SEC Deposition — "Funding Secured"
Questions on ElonsFAQ asked in this interview (5)
Transcript
1:26Elon MuskI do. Elon reef musk e l o n r e e v e m u s.
1:42Elon MuskSa.
2:28Elon MuskMay I take an opportunity to review it again?
4:55Elon MuskReferring to this. Yeah. General.
5:07Elon MuskYes, I do not.
5:16Elon MuskAnd sorry, I forget that even though it's videotaped, there's also a written thing which hence the clarification has sort of puzzled as to why it's been repeated, but yeah, sure.
5:38Elon MuskYes, I am.
5:57Elon MuskSa.
6:30Elon MuskYes.
7:08Elon MuskYes, I believe so.
7:18Elon MuskTransfer.
7:34Elon MuskI mean, not before government agency, but I've done depositions in civil cases. Yes, Yes,
8:21Elon MuskI do.
8:34Elon MuskYeah. Should I be answering these or just acknowledging.
8:46Elon MuskOkay, wait for a pause. My apologies.
8:56Elon MuskMake things difficult. If I'm making things difficult for a stenography standpoint, please let me know.
9:28Elon MuskYes.
9:33Elon MuskNo,
9:49Elon MuskI reviewed documents last night with counsel and that's. That's pretty much it.
10:03Elon MuskNo.
10:08Elon MuskDid anyone tell me to testify? Sorry. Oh, no,
10:20Elon MuskNo.
11:23Elon MuskWell, concerning is broad.
11:32Elon MuskI know, I know. Yeah. I was just working on the definition of concerning being quite broad.
11:49Elon MuskSorry. Defining the word or to mean and. Or. And the word and also means and. Or.
12:07Elon MuskSorry. The masculine gender includes the female gender.
12:35Elon MuskSome of these definitions, given that they are contrary to the sort of standard English meaning of the words, I think maybe I should just spend a moment just understanding them because it is interesting that it defines words differently than one would use in common vernacular.
13:08Elon MuskYeah, absolutely. When something says the word or has been redefined to mean and. Or, and and has been defined to mean and or as well is unusual. I've not seen that.
13:32Elon MuskSa.
14:15Elon MuskAll right, thank you.
14:34Elon MuskYes, I am. Not offhand. No. Yes,
14:50Elon MuskI did not. Yeah. No.
15:03Elon MuskSo. Not that I can recall. I do not think so.
15:31Elon MuskI'm not sure of the exact date. But shortly thereafter, the end.
15:44Elon MuskI think it was within a few days. Some may have been immediate. I'm not sure.
15:59Elon MuskI provided my phone and several computers.
16:18Elon MuskYes. Yeah, it is.
16:33Elon MuskDon't think that happen.
17:04Elon MuskYeah, I mean, of course, being.
17:19Elon MuskSure.
20:17Elon MuskAll right. No,
20:31Elon MuskI believe so.
20:38Elon MuskNo.
20:48Elon MuskThere.
21:13Elon MuskPretoria, south africa.
21:23Elon MuskI was going to Queen's University in Canada. Was there for two years, transferred to the University of Pennsylvania, completed a dual undergraduate degree in. In physics and economics at the Wharton School, and then came out to California to do a PhD in flight physics and material science at Stanford, but ended up putting that on hold to start an Internet company.
22:22Elon MuskI met a lot of future investment bankers to convince me not to have a career in that direction. It.
22:58Elon MuskI am the CEO of the company, although I'm considering changing my title.
23:10Elon MuskNothing quite literally. No. I just think there's like there's too much focus on titles. And I think that you have all these titles like Chairman and CEO and sort of all these titles, and people get too focused on titles and then everyone wants a title.
23:33Elon MuskSo I think the best title is no title.
23:40Elon MuskYes,
23:46Elon MuskYes. Well, I'm considering just not having a title there either.
23:58Elon MuskThe title of Chairman is somewhat of an honorific and has little in the way of de facto value. So.
24:22Elon MuskNo,
24:27Elon MuskI just think people are too concerned about titles.
24:36Elon MuskI hope not. I don't think so. Oh, well, yeah, but that's not really the title.
24:53Elon MuskI think I somewhat embarrassingly called myself Chief Product Officer or something like that. That was in the vestiges of the past. That's a tragic title. Yeah, I think it might be, unfortunately.
25:25Elon MuskWell, so the origins are interesting.
25:32Elon MuskThe. At some point there should be some accurate recounting of this, but in 2003 I had lunch with JB Strauvel and.
25:50Elon MuskAnother fellow who was his name, I'll remember in a moment, but he's quite famous in space and he's the one who requested the meeting. And in the course of the meeting in 2003, we got to the subject of electric vehicles.
26:10Elon MuskAnd I mentioned that my PhD at Stanford would have been in high energy density.
26:20Elon MuskElectric energy storage for electric vehicles, essentially trying to develop advanced ultracapacitors for use in electric vehicles in order to commercialize electric vehicles and make them work and have long range and fast charging.
26:34Elon MuskIs this too fast? Is this okay? And so JV suggested that I have a test drive of the T0 vehicle that was made by AC Propulsion, which is a small, sort of a small engineering shop in Southern California.
26:58Elon MuskSo I had a test drive of the T zero, which was a sports car that had essentially the properties of what we later did in Tesla with the Roadster, where it had about a 250 mile range 0 to 60 time of under 4 seconds.
27:19Elon MuskAnd yeah, so it was sort of a proof of concept prototype. And I talked to Tom Gage and al Capone at AC Propulsion and tried to convince them to commercialize the T0 and saying that the world really needed to see what electric cars were capable of.
27:47Elon MuskAnd despite my best efforts, I could not convince them to commercialize the T0. So they were just not interested in going beyond a sort of small engineering shop. So after a few months of trying to convince them to do that, I said, well, if you.
28:06Elon MuskIf you guys are not going to create a productized commercial version of the t 0, then would you mind if I did that? And they Said sure. And it's important to Note that the T0, while it was a two seater electric sports car, it also didn't have any doors or airbags or any safety features and was extremely expensive to make on a one off basis.
28:40Elon MuskIt was like half a million dollars. So there's quite a big gap between a proof of concept prototype and creating a car that meets all of the regulatory requirements and is safe and reliable and doesn't cost half a million dollars.
