second reason is retail sold, and institutions bought. That is it. And that happened in July, and it breaks my heart.
>> This month.
Breaks my heart. What we heard, retail sell because of, uh, robo taxi forecast was soft. That was a lot of it. Although, as I read out, it was 420 at the beginning of July. It's now 308. It was actually falling throughout the month, not just after earnings on the 22nd.
Correct.
So retail selling because they're, they're getting scared out of it. But are, are truly institutions truly buying, or is it just retail sell?
Look at that. That's...
But it's just retail selling.
Yeah. So it's both. Somebody retail sold, but didn't sell it to other retail. Institutions bought. That's just it.
Yeah. Because I think, you know, there is a lot of panic of heart. Yeah.
And, and it's, it was never more clear than now that robo taxi rollout is imminent. Let's say in the next 12 months. It was never more obvious that they can scale this. And it was never more obvious than Tesla, not just Elon, the entire operational team, the finance team, everyone is all in and fully understands that, otherwise you wouldn't scale cyber cap like that. This is a major operation. So it's one of the safest bets on Tesla right now. I think that's why institutions are in so much. They say like, dude, what do you think is going to happen? Do you think they all lost their minds and building out Cyber Cap and and scaling this to a million per year with no reason? Like, exactly. And they know exactly how a merger will work. While for a lot of retail, a merger is about, oh, I want so and so much. Oh, I want my Tesla stock forever. Oh, I feel we're getting diluted. Whatever. I'm not saying I'm not dismissing all these fears, but those are not fears an institution has. An institution sees, we're at 300, maybe at 600 in a year. Bye. That, that's how quick it's decided.
Yeah. Well, I, if you, if you look at the last couple of months, I don't necessarily, I mean, there's a lot of reason for retail to have been, uh, scared at this point, just given what, what and how the company is communicating. But it, it's one of those things. This, this roll, I, I see some of the reasons why Tesla is doing what they're doing. When you have a safety critical roll out like what they're doing, it makes sense. It just, it sometimes it feels like, uh, some of the goalposts, some of them may be shifting, or some of the, the way it's worded may be shifting, and it's a little bit confusing people, and retail gets confused. Um, you know, there's, there could be one thing that they do. The other thing is these other things going on in the market too have been very disruptive to to retail as well. It's been, uh, even though the, the, the indexes are up and doing okay at the index level, there's been a lot of of mashing at the individual stock level. And I, and I think that puts, whether it's crypto, whether it's these other things, it does put pressure. And so, and Joe described what happened in July with momentum. So I think there's a reason for this chart, and the question is, is like, where does it go from here, and what does it mean to the future, and how Tesla, you know, how the voting will shake out. It's very interesting thing to think about.
And it's, it's unfortunate that in times of panic, you know, this is an amazing chart, Alexandra, that you showed, and I bet if you would look at Micron, Nebis, and all these stocks, you would probably see something very similar, that institutions absolutely loaded up in July.
I can, I can find them for you, Joe, and send them to you. Yeah, they would be interesting.
Because I think institutions, they have more, you know, they have analysis, they understand fundamentals, and they know this is just ridiculous, and they have higher conviction if something is ridiculous and say, "Just buy it."
It's not hard, whereas, uh, retail gets carried away. It's like, oh my god, this might be the end of the world, and maybe robo taxi is never coming, whatever, like this.
