Elon Musk is once again trolling on Twitter — and once again, his shenanigans are affecting both his and his company’s bottom line. On the latest Pivot podcast, Kara Swisher and Scott Galloway discuss the magnate’s latest strange social-media antics and what might be the motivating force behind them.
Scott Galloway: So my Twitter started blowing up last night. And our producer Lara is the one who gave me the heads-up — I went on, and Elon had called me an “insufferable numbskull.” And I looked up numbskull because I wasn’t entirely sure what it meant. It means foolish and stupid. And I think — I want your opinion here. I think I’m more foolish than stupid. What do you think?
Kara Swisher: Oh, that’s a hard one.
Galloway: That’s a tough one? I think it’s an easy one.
Swisher: Foolish, for sure.
Galloway: 100 percent.
Swisher: You have said you were stupid about Tesla stock, and I’ve pointed it out several times. Like, you were wrong, not stupid.
Galloway: I didn’t understand, quite frankly, what was going on. I didn’t understand why he and his army of flying monkeys were coming after me.
Swisher: He gets it into his head sometimes.
Galloway: I had put out what I thought was a fairly innocuous tweet saying that a page out of the CEO big-tech playbook is they never want to take responsibility for their actions, including selling stock. And I think what’s happening here is that — so Elon Musk now has, I think, about $200 billion of Tesla stock. He was given so many options as part of his comp package that when they expire, he’ll exercise them because they’re hugely in the money. But that triggers a taxable event. The delta between the strike price and what the stock is trading at means he will probably have somewhere between a $5 and $10 billion tax liability. And what he could do easily is borrow against his holdings — $10 billion at probably 0.5 percent — to pay his tax bill. So he could basically borrow money for free to pay his tax bill.
But here’s the thing: Some very smart people who manage his money have said to him, “Look, if your stock got cut by 90 percent, Tesla would still be worth more than General Motors and Ford.” So we have to model out the possibility that just as your stock has gone up ten times in the last 24 months, it could get cut by 90 percent. And if you had all of this money, and he’s probably been borrowing against his money — I’m sorry, borrowing against the stock for a while — if you have $20 billion in debt in your holdings, go from being worth $200 billion to $20 billion, this could be a really, really ugly scenario. So they’ve modeled it out. And he’s obviously decided — and by the way, it’s the smart thing to do, and it’s his stock. He’s entitled to sell it. But instead of taking responsibility for saying “I want to diversify; I need to pay some taxes,” he says, “Twitter, you tell me what to do.”
Swisher: Yeah. Over the weekend, he put out a Twitter poll asking if he should sell 10 percent of his Tesla stock. Scott, you tweeted that he’s using the Twitter results as a cloud cover to monetize Tesla at prices that he knows aren’t sustainable without outright telling the market he’s lost faith in its valuation — although he has said that somewhat. This has happened before. I’ve seen it happen before many times.
Galloway: So Lara pointed out — and let’s just call out the elephant in the room: The sexual tension between the two of us is palpable. It’s palpable, I got to be honest. Last night, I did have a sex dream about Elon. I was running my hands through his chest hair. We were in a hermetically sealed container, 30 feet below the Martian surface, recognizing that we were about to die a horrific death either from asteroids or increased radiation or gravitational pull that was melting our bones and neurons. But you know what? We had each other, Kara. We had each other.
Swisher: I’m going to take over. Wait a sec. I’m going to get away from the weird sex dream you had about Elon. Here’s what Elon told me last month — he’s talking to me, though probably not now. Here’s what Elon told me last month at Code regarding his Tesla stock And by the way, I’m not Elon’s mom. He does whatever he wants, so don’t blame me.
Audio of Elon Musk clip: I have a bunch of options that are expiring early next year, so I’ve got a huge block of options I’ll sell in Q4 because I have to or they’ll expire. And my top marginal tax rate is 53 percent.
Galloway: Well, okay. But here’s the problem — and again, another page out of the playbook. Just in time to monetize the wealth of the wealthiest man in the world, he’s decided to peace out to Texas. He’s no longer a California resident. He became a resident of Texas in October, just in time to start selling some of that $200 billion. So that’s just not true. But you know what happened? I thought my Twitter was going to absolutely go crazy and the trolls were going to come for me. But he decided to take another ten milligrams of CBD. And did you see the tweet he put out to Ron Wyden?
Swisher: That was something else.
Galloway: Okay, so Senator Wyden basically said, well, something along the lines of “Maybe you should just pay your taxes.”
Swisher: Which is common among politicians. They do that all the time.
Galloway: And you know what? He wrote back “Why does your PP look like you just came?”
So here’s a little bit of color on Senator Ron Wyden. His father fled Nazis. Senator Wyden was a scholar-athlete, which means he is very disciplined and in amazing shape, and he has been reelected four times to the greatest deliberative body on this planet or any other planet. So, Elon, shut the fuck up.
Swisher: Yes, that was not in good taste, I would say. But Twitter is not in good taste.
Galloway: He’s in bad taste. This is not Twitter’s fault.
Galloway: What do young people think of our connective tissue, our government, when the wealthiest man in the world starts tweeting at the head of the Senate Finance Committee, which I would argue, on a risk-adjusted basis, isn’t great for shareholders, saying, “Why does your PP look like you just came?” America, everybody. That’s our role model.
Pivot is produced by Lara Naaman, Evan Engel, and Taylor Griffin.
This transcript has been edited for length and clarity.