28:59Elon MuskSo when I suggested that to Tom Gage, he said, well, there are two other teams that are interested in doing this as well. I never met the other team, but the one team he did introduce me to was Martin Everhart, Rock Toppling and Ian Wright.
29:26Elon MuskWright W or Ian I A N. So no, they didn't have anything except a business plan which involved commercializing the AC repulsion T0 and I thought running SpaceX at the time, this is maybe a way for me to advance the course of electric vehicles without having to run two companies that didn't work out obviously.
30:04Elon MuskI think some degree, it's sort of like a case of you can't have your cake in either two. So whenever you try to do something and avoid hard work, good things do not come from that or at least too much work.
30:25Elon MuskSo I thought I would combine forces with Mark, Martin and Ian and then bring in JB rather than just create a separate company with JB and me. Maybe more detailed, I don't know.
30:45Elon MuskBut I mean like, you know, it's interesting. I mean how much detail do you want?
30:56Elon MuskSure,
31:09Elon MuskYes, I know that date well because it was June 28, 2010.
31:24Elon MuskYes,
31:31Elon MuskYes.
31:37Elon MuskI do. Is it legally the president or actually a CEO? I'm not sure if that's. I think technically it's the president or something like that, but yeah, head of the company.
31:57Elon MuskApproximately.
32:07Elon MuskSimilar. So I am the CEO and chief engineer, chief designer of the rockets. So it's really pretty similar to both companies. I drive the technical direction of the product.
32:22Elon MuskSo I'm the overall head of engineering or design and also run the company.
32:34Elon MuskYes. But the time allocation is minor. So I have some little companies.
32:51Elon MuskYeah, well I have the boring company which digs tunnels, sports towns and that's a real fun company I have to say. The enjoyment to grief ratio is very good there so far.
33:12Elon MuskThe enjoyment to grief ratio is quite good for now at least. Various last words.
33:27Elon MuskSo that's digging tunnels and selling bizarre merchandise. And then there's neuralink, which is where the goal is to help solve brain injuries and you know Strokes, dementia, Parkinson's.
33:56Elon MuskJust there's a whole range of epilepsy and using computer chips to be able to do that. And this is a bit esoteric but with a longer term view to potentially achieving symbiosis with artificial intelligence, which I think achieving symbiosis with artificial intelligence, which could be important for.
34:21Elon MuskOn an existential level for civilization.
34:32Elon MuskNo.
34:39Elon MuskYes, yes. Just neuralink. So just those three for companies. Yeah. Haven't bothered with a boring address.
35:07Elon MuskYes. There may be occasional mistakes, but it is almost always. I try to be quite careful about specificity of each company.
35:21Elon MuskActually the phone's pretty good. Essentially, if somebody emails me from Tesla it's automatically going to be initiate an email. The reply will automatically come from my Tesla address. Likewise, if I send an email to somebody and they're at Tesla, it will default to sending for my Tesla address.
35:51Elon MuskTo the public. You mean.
38:22Elon MuskI mean there's only one. I know I'm not supposed to do this, but there's only one communication that I recall relating at all to the take private which was Todd Moran sending me a note saying.
38:51Elon MuskYes, yes,
39:04Elon MuskYes. It was just one. One note. Yeah. It may, it may be privileged, I don't know. But it's not. I mean I can just say it's not like it was.
39:30Elon MuskI'm not sure exactly. But early August.
39:42Elon MuskIt was prior to that. Yes. It informed the tweet. So that's why I think it may be relevant.
39:54Elon MuskHow's that?
40:08Elon MuskSam Seller is my chief of staff and is.
40:15Elon MuskHe is on the.
40:31Elon MuskYeah. I do want to emphasize very little was discussed at all.
40:42Elon MuskYeah,
40:48Elon MuskI don't. I don't think so.
40:56Elon MuskIt's very brief,
41:03Elon MuskMaybe a few weeks. But this was very, very little and. Yeah. And was sort of unrelated to this matter.
41:21Elon MuskProbably june. Yeah, I think so.
41:40Elon MuskYeah.
41:48Elon MuskYes. Yes.
41:57Elon MuskNo,
42:06Elon MuskI'm. I don't recall. Don't know.
42:14Elon MuskI think Sam may have just set the setting, but I'm not sure. Sam's hilarious.
42:28Elon MuskI mean to be clear, there was very little on. Not like there was a ton of communication. It was very little on this.
42:58Elon MuskI don't recall. I need any communications.
43:06Elon MuskYes.
43:13Elon MuskI didn't. I was actually quite surprised to see a note from him. Sa.
43:46Elon MuskUnwise. I did have installed but I actually not used it in years and I don't use. Because I.
44:03Elon MuskNo.
44:26Elon MuskI have twitter. Correct.
44:41Elon MuskYeah. It's embarrassing.
44:48Elon MuskIs it funny?
44:53Elon MuskWell, there's just, you know, I think it sort of gives this false impression that people are having these amazing lives when in fact they can Be quite miserable. And it then creates unhappiness because people compare their life to the apparent life of others and then they feel bad.
45:21Elon MuskAnd I think it may actually contribute to an increase in the suicide rate, which is terrible. And so I didn't like it and deleted it.
45:33Elon MuskAbout a week ago.
45:39Elon MuskYeah, right. In the beginning when it was a filter for Twitter, it used to be like a, you know, you'd have an image on Twitter as like a plugin and you'd like use it as a filter.
45:50Elon MuskI was one of the first people able to use it actually. So I took snapshots of like the few photos that I care about and then deleted it.
46:04Elon MuskYou're kind of close to it. An early version, not sure it was made up for, but it was like very early. You can't even get those filters anymore.
46:21Elon MuskI use it infrequently. I mean, I had it, I think for six or six and a half years and in that entire time probably did an average of 1 post a month or something like that.
46:39Elon MuskI actually only realized about a year ago that there was one, but it's just entirely for personal reasons and generally involved sending some Instagram picture to somebody else with a, you know, LOL or something.
47:05Elon MuskYes, sorry, this is entirely frivolous.
47:27Elon MuskNo, not at all.
47:35Elon MuskWell, technically I first signed up for Twitter when it was very tiny. I think it only had a few thousand users. And a friend of mine was the. Was one of the lead series A investors in Twitter and I signed up and then people just kept talking about like what kind of latte they had at Starbucks.