of stuff >> and I'm disappointed personally in Elon. I'm not, but I mean I'm just, you know, reflecting what I hear. And uh and and you know, they never had as many emotions involved in this whole story. Retail has a lot of emotion and hope and hope in there. And I found it actually very telling in that interview that Elon gave the economist. He had a passage where he without being asked for it came back to how retail understands him and supports him and you know how they and then he added something that he's never added before. I do understand portfolio managers. They have benchmarks. There is competition. I thought, "Oh my gosh, he sure is making sure everybody understands how he loves everybody. He never felt that he >> We'll talk about it later, Alexander. I think that means he's not focused on a quarter. He wants to focus on the future. Sure. >> Stock's going to be very volatile because these institutions are going to buy, sell, especially now that they control >> portfolio managers." Yes. bashed portfolio managers for years and this was the first time. It wasn't bashing. It was I understand and they have their own goals and >> I see. But I I still think it means that it's going to be it's going to be not uh perfectly aligned with what he wants. It's not the stock is going to fall a lot more volatile >> of course and and and then again let me just also state this. I do not think Elon is doing anything to manipulate short-term stock price. I just don't believe in >> I was going to ask you that question later. So just hold off on that. Okay. So we okay I I list out the four things right AI capex robot taxi for forecast is soft and then um the overhang the overhang okay the overhang is a big deal how big of a deal is that right it's like a big deal because people are like waiting for this to happen uh now what happens to robo taxi so we heard the robo taxi story in earnings where they basically people felt they came away from that saying that I don't see robo taxi scaling significantly uh beyond 5,000 cars maximum by the end of this year. So therefore, let's let's wait till next year. In the meantime, here's what we're watching on the ground this week. Uh Joe Techmar has videos of employee autonomous cybercap pickups and drop offs. We already know that that's not the big deal. Okay. Yes, this is happening in Giga, Texas, but now we're seeing more and more driverless cyber caps. No one in the in the cyber cab at all. Not even a one person driving around all over Austin. Thank you to Cybergab Spotter who basically showed, you know, you had one two here, one here, two here spotted on those days. Now we're seeing four or at one point six. I don't know how accurate this is. >> 68 now. 68. >> No, no. These are driverless cyber cab sightings. Is that what you're talking about? In public roads in Austin, >> unsupervised without monitor 68. No, I think you're referring to the robo taxi service. There is unsupervised and there's they're increasing it so that they're all going to be unsupervised in robot. I'm talking about cyber cabs sightings with no one in the car in public roads. Okay. >> So, does that mean anything that that you know there's now 76 uh robot taxis in Austin which 60 of them now you say 68 of them are unsupervised and that's increasing. That's great. But that still doesn't that story to me is expected at this point. It's the driverless hybrid recaps. It's like, okay, they've moved beyond just Giga Texas. They're now public roads. >> Well, FSD is tuned and ready on the Model Y. So, I agree with the the sentiment that it's going to be some 80 8020 9010 cyber cab to Model Y ratio, but I would like to see a lot more Model Y's hitting the streets and consistently staying on the streets. And I think that's what we're starting to see over this past week. Of course, it's a it's a magic mystery. We have to have people out there crowdsourcing this information. Um there's not really much else uh to go off of. But I think that is a good sign. I think we are starting to see more of this. My Well, I I'm not we're not I'm not here to give advice. I just I would say expect the unexpected and believe your eyes because if you see all these delivery centers, if you see all these staging of cyber cabs and robo taxis and it's getting into the dozens, many dozens, hundreds, they're not doing this. And again, they're not doing this for some sort of show. um you know they and I think this is some of this is very binary in terms of when they decide to move and deploy these fleets. They're going to be extremely datadriven. You've got all these different things we just discussed that are out there. You've got regulator potential regulator approvals in other states and countries. Everybody looking at this. So I I do understand where Tesla Tesla's like look we as we've gone into this more like we have to be near almost near perfect otherwise we could just get you know unilaterally stopped out of a certain area from launch. However if you just look at the stats and if you look at the probability of injury and serious injury and and worse it's going to be better for them to go sooner than later. So, I I don't think, you know, I I know everybody feels like the we got the unexpected when they had the earnings call in in July. I think we did, but they're continuing to to move everything to the edge. Everything's getting moved to the edge. And I would just these people that are out there that are telling us that they're spotting individual plates and they're they're doing all the counts. This is very useful information, but I don't think Tesla's just doing this for the sake of doing it. I think they're getting the operation really ready to go.
>> Yeah. And I I also think I don't know I think people get carried away a little bit with their own theories like what does it even mean to roll out? I think we are in the middle of a rollout. You really think about it like we just seeing the deployments now they're testing cyber cap. Now they're becoming driverless. At some point we will see cybercap transporting passengers. And it's just I think what people underestimate it's not like a computer game where you say oops now it works deploy a million you know this is complicated stuff so it's it's more incremental the roll out and then exponential I think that's what it is right you you're starting to do that now you see all these cyber caps without drivers that goes on for a couple of months then you will see the first ones with passengers and they will keep testing and testing as Jeff said they're deploying it at the edge And I think we just in the middle of actual roll out. I think this is just how it goes. So I think I mean what I want to say is there's no point where sudden you wake up you read the news like boom it has rolled out. Like that's not how it works. It is rolling out as we speak.