47:57Elon MuskAnd so then I was like, this is ridiculous and deleted my Twitter because it just seemed like nonsense. And then somebody else took over my Twitter handle and started posting things in my name.
48:13Elon MuskBut I kind of ignored Twitter until about probably when was it 2011 or 2010 or something. And a friend of mine suggested that Twitter would be a good way to talk directly to the public and bypass the media.
48:40Elon MuskObviously a double edged sword. But I thought, well, this could be a good way to not always have what I want to say filtered through the lens of a journalist.
48:56Elon MuskClose. It was unrelated to. Well, it was really from a press standpoint as a means of counteracting the press. But yeah, around that time,
49:11Elon MuskElon musk. No, close.
49:28Elon MuskI don't think so. No,
49:42Elon MuskNo, sa.
50:10Elon MuskIn the beginning, I'm not sure what I. I don't think. I think I was just tweeting nonsense.
50:20Elon MuskI was torturing people with my terrible sense of humor.
50:31Elon MuskYeah. Yes. Well, I'm not sure it has entirely. It's still, you know, whimsical bad humor interspersed with talk of SpaceX and Tesla and Boring Company and Neuralink and OpenAI and other things.
50:54Elon MuskOh, I forgot to mention OpenAI, sort of. It's a non profit. I'm not on the board or anything.
51:23Elon MuskI think it would have been two or three years ago,
51:34Elon MuskNot more than four years ago.
51:41Elon MuskYeah,
51:48Elon MuskYes.
51:55Elon MuskYeah.
52:01Elon MuskThere was a blatantly false review in the New York Times about this terrible test drive that a Times journalist had had in our car, where he fundamentally misrepresented the test drive and flat out lied, which we were able to determine from the car log, since it was our car he was driving.
52:28Elon MuskWe had full access to logs, including everything the car did. And his entire story was a piece of fiction. And so we pointed that out. It was,
52:49Elon MuskI think, 20, 2013 or 14, something like that.
53:01Elon MuskYes.
53:05Elon MuskYeah. Essentially about it trying to combat what I saw as misrepresentation of Tazeh in the media.
53:31Elon MuskI think it varies quite a lot. So it could be anywhere, maybe once a week or something like that on average. But then there are times when there's a lot more tweets than that.
53:51Elon MuskYeah, I think there can be. A week can go by with no mention of Tesla, and then a day, there could be a day where there's a great deal of it.
54:27Elon MuskDo you mean as. Was I speaking as a CEO of tesla or something? Or.
54:39Elon MuskI felt I was sort of speaking as leader of the company? Yeah, I guess.
55:20Elon MuskYou okay? Yeah, yeah, no problem.
55:34Elon MuskNo,
55:51Elon MuskI mean, occasionally I've asked Sam, do you think. What do you think of this tweet? Yes. Yeah, sure.
56:14Elon MuskWell, if he happens to be there, and I'm not too certain about this tweet, I'll ask Sam. What do you think? Most of the time I do not ask anyone.
56:44Elon MuskYes, there's. Well, yes, there's, I believe, a disclosure in our corporate documents that I use Twitter.
57:02Elon MuskYes.
57:21Elon MuskAt. No,
57:30Elon MuskI'm not aware of a formal policy.
57:40Elon MuskNot really.
57:53Elon MuskYes,
57:58Elon MuskIn some cases, very few. But I've actually gone back and unblocked a bunch of them. It's better to just mute them because then they use the block feature as they get all excited about that.
58:13Elon MuskMute's way better. They can still see my tweets, but I can't see theirs.
58:22Elon MuskYes. No,
58:35Elon MuskI cannot recall any instances. Right. Where did that.
58:49Elon MuskDistinct.
58:54Elon MuskYes,
59:01Elon MuskYes.
59:24Elon MuskNo.
59:33Elon MuskOh, sure. Yeah.
59:57Elon MuskOkay.
1:00:12Elon MuskAll right, sounds good. Cool.
1:00:35Elon MuskUnfairly. Yes, unfair in the sense that I think they are incorrect and that they are frequently sending information to the press or publishing it on Twitter or other social media that I feel is false.
1:01:17Elon MuskSee, well, they are frequently on television saying that Tesla is a fraudulent company, that I am a fraud and liar. I do not believe these are true. Yes, they also say that our stockings should be worth zero.
1:01:40Elon MuskThere's a long list.
1:01:49Elon MuskWell, yes, they've claimed that we have fraudulent accounting multiple times when that is not true.
1:02:04Elon MuskYes, the objective numbers are very high. There's, I believe, something on the order of 11 or 12 billion dollars of a short position officially against Tesla. This is not cast synthetic shorts or possible illegal shorting, which would suggest that number is higher.
1:02:26Elon MuskPossibly on the order of 15 billion.
1:02:45Elon MuskYes.
1:03:00Elon MuskYeah. So.
1:03:06Elon MuskFrom the moment that Tesla went public, even before it was really legally possible short sell looking Tesla stock, they seem to have found ways to do so. Then for the first year or two this was not too much of a problem.
1:03:23Elon MuskIt became pretty extreme around the first quarter of 2013. Very extreme. To the agree that the days to cover, I think was it on the order of 30 quilts.
1:03:43Elon MuskThis is essentially incredibly difficult, if almost impossible to cover your short position. And I pointed this out to them in the media a few times like this is really unwise to have this level of shorting.
1:04:02Elon MuskI recommend that they do not short Tesla for their own good. This is like two phrase.
1:04:23Elon MuskOver the past two years, I would say it has increased. Yes. Yeah, this has increased. I mean you can see the, the objective number or the, the dollar value of the short position against TE increased dramatically and proportionate with that dollar value increase.
1:04:43Elon MuskThe negative propaganda has roughly matched that increase in short.
1:05:06Elon MuskObjectively, it is the dollar value of the short position against Tesla on a sustained basis is the largest short position against any company in the history of the American stock market.
1:05:31Elon MuskMaybe I should talk to them more. They do not believe that it is possible for Tesla to do what it is doing. They think that there is no way for a new car company to prosper when faced with competition that is far greater and has vastly more resources.
1:06:01Elon MuskThey do not believe it is possible to f for us to execute as we have executed. And they've had this opinion for a long time and they've been proven wrong for many years.
1:06:10Elon MuskSo it just seems strange that they would not change their opinion.
1:06:19Elon MuskThat was my theory after 2013, because 2013 we had the short sellers generally felt we were going to go Bankrupt right around early 2013. And in fact, we were able to achieve a small profit in the first quarter of 2013.
1:06:42Elon MuskThis is contrary to all their expectations. The thing that they weren't expecting in Q1 of 2013 was that we would be actually able to rally the entire company and get about half of the quarters.
1:06:59Elon MuskWe'd only. There were two weeks left in the quarter and we'd only delivered half of all the vehicles we're supposed to deliver in that quarter. So they're expecting a massive revenue shortfall and a massive loss.
1:07:13Elon MuskI reorganized the company and everyone's job was delivering cars. From the design studio, human resources, legal, the general counsel, everyone. Me too. Two weeks solid of delivering cars. We had made the cars, we had customers.
1:07:35Elon MuskWe just needed to get the cars to customers. They were not expecting a reorganization of the company of that nature. And in the space of two weeks, we doubled our deliveries to customers.
1:08:07Elon MuskFair to say, historically, since the short sales have been on our case for eight years,
1:08:18Elon MuskEven though I expect us to be profitable and cash flow positive this quarter, probably next, and hopefully going into the future, at least to some degree, positive cash flow and minor profitability.
1:08:30Elon MuskThat should really be quite destructive to the short thesis because their thesis is contrary to that. They say we will never make a profit and we will have to raise massive amounts of money, and if we do not do that, we will definitely die.
1:08:46Elon MuskSo that would break the short thesis, at least. At least mostly break the short thesis. That said, I don't think they will go away. They will just come back every year and say this time they're right.
1:09:15Elon MuskI'm not sure what to do. Actually. They do cause a lot of brand damage because independent of outright false information, they are extremely good at amplifying any real negative information.
1:09:35Elon MuskSo if there's for example, a car accident, even though every year in the United States, 40,000 people die in car accidents, if there's an accident in a Tesla, it's front page news, even if nobody's even injured.
1:09:53Elon MuskThis is crazy. And this is because when that happens, they engage their PR agencies and they send. They engage their PR agencies and they send this to every media outlet in the most inflammatory way possible.
1:10:15Elon MuskThe media tells me this. I'm not speculating. They amplify it on social media and you know, if there's a Tesla car fire, although you're literally 10 times less, like 10 times less likely to have a fire in a Tesla than in a gasoline car, they'll try to create the impression that Teslas have a fire risk.
1:10:39Elon MuskNobody has even burnt a finger in a Tesla ever. Zero fire injuries ever. But you wouldn't know that from reading the news. You wouldn't know that our car still has the lowest probability of injury, the Model S.
1:10:56Elon MuskActually technically the Model 3 is about to be the best, about to be slightly better. The model 3. The model S has lowest probability of injury of 8. The model S has the lowest probability of injury of any car ever tested by Nitzer.
1:11:13Elon MuskAnd the Model X is number two. The Model 3 will soon be number one by half a percent, a small number. So you wouldn't know that this is the safest car, this is the safest cars ever made because you're just constantly worried about Tesla accidents.
1:11:31Elon MuskAnd there'll be some outrageous thing where you know, someone will as it happens, crash into a fire truck or at 70 miles an hour walk away with no injuries, or in one case, a broken ankle.
1:11:48Elon MuskA sprained ankle wasn't a broken sprained ankle. What's remarkable about that is they walked away from a 70 mile an hour impact into an essentially immovable object. You could not survive in any other car because that's the thing, let alone no injuries, you could not survive.
1:12:13Elon MuskA little bit. If I may add some color commentary. The. The people who think, who most think I'm obsessed about the short sellers are the short sellers.
1:12:35Elon MuskYes, it was hard not to. He's like he wrote a series of carefully crafted pernicious articles on Seeking Alpha and on Seeking Alpha and they were apparently show off in my Google alerts.
1:13:02Elon MuskAnd then he had a very active social media presence. He is in my opinion quite an evil person.
1:13:18Elon MuskI bet he is. Do you? Yes, I would say it was certain. I don't know. But I would, I would say with certainty. Like if you ask me to place a bet, I would place that bet on 1,000 to 1.
1:13:29Elon MuskThat is. Yes,
1:13:41Elon MuskYes.
1:13:55Elon MuskAs usual he misrepresented the situation. So on on Twitter people were saying that this guy's name is and that he is for.
1:14:11Elon MuskSo this was like quite a surprising thing to me. I did not actually think this could be. This seemed very strange because purchased several Teslas over the years and had spoken positively about Tesla.
1:14:25Elon MuskThis seemed inconsistent with what we're saying. So I sent a text to saying asking to is this. Do you. Is this guy, do you know this guy and do you agree with what he is saying?
1:14:51Elon MuskAnd then looked into it and he did not agree with what he was saying and he had no idea that this was going on. And he was quite outraged and asked him to stop.
1:15:02Elon MuskBecause obviously if somebody's and is espousing these views that are completely contrary to the principle, then people will think they are the views of the principle. This is not right.
1:15:32Elon MuskI sent an email to this also was like something on Twitter. They were saying that there was this guy who was a. Who was saying all sorts of crazy negative stuff about Tesla.
1:15:45Elon MuskAnd so I sent a note to asking is, is this guy your employee? Is your employee blogging about making all these like outrageous statements about Tesla? And he looked into it and said no, it is.
1:16:10Elon MuskThere just seems a bit sort of, you know, beyond pretty tenuous grounds. I know I can, you know, dirty tricks, campaigns baked, you know, it was not good. I'm not good.
1:17:16Elon MuskThat area.
1:17:22Elon MuskYes.
1:17:30Elon MuskA short burn is where.
1:17:39Elon MuskThere's a sudden rise in the shock price, stock price that causes shorts to have to cover their losses and it caused them to lose lots of money.
1:18:07Elon MuskTesla reaching cash flow positive. Tesla reaching the goal of 5,000 Model 3s per week and then shortly thereafter being profitable and cash flow positive.
1:18:28Elon MuskYes,
1:18:55Elon MuskThe document would be helpful,
1:19:04Elon MuskSam.