>> Yeah. I've described this before when you're I I view it like a supply chain and I view all these locations as points of distribution. Like when you're in in my world before, when you're getting a smartphone ready for launch, you've got to fill distribution. That's why when iPhone launches or m you see a major phone launch and you can go anywhere and pick it up. There's this boring thing that happens under the surface that there's no movies made about I think Elon's talked about this. Nobody talks about it, but it is the process of getting the channel loaded and getting doing doing all the preparation, the quality, the safety work, all the preparation for launch. This is what we're seeing. Nobody's got the patience for it, it's totally unsexy and and everybody thinks what like when you see it happen, you see the first areas of distribution full like you're ready to go. But it's a really coordinated effort uh to pull all this together. So, I'm encouraged by what I'm seeing. I wasn't encouraged by the rhetoric on the call. And I I I go back to I think this is what the market reacted to. Spending more than free cash flow, dipping into the debt markets, and not and not hardening where the ROIC is going to come from, knowing you have a great history in returning capital, but not hardening that story. I think that's where you've got a lot of the leakage. And then, of course, the AI spillover and selloff. And I think that's by the way a brilliant uh uh analogy that Jeff gave. Imagine you have the iPhone 19 or 21, I don't know where we are, but the iPhone 21 comes is scheduled for January or whatever. It's scheduled for some point in in 2027. Imagine you had like 20 YouTubers and 200 people on X like tracking down every single person who is a supplier for iPhone 21 and reports on it. Like now it's there and then and then they call like Tim Cook. What the hell, Tim? You promised us it's going to be there on January, but I read like someone in China didn't ship it to, you know, where is it? We try to track down the first iPhone and it's not still not in Menlo Park. And then you would say, dudes, chill out. Like this is planned for next year. And if you track every single piece of the supply chain, of course, maybe you're disappointed. So I think we have to understand this is not like a like you know all these complicated global product launches or something have tremendous work going into that that's very boring and the difference with Tesla is that we make it unboring and then everyone is watching every single step and builds up these expectations when in reality it's just a giant machine that has to be fine-tuned all over the place at thousands of little pieces and that is why we are just grinding towards the goal and And I think what you see is consistent progress all over the place in in in dozens of cities with thousands of cyber caps at this point. I'm pretty convinced we are like close to 2,000 cyber caps or something. Uh so in a way everything is moving forward.
>> I agree with all that and it was my analogy just the other just taking the other side of that to keep everything in tension as Tesla promised a city the the rollouts and they promised the volume on the prior definitely of the January earnings call. So, you're dealing with the short-term expectations from the company versus reality. I think all we're saying is is like, believe your eyes when you see everything being moved to the edge.
>> And the question is is there going to be clarity on when does it move from the edge to the actual action?
>> We're in the excruciatingly painful slow slow and by the way slow slow slow still. And then though when exponential should be much more exponential than we were expecting. That's what I'm hoping.
>> Joe, what do all three of you? How how many cyber caps do you think will be out there in five years?
>> Are we talking half a million, 3 million, 10 million?
>> In in 2030, what is that? 31 years.
>> Let's say 2030.
>> Yeah, 2030. I'm very convinced we have over a million.
>> Yeah. Okay.
>> Very convinced. And only in the United States or all over the world?
>> No, I think they will be in Europe too and probably also in China
>> and of course, right?
>> I think it's going to be binary. If it works and if it's going to be binary if it works and it's accepted and it takes off and there's no then it's going to be a gigantic number and we're not going to remember this period of time. The the problem is is not everybody is thinking in fiveyear increments every five every rolling five years. So when you get short-term guidance from the company, you kind of want to be close or say look like we're get we're getting close and and here's what you should look forward to. But um I I don't think we're we're going to look back on this a year from now, even two years from now and not even the number is going to be so big.
>> What what is your expectation? Because they will only be produced in Austin, right? or will they also be produced in Berlin and in in Shanghai?
>> My expectation is is they will produce it globally. There's I mean like you can there's a question about Shanghai but maybe not um because quite frankly the the Chinese know how to design for cost and they know how to design a vehicle um hardware-wise. The issue is is can they extend their supply chains globally? That's where they've struggled. this the way Tesla has done this I think they will build it in other locations
>> okay and so that if that is the case what is the capacity for yearly production in all three sites because Austin can probably do 2 million per year
>> whatever Tesla honestly wants to set it to me it's there's a near-term like realistic like what can they do in real term and what it's capacitized for and I think you we can refer to what's in the earnings stack but if you're looking two years out Tesla can set that number much higher
>> and I think so my take on the scaling because we started modeling this out. I think within three years within three years after inflection point, three years after the point where they can really scale this in terms of FSD technology, uh I would estimate we are getting to a 2 million cyber cap run rate in Austin
>> per year and all all uh gigafac said that too. They said it will exceed the production of all other vehicles combined.