1:19:39Elon MuskYes, yes, yes,
1:19:50Elon MuskYes. Reaching. Tesla reaching 5,000 model threes per reef. Tesla reaching a production rate of 5,000 model threes per week.
1:20:10Elon MuskYes,
1:20:18Elon MuskYes, but yes, yes, the schwarz was very tenuous, I should say not very tennis, very tenacious in hanging on to their thesis that Tesla is going to go bankrupt.
1:20:36Elon MuskAnd so Amazingly, despite reaching 5,000 vehicles per week, they still thought their original thesis was held order.
1:20:56Elon MuskI think in retrospect that would have been a smarter move.
1:21:14Elon MuskSam.
1:21:42Elon MuskYes. Not in this month. Was it this month? Okay, yeah, it may have been, yes, yes. It was actually just, just barely this.
1:22:08Elon MuskThanks.
1:22:19Elon MuskAs effectively a buyer. But it's, I mean it is.
1:22:33Elon MuskNot in the normal sense of a take private being a leveraged buyout where shareholders are squeezed out. So it's a buyer, it's a buyer of those who did not wish to remain private, but not a buyer of the company as a whole.
1:22:56Elon MuskSorry, fire for those who do not wish to remain with the company when it is private. So a buyer technically, but not. But a buyer only if people really did not want to be part of the company when it was private.
1:23:32Elon MuskYes,
1:23:47Elon MuskI think, you know, obviously one has multiple hats in these situations. So there may be moments where it was been me as Tesla CEO and moments where it was me as Tesla as the proposed buyer.
1:24:02Elon MuskBecause obviously I run the company and I'm the buyer. I cannot be two people. It's ridiculous to be two people explicitly which try to do that. But It's.
1:24:27Elon MuskI guess the CEO hat would be answering questions about operationally about the company and buyer hack would be answering questions about the take Primus.
1:24:46Elon MuskI think some. Yeah. Just generally about what the status of the company, where things are.
1:25:00Elon MuskI'm sorry, could you clarify the question?
1:25:08Elon MuskYes,
1:25:14Elon MuskYes.
1:25:35Elon MuskI'm not sure I fully understand how to answer this question. You know, there's. There's generally. I mean in that board meeting, I do recall answering questions about the current status and progress of the company and I also recall answering questions about the potential idea of going.
1:25:56Elon MuskGoing.
1:26:26Elon MuskEssentially. Yes.
1:26:50Elon MuskSorry. It's okay. But thanks for offering.
1:27:13Elon MuskYes, I think so.
1:27:55Elon MuskAs wire.
1:28:07Elon MuskI don't think so.
1:28:23Elon MuskYes,
1:28:41Elon MuskYes, I believe so. Drive from. Yeah, yeah. I mean I'm not sure they're close in. Yeah.
1:28:55Elon MuskYes.
1:29:25Elon MuskOkay. I don't think so.
1:30:40Elon MuskMay I see the blog post? I. I think I. Here just to make sure that I'm.
1:30:51Elon MuskAs precise as possible.
1:31:15Elon MuskSa.
1:31:55Elon MuskRight. Yeah. So I think so this blog post was in the context of me as the buyer, if you will. Although, as as mentioned, I think it's sort of an important distinction that this take private is different from the vast majority of take privates in that.
1:32:19Elon MuskSorry. Yeah. The vast majority of take privates generally involve an attempt by the buyer to obtain a very large percentage of the company's stock by obtaining a loan or through other means.
1:32:40Elon MuskAnd this was not one of those. This was simply a desire to have. This was. This was, and I explicitly said this, the desire to have the same shareholding base but not be publicly traded.
1:32:56Elon MuskAnd so the notion of buying, in a sense would not necessarily be the same as it would typically be in a tape. Private.
1:33:18Elon MuskYeah, I still wrote this from the standpoint of a buyer in quotes.
1:33:28Elon MuskSorry, I'll speak now. And I still wrote this from the standpoint of a buyer.
1:33:57Elon MuskMy hope was that all shareholders would remain with the company even if we are not publicly traded.
1:34:12Elon MuskYes, that would be todd mar.
1:34:21Elon MuskThere may have been others, but I don't know who they would have been.
1:34:31Elon MuskHe. There's a good chance he did, but I don't know what contributions he made, if any.
1:36:33Elon MuskI mean I should be clear that. Okay,
1:36:58Elon MuskI don't recall any conversations.
1:37:07Elon MuskIt's possible there were some email exchanges, but not. Not of any subs.
1:37:19Elon MuskAlex.
1:37:44Elon MuskYes.
1:37:52Elon MuskYes.
1:38:32Elon MuskYet.
1:38:45Elon MuskYes.
1:38:57Elon MuskYes. It's like that's really bothered me actually, because it's bad grammar and obnoxious generally to use the thigh so frequently.
1:39:28Elon MuskYes.
1:39:36Elon MuskNo,
1:40:06Elon MuskI don't think. I don't think so. No. Council Yeah, I mean I generally write my own blogs, so it's not as though I think points worth making is like I've written many blogs over the years.
1:40:22Elon MuskI don't need somebody else to write something for me. And when I see something like the taking tells of private. I mean this is fundamentally. These are my. My words, you know, somebody's not putting words in my mouth,
1:40:37Elon MuskYou know, certainly getting suggestions on things, corrections, additions. This is fundamentally just a statement of the facts and I think quite an accurate one.
1:41:26Elon MuskWould be.
1:41:34Elon MuskThe erosion bloom. I think primarily, Steve, I think this did go past Todd Moran as company council as well. I'm not sure if everyone saw.
1:42:04Elon MuskLow.
1:45:02Elon MuskThe answer is very obvious. Tesla is in constant litigation. We are constantly sued for frivolous purposes. For example, this absurd 5,000 car per week thing which the judge just ruled against.
1:45:43Elon MuskWhich blog post are you referring to?
1:45:51Elon MuskI think we're in sort of a semantic debate here. I would defer to my council to.
1:46:20Elon MuskSa.
1:47:09Elon MuskDid he ever represent me personally independent of the company? I don't believe so.
1:50:15Elon MuskYeah. I mean, I can say like my, My recollection, my.
1:50:32Elon MuskIt's. I'm not without specifics to the. Whether it's privileged or not. My recollection is that Todd Moran was extremely rigorous about representing the company and not me as an individual, as buyer.
1:50:48Elon MuskIf you're. What you're getting at is are you concerned whether there was Varan representing me when he should have been representing the company? I do not think that is the case.
1:51:02Elon MuskHe is extremely ethical and throughout this process represented the company.
1:51:43Elon MuskNo, sorry, sa.
1:52:17Elon MuskYes, I think those. Yes,
1:52:28Elon MuskYes.
1:53:43Elon MuskSorry, where is that?
1:53:49Elon MuskYeah.
1:53:56Elon MuskYes,
1:54:11Elon MuskI think it is. Yes,
1:54:20Elon MuskSa.
1:55:06Elon MuskTo the best of my recollection, that is true.
1:55:16Elon MuskAll public statements related to the Trinity transaction.
1:55:33Elon MuskI would. I think it would be good to review those statements before answering.
1:55:48Elon MuskWe've reviewed a lot of statements.
1:55:56Elon MuskYeah, I mean, I think if there's documents that you have in mind, then. I mean, because we've also reviewed documents that are unrelated to a transaction, so then obviously that cannot be related to the transaction.
1:56:33Elon MuskYes, these are from the standpoint of a buyer. Although, as I explained and in fact, as I articulate in the blog post, this is not a buyer in any standard sense of the word.
1:56:47Elon MuskThis is more from the standpoint of wanting to have a more efficiently operated company and in the belief that it could be more efficiently operated as a private. So there's only a buyer in a very technical sense of the word.
1:57:16Elon MuskI mean, obviously I cannot. I am still CEO of the company. And so there is a double duty of what is right for the company. And then what does strike from the standpoint of what is here termed as a buyer, although it's not a buyer in any meaningful sense of the word, not a buyer in the sense of me acquiring shares.
1:58:00Elon MuskI would not. I would not try to claim that I'm perfectly able to separate and be in two minds. I mean, this is. One is human, you know, it is difficult to completely partition one's mind.
1:58:27Elon MuskYeah. I think it would be fair to say that aspirationally these were from the standpoint of a buyer, essentially I was trying to do the right thing from what perspective this was operated from.
1:58:42Elon MuskAt the same time, I'm also the CEO of the company. So, you know, it's far from certain that I was, in fact, I would not claim to be perfect in this regard.
1:58:57Elon MuskI think this is a very difficult thing to do, to wear two hats and to err. Is.
1:59:43Elon MuskThis hat analogy is really.
1:59:49Elon MuskIs there one capacity? Sure. Capacity. I just cannot get the picture of it. I have the picture of a hat and somebody, you know, having a hat on a hat is.
2:00:05Elon MuskThey might have like a very sort of visual perception of things.
2:00:12Elon MuskYeah, yeah.
2:00:31Elon MuskOh, sorry. Eight and. Yep. Yes, I think that is aspirationally accurate. I mean, it's certainly possible. I mean that that was certainly what I intended. That's certainly what I intended to believe, but is also possible that I made some mistakes here, you know, somewhere in the process.
2:01:20Elon MuskWell, I think it's important to, like, my motivations for doing this were at Least from my perspective, to enable Tesla to execute better over time. Because I felt that at SpaceX where we are privates, we're able to execute better than at Tesla where we are public.
2:01:42Elon MuskAnd I describe that in the blog. So if you asked me in either capacity did I think that there was strong merit to being private, I would have said yes.
2:02:16Elon MuskNot exactly. One of the things that we could have done would just be to delist. There's no counterparty.
2:02:30Elon MuskYes.
2:02:36Elon MuskFrom the taking Tesla private tweets for, you know, basically since I didn't know all of the ways that one could go private. So in order to explore these ways and to be able to do so without creating a selective disclosure issue, I felt I needed to talk to our major investors and to understand is there a path to being private that they would support, that they would think is a good idea?
2:03:12Elon MuskWould they be able to stay with the company? Because if they were not able to stay with the company, that's a big deal. I believe strongly in loyalty and if they've been loyal investors in Tesla and are unable to remain, that's a big factor if they wanted to.
2:03:32Elon MuskSo one of the considerations was why did we simply delist? No counterpointing. Yes.
2:03:56Elon MuskNo, no. I mean it's still, you know, at some point we, that that's still one of the options in the future. Just delisting.
2:04:37Elon MuskSam Teller is my chief of staff.
2:04:53Elon MuskDo you mean to set up a meeting or something or. Yeah, Sam did. I think Sam mentioned that. Yes, sir. I thought Yassir, I call Yasser of Arabia wanted to meet.
2:05:24Elon MuskYes,
2:05:31Elon MuskYes.
2:05:45Elon MuskNo, I was surprised there. I mean Yasera's tried to meet with me quite a lot over the past two years and we've had some meetings.
2:06:07Elon MuskBelieve he is the managing director or he's the head guy?
2:06:19Elon MuskYes, yes.
2:06:33Elon MuskFeels like okay, come eating the factory and so we met in the factory.
2:06:58Elon MuskSpecifically in July. I mean he might have sent me a text or something possible. No.
2:07:15Elon MuskYeah,
2:07:27Elon MuskYes. No,
2:07:40Elon MuskI think just verbally. I, I didn't think. I mean I think I was just really case of, you know.
2:08:04Elon MuskNope.
2:08:23Elon MuskI mean I thought this was going to be a non meeting place like another like relationship touching base meeting or something like that. Yeah, later.
2:08:43Elon MuskWhat time of day you mean? Or I think the 31st. Is that right? SA.
2:09:40Elon MuskYeah, yeah, not really but I know I've not seen it in this format before but normally it's just a line on my phone.
2:10:27Elon MuskYeah, that's why we put it in the subject the 6 6pm Yeah,
2:11:10Elon MuskIt's kind of amazing that. That it's referenced off of Little Greenwich. The French had a real fit about.
2:11:37Elon MuskAbout. Right. Yeah. I'm not sure if that's when the meeting actually occurred, but that certainly is what's referenced on the calendar. Yeah,
2:11:53Elon MuskThe factory. The car factory. Yes.
2:12:10Elon MuskYeah. I mean it's just a conference room in the. Yeah,
2:12:26Elon MuskPossibly. There's a lot of meetings in that culture.
2:12:35Elon MuskNo,
2:12:45Elon MuskI think I was at.