>> Okay. And I think that's just I think that's just an awesome because he implied that there's much denser. I think the other ones Jeff knows that much better than me. I think they will be lagging whatever two years after they make the decision or something that they want to also produce in Berlin that it takes two years to get this running I guess and two years in in in Beijing. No, because the new Model Y didn't take. How long did it take the new Model Y once the the initial line was built to because they rolled out Model Y everywhere? More or less the same time then?
>> Well, that was different. I mean, that was a little bit more that was incremental. It's kind of an upgrade from the existing Model Y. No, I mean they could they could build out you have the manufacturing piece of it and then you have the supply chain localization piece of it. they could do it in under two years um you know knowing Tesla and they can do it in phases like they could kick off suppliers or and the other thing they can do is they could take the existing US supply base and do exports for a while.
>> So I think there's a number of different ways to to manage it. The the they've designed the factory and the unboxed piece of it
>> to be uh more agile and quicker. So I think the key for Cyber Cab is can they get those cycle times in the factory? Can they get those yield rates at the individual stations in the factory? If they do, then the cost structure falls in line pretty quickly, especially if they get it to that peak volume. So I think that's the key for for Cyber Cab success. and getting back and putting a bow on this whole conversation. I mean, as an analyst, they're launching a product where the next largest robo taxi service at 1/8 the cost of the of the highest capex item, which is the vehicle. And they're when this thing's at scale, it will be at 1/8 the cost uh of the other competitor. So, there's a pretty compelling story. Uh but they've got to tell it.
>> Yeah. I first of all that everything you guys all said is only if everything goes right and there's a lot to be concerned about. One is China. We don't know what's going to happen in China yet. If they're going to approve robo taxi, if they're going to be able to build it there the you know the the warfare between the two just the week just a few days ago the government of US basically said nothing is allowed to come from China that is you know robotic or
>> Yeah. the same thing could be countered. We don't know. I don't believe it's going to happen to Tesla. I'm just saying we do not know yet what's going to happen politically with China. Europe, it's up in the air right now, guys. We have our five countries. EU approved FSE supervise. They're going to make a vote. But if just four countries that represent 65%, you have to get 65% of the countries approving. Yes. If if you don't get 65% of population of countries representing 65% of population approving it, even the five that is already authorized, Netherlands and others, they will have to that's temporary. They will have to pull back. So that uh uh you know for them to build cyber capab in Giga Berlin, they'd have to wait until for sure they got FAC supervised approved before they'll do that.
>> Yeah.
>> Um and then the issue with the Giga Texas that I'm very concerned about and and I'm not really concerned about this. Just something to think about is that Giga Texas, if you look at it, the vast majority of the footprint is owned by Cybertruck. A smaller footprint is for Cybercap. They need to do something about the Cyber Truck which is suffering. And Jeeoff, you saw this. I'm sure I haven't talked to you about this. Cyberdub production is at risk because there's a supplier dispute that's heading to court. So, there is this company called Angstrom Automotive Group that just bought Anderton Casting last year. Tesla paid for custom tooling to manufacture certain parts and components themselves, but then the ownership change. They can't get those equipment. That equipment is uh tooling that includes large diecast equipment, trim dies, fixtures, cutting tools, and this is imminent. Tesla says reproducing that equipment will take five to six months, but they're already dwindling their components in mere days. So, what does this mean for Cybert truck? Do they have to shut down and not sell this anymore? Does this in any way mean anything about the future of Cybertruck or is this just a temporary hiccup?