2:12:57Elon MuskI might have said hi, but I recall seeing them in the conference room. I might have said hi as they were going in or something.
2:13:12Elon MuskI think three.
2:13:19Elon MuskThere were three individuals. I don't know the other two, but I. I do know. Yes. Here.
2:13:45Elon MuskYeah.
2:14:00Elon MuskYes, correct.
2:14:19Elon MuskI think Sam Tiller. I mean. I mean, I know Sam Taylor was there. I'm not sure if he's there for. Not for the entire meeting.
2:14:38Elon MuskNow it's like Vegas in the factory. Can't even. Minus the fun part, but you cannot see. It's like you lose track of time.
2:14:57Elon MuskYes.
2:15:03Elon MuskYeah. Oh, phone maybe. Phone, yeah, sure. I probably have. My phone was with me, but I'm not sure. It might have. It's either charging at my desk or in my pocket usually.
2:15:21Elon MuskProbably it's fine. I don't know for sure.
2:15:34Elon MuskI think Yesir had some kind of tablet thing that shows an iPad or something else. Yeah, some sort of tablet device.
2:15:49Elon MuskMaybe. I'm not sure. I don't think so, but I don't. I'm not there. Watch for the other two. I do remember them like writing things down, but I'm not sure what they wrote.
2:16:13Elon MuskI'm not certain.
2:16:22Elon MuskNot that I'm aware.
2:16:33Elon MuskLiterally might have said hello as they walked in.
2:16:40Elon MuskYes.
2:16:55Elon MuskI don't remember everything about the meeting. And there's like pleasantries. People exchanged pleasantries. And then he was very excited to tell me that they had made a substantial investment in Tesla in the public markets.
2:17:16Elon MuskRight up to the absolute limit of just below 5%.
2:17:30Elon MuskThat I recall. Yes,
2:17:40Elon MuskThat's correct.
2:17:46Elon MuskYeah. I was price learners.
2:17:52Elon MuskThose look great. Thank you for being a shareholder. That's awesome. As I do anyone who places their funds in our trust.
2:18:15Elon MuskNo, I don't think so.
2:18:21Elon MuskThe hunk,
2:18:29Elon MuskHe. As I recall, he said he. That the only thing that was limiting them at 5% was the reporting requirement and they wish to have a much larger stake and wanted to help Tesla go private.
2:18:51Elon MuskWanted to take Tesla private, essentially. One. Yeah. Wanted to help take a test. Wanted to make it happen. Wanted to make Tesla the tech private happen. I told him I was interested in Tesla Company private.
2:19:07Elon MuskAnd he, but he volunteered that's, he volunteered that he wanted to, to take, he wanted to take as a private. And moreover that. And so I was like quite surprised to learn this.
2:19:26Elon MuskAnd, and, and he said that,
2:19:36Elon MuskYeah, like he said that he had always wanted to do this. And I was like, really? And I thought you had delegated this to Masa. And he said definitely not.
2:19:46Elon MuskIn fact, he would not want to do a take private through Masa because then they would have to pay a percentage to Masa and they did not want to do that.
2:19:59Elon MuskI was like, okay, well that was surprising to me because in prior meetings, which I assume we will get to in your questioning, I was either the mistaken impression that this, they had delegated this responsibility.
2:20:16Elon MuskTommaso, it's like, okay, okay, so that's quite exciting. Is there? I said, are you sure you want to do this? And he's like, definitely. And, and then said, well, is there, are there any other decision makers needed?
2:20:39Elon MuskHe says, no, that's the advantage of pif. I am the decision maker as long as the Crown Prince supports me. And he does. That's it. They're stung. I'm like, okay, that sounds great.
2:21:02Elon MuskLet us try to pursue this. That sounds like a very exciting thing to pursue. We should at least understand what is possible here.
2:21:20Elon MuskSure.
2:21:40Elon MuskTake private. Going private. This was mentioned several times.
2:21:51Elon MuskYes. I mean, he mentioned that he had invested 5%, he purchased 5% of the company already just on the open market and that the only thing that was inhibiting a higher ownership was the reporting requirements.
2:22:09Elon MuskHe had 4.99% and what wanted to go considerably higher, but did not want to do that without checking with me. And obviously this would create a splash because of the reporting requirement.
2:22:23Elon MuskAnd so. But that's. Their interest was much higher than 5% by a loss.
2:22:39Elon MuskYes, definitely. Now they were extremely explicit that they wanted to have a much larger stake in Tesla. Not a slightly larger stake, but a much larger stake. This is.
2:22:53Elon MuskNow this is pretty obvious because they need to figure out a plan for when oil runs out. And so they need to, they really want to figure out how they can be part of energy in the future, even when it is solar power and batteries and electric cars and that kind of thing.
2:23:17Elon MuskSo this is of fundamental strategic importance to them. From their standpoint, their ideal situation, if they could do it, would be total acquisition of Tesla.
2:23:34Elon MuskObviously.
2:23:45Elon MuskThis is not, this sort of investment is not merely a financial investment. This is something that is of a national security importance to them. It's not just A matter of getting some return on investment.
2:24:01Elon MuskThey need to figure out what the hell the country is going to do when they run out of oil.
2:24:15Elon MuskI mean, I don't want to, you know, guess what entirely what's in their minds. It's pretty obvious if you are in the position of Saudi Arabia that you need to find a solution for what the hell are you going to do when the oil runs out?
2:24:32Elon MuskObviously this is a very big deal, you know, they'll run out of money, they're very dependent on oil. This is not a good situation. So they got to figure out something.
2:24:48Elon MuskAnd energy, there's currently a big provider of energy in the form of oil and natural gas. So from their standpoint, continuing in the energy business, albeit renewable, seemed like a good thing.
2:25:05Elon MuskAnd there's a wide range of things they could do. They've got a lot of desert, a lot of sun, so they could put a lot of solar panels up and then transport that energy to ultra high voltage electrical connections to other parts of the world.
2:25:24Elon MuskThey could have electric car factory or battery factory. These things are all quite important. Now these things don't come with just a financial investment in a company. You have to really have a much bigger stake in the company for that to be the case.
2:25:45Elon MuskNot necessarily controlling, but certainly much more influential in 5%. But aspirationally, if they had their druthers and you're in there aspirationally they would like a controlling stake. But this would obviously generate concern on a number of levels.