>> It's it's it's temporary and it may be severe for a short period of time. I've been a party to this before. I've dealt with these situations before. It's a it's unfortunate, but what Tesla is saying, by the way, this is not unusual in terms of the tooling ownership. Typically, when you're an original equipment manufacturer, an OEM, you are and if you're doing custom components, meaning that component is for your product, you're typically doing the investment and buying the tools, meaning the tooling. So, the things that plug into the supplers's machinery, so they make a part that looks like the part that you want, the tooling, the dyes, that's yours. And what Tesla is saying is, I want those. Even though I'm not going to do business with you anymore, that's my stuff. Release it. I'm sure that this company says, "Hey, you owe me X, Y, and Z and there's a dispute and this is where this is where things stand." So, typically typically the companies go back and forth and they settle. I I mean, and I've been where it has to go where it has to get escalated. It has to go out for go to court in some situations, but it's it's rare. Uh, so Tesla's got to work through this. What they're saying is, look, if we had to go and just like you can keep the tooling, we'll build our own new tools and go to another supplier. They got to qualify that supplier. They got to build those new tools and it's going to take time to ramp that up. They've got tools that they know that works. They have to go match them with another supplier and get that process up and going. So that's what they're saying. So short-term issue. It's not doesn't kill the Cybert truck indefinitely. Tesla could figure this out. But yeah, you don't want to deal with these kind of things. It's a short-term issue and and we don't know how much inventory they have.
>> It is of it is. But we also have to admit the Cybert truck was really a disaster for all suppliers that did then specialize in Cybert truck supplies because the numbers just never hit to the point that they were expecting. So I I'm not defending these guys. I don't know anything about these guys, but I do believe this is a story that's much more complicated and two-sided than what was reported on on on Bloomberg. Um I understand that Tesla says fair enough. at least give us the machinery we paid for back so that we can then work with other suppliers for that machinery and they are probably sitting there and want some compensation for it or I don't know what I I do believe this is impossible for anybody to judge and you know I'm always very easily on the legal side defending Tesla but on the product of the cybert truck which has a lot of merit and a lot of things that were tested on a cybert truck will be essential parts now on the cyber cap and on many other things that are are yet to come. But for the suppliers that build factories that keep that hope to sell thousands and thousands of pieces and then it was half of that, it was a tough pill to swallow. And may I just add something and I'm sorry I'm jumping back to a subject you were talking about China production of of cyber caps. The only caveat, the only issue I have with a merger, and that's not an issue because it's now or it's in three months or six months or whenever it is, is I want to see what will happen with Tesla in China. And I'm not saying they have to close or whatever. I'm not even going to thinking on that. But this is not going to be solved quickly and has to be addressed very early in those merger press releases, AK filings and then proxy because that is the most sensitive part of a merger. This is a merger between two US companies and it could be very simple especially with a friendly administration but there is also a factory in Berlin. The Europeans can't say much. That's all, you know, working as it is. But given the trade wars, given the political climate between the United States and China, Tesla is something that can be a token of high negotiation. I was very positive in May when I saw that Elon went with President Trump to ch China. He had big smiles whenever he came out of negotiations. I had the feeling that was, you know, preparing this whole turn around in a very favorable way. Every day there is news to this topic. So just as a Tesla retail investor,
>> every day there's been no news about the stock.
>> Okay. Excuse. Exactly. That's what I meant.
>> There's been no news.
>> So what was that all about? Nothing came out of that.
>> Just wrapping up on the cy cyber truck. Um so what you said, Alexandra, is is correct. And there there's two sides to the story and I think people should just understand that there's two sides of the story and that the Tesla side of it is dominating. media need to understand the other side of it. But if Tesla's just asking for their tooling, I don't think there's anything there's a problem with just saying that here's I want the tooling I bought back. You can't hold it hostage. Um on the ter I found Tesla in my experience and what I've seen them to be very conservative in their demand signal. So just because Cybertruck was touted as this big thing, they build product in a build to order model, not a build to inventory model. So, it's not like iPhone where there was a million cyber trucks built up and they didn't sell and they had to push all this stuff back to suppliers. So, yes, the the forecast never came through, but I think Tesla's pretty methodical and measured with the signals they give the suppliers. So, but anyway, this is their own tools and they should be able to get them back and use them somewhere else. I'm not saying that there's not liability on the other end and you're right, there's two sides of these stories
>> all the time. Finally, just on China, you would be amazed at what can be done via firewalls in companies. And I I've seen this before and you're right, something may have to happen here. It's difficult to speculate, but uh this wouldn't be the first time that there's some sort of regional concern and that needs to be addressed.
>> Okay. Oh boy. I've got some comments about Cyber Cab and Cyber Truck, but I I will withhold that. Um, quickfire question and I just realized this is not a quickfire question and then you guys are going to be confused with it, but does Elon care about Tesla's stock price? Shortly,
>> well, if there's a merger in the making, he has to look at it every day. There is no doubt about it because it the the two stock prices will determine their strategy. There is much more than one strategy. There is much more to it than just um a multiplier of the SpaceX price. But uh depending on the stock price, you have to make it attractive. The the most difficult part about it is in my view the retail shareholder vote. And uh believe me, they're taking temperature on X every day on what the mood is. So the the does he care about the stock price? In absolute terms, not at all. He's not a seller. He said he's not a seller of SpaceX. He's certainly not a seller of uh of Tesla. He was a buyer. just purchased ex u exercised his uh stock options to purchase the votable restricted stock. So all this I mean let's just get it for one second to that 2018 compensation package because I I cannot stress enough this guy set up in 2018 a compensation package with goals that were unreachable. The whole world agreed they were unreachable. He reached them between 2020 and 2022. He agreed now and and then he should get the options with vest in 2028. For 10 years he was not remunerated for it and he couldn't vote that those stock options for 10 years. I mean who else in this room for 10 years didn't get paid. And then in 2028, okay, well, he thought in 2026, if only I could at least have I mean, I spare you the whole Tooneta case in the middle, but if only I could have at least the voting rights of those and then set up this whole structure of how these will be transformed so that he in which he promised he will hold them another five years, right? I mean, who in the world does that other than an highly motivated founder who really wants to stay committed to the company? So, is he worried about daily stock price? No, he's not. This is the perfect example to show that he's not worried about the daily stock prices. But then again, the current things to execute mean he has to be interested in it every single day.
>> Yeah, I think uh you know normally I would say no, but with this whole merger situation, I mean it's just logically has to. You're basically buying one company with another. What's the cost of these companies? What's the currency? So both SpaceX and Tesla kind of matter. And that doesn't mean he needs to influence the stock price, but he has to watch the I mean it informs the whole strategy. So I think there's no way around the fact that this is very important and shortterm it depends what the plan is with the murder. If they plan to do it next year, then he doesn't care short term. But if he wants to do this year, yeah, it matters.
>> Yeah, nothing to add.
>> I I think he does care about the stock price only because I do think he cares about the retail shareholders, but I think he cares even more so about his employees. Imagine if you're a Tesla stockholder and you're an employee and you've held on to this stock or you're gaining stock, but it's been flat for 5 years. It's not, you know, it's not great. So I think that for that reason I think that he is motivated to help make the stock you know get the company get the earnings there get the get the company producing of course it's all about product and business build the right product build the right business eventually we'll get there but certainly fiveyear stock f like this it's got a weigh on his mind because his employees deserve what they deserve. We have to understand with this whole merger this is a non-trivial thing like you know people don't take this seriously enough in my opinion the rule is very simple SpaceX has to be as high as possible for the merger the lower it is the worse it is for everyone done if SpaceX goes to 10 trillion everything is very easy you do merger of equals we get I don't even know how much like we get infinite infinity money for a thousand bucks whatever per share and everyone is happy so it's really it seems very complicated But bottom line is they need to get SpaceX up and if they think they can't because of unlocks whatever I don't think they can do the merger then they have to they need their timing and I think they don't even know exactly they cannot predict the stock price they know they have some aces up their sleeve they have Colossus coming but then what so they need to time it in a way that SpaceX needs to be at 200 or something that would be the ideal
>> we were there we were there and I think but everyone knew it's going Yeah,
>> that was the whole idea. If you look at the financial engineering that went into that IPO perspectus of SpaceX, you know, these lockups, these index inclusions, the whole way this was set up, I done a nice chart and and all that. It looked so perfectly laid out until the options hit and that was the end of it.
>> Well, but for me it was pretty predictable that we will see a giant slide. So, I I think they must I think, you know, I don't know what they have up their sleeve. I think this whole Colossus thing is very real.
>> Yeah.
>> And that is the next peak because if they if they miss that one, I think 2027 won't be too great to be honest because then you have the satellite unless they have more Colossus coming. They really have four additional gigawatts or something.
>> Well, they you know they they are starting Colossus 3 right in
>> Yeah. There's actually a rumor of another facility that they're building in Texas.
>> Yeah.
>> Um I am live streaming the SpaceX earnings call on Tuesday, August 4. So if you guys can join us, please do that. I will be at 12:30 Pacific time. Wonderful. Thank you everybody. This is always the power panel that we bring you with Cyberbulls. The best discussions, the most indepth, the most uh thorough analysis and infor shared to you by Alexander Mertz and Jeff Lutz and Joe Beck, the all experts in their fields. Thank you everybody. See you next week.
>> Thank you. Thank you.
>> Thank you.