2:26:12Elon MuskThis is strategically obvious.
2:26:21Elon MuskThey would not say something like that to me directly, but it is strategically obvious.
2:26:38Elon MuskHardly at all.
2:26:52Elon MuskI think take private. I'm not certain, but I think take private. And if I say like obviously like in a typical take private, as you know there is a very large stake that is acquired by the entity taking things private.
2:27:17Elon MuskFor example, in the case of Dell, that was an acquisition of, I think about something on the order of 80% of the non Dell shareholders or something like that.
2:27:28Elon MuskThat is a typical take private. So is an acquisition of a super majority, if not all of the outstanding shares of the company. That would be the typical template for a take private.
2:27:48Elon MuskNow in my mind I was like, hell no, I don't want to do that. I want to retain all the shareholders we have right now up to anyone who doesn't.
2:27:59Elon MuskAs long as they want to be in the company, I want to have them be in the company. It should be like a free choice. I don't like this whole squeeze out thing that's like not good.
2:28:08Elon MuskSo so in my mind I was like, you know, maybe there's 20, 25% of shareholders would not want to be in Tesla as a private company. And then given that the assumed template in a take private would be more on the order of triple that number.
2:28:36Elon MuskCertainly I would not be selling my shares in either way, but they would be thinking more on the order of potentially 80%. That is effectively a 3x coverage of what's necessary to take private.
2:28:48Elon MuskSo if you effectively have a threefold O subscription, assuming all the standard elements of a take private, this is plenty of coverage to make a statement like funding secured.
2:29:12Elon MuskYes,
2:29:20Elon MuskTurme,
2:29:40Elon MuskI think, I think I said that I would like to retain.
2:29:50Elon MuskOur current shareholder base. That would be preferable to me like as as many shareholders as possible I'd like to retain in a take private.
2:30:05Elon MuskAnd this would also be something that would make it obviously easier from their standpoint, from a capital standpoint. But that was after they said the take private. Like I was, I was like basically mitigating the net the capital needs required for take private, whereas normally they would think, okay, maybe you need to acquire 80% of shares.
2:30:25Elon MuskIn my opinion it's probably closer to 20, at most 30%, probably something on the order of 25%. So easier thing than what they, they were advocating something in their mind.
2:30:41Elon MuskIt would have had to have been a standard take private. And I was trying to say, like, actually I think it's going to be considerably easier than what you're talking about because I don't think we will need to acquire 80% of the ships.
2:31:00Elon MuskNo, they were just talking about a standard take private which would imply that. No, but if you say take private and do not have a modifier, then it's reasonable to assume standard.
2:31:26Elon MuskNo,
2:31:33Elon MuskOnly there's an implied dollar amount in the generalities associated with percentage percentages. You know, there's an implied dollar amount. Obviously any take private where you're acquiring a bunch of shares would have to have some reasonable premium associated with it.
2:31:51Elon MuskThe end would have like the standard template, in the absence of modifiers, would be acquisition of almost all of the outstanding shares and some premium to pay to some acquisition premium essentially.
2:32:17Elon MuskSo implicit in that is were far higher numbers than I thought would be necessary in a tape challenge. SA.
2:33:11Elon MuskI think I made that comment after. I mean, he said he wanted to do the take private and then I said that I think the take private sector is going to be easier than you realize, because I think most investors will continue on as shareholders.
2:33:29Elon MuskI'm not certain if I said that, but I think I said that, but that was after they said we want to do the take private, which would have implied 80%.
2:33:39Elon MuskAnd what I was trying to say was this take private that we're talking about here is easier than you realize. Most likely.
2:33:52Elon MuskNo, I think, I'm pretty sure I said that most existing shareholders would remain with the company. That was my belief at the time. And he had some sort of quite detailed list of shareholders.
2:34:08Elon MuskSo he was aware of what most shareholders would mean. And he had the whole cap, at least the public available capitalization table of the company. So he knew what I was talking about.
2:34:33Elon MuskYes,
2:34:44Elon MuskYes, that's what I thought would be likely. Yes,
2:34:55Elon MuskYes.
2:35:10Elon MuskI was aware that Fidelity is an investor in SpaceX. I mean Fidelity, yes. The idea that I had in mind was like, can we get to a structure similar to SpaceX where there's considerably less overhead?
2:35:29Elon MuskWe don't have massive. And Fidelity, I knew, as was an investor in SpaceX and T. Rowe and Bailey had both requested to be investors in SpaceX and they are, I believe, the three largest institutional shareholders of Tesla.
2:35:56Elon MuskAnd I assume that if those three were interested, one had actually invested, the other two wanted to. And that means probably that sentiment is widespread among institutional investors that it would most likely enable an easier take private than people would imagine.
2:36:22Elon MuskIn SpaceX. So Tiro, Bailey and Fidelity, I think, are the three largest institutional shareholders in Tesla. Fidelity is already a shareholder in SpaceX. Bailey and T Road requested two shareholders in SpaceX.
2:36:39Elon MuskSo clearly they're comfortable with that structure. And so I thought, well, they would also be comfortable with than Tesla taking on a similar structure.
2:37:07Elon MuskI was aware that they had, particularly with certain funds, had restrictions on public ownership. I came to learn later when I spoke to them that the restrictions were more arduous than I realized that I could not speak to them without creating a selective disclosure issue.
2:37:29Elon MuskSo I had to get the. This news had to be, you know, made broadly. People had to be broadly aware of this news. I could not have a conversation with all of these investors or, or some of them and of course it would occur sequentially.
2:37:44Elon MuskCould not talk to them all simultaneously. Then there had to be transparency here. There had to be some awareness of a take private in order for me to have these conversations.
2:38:01Elon MuskSo I subsequently. We're getting to that. We're not there yet. But I subsequently learned it was much harder for them to maintain an ownership stake in a private company than I had anticipated.
2:38:38Elon MuskNot specific numbers. No, no. But of course in an. In any kind of Acquisition like this at premium is standard. There'll be. There's going to be a non zero premium.
2:39:00Elon MuskI think it's. No, but I think everyone knows that the exact premium is unknowable until there is a negotiation. But that there is a probable premium on the order of 20%.
2:39:22Elon MuskNo, but they would not have been under the assumption that there would be no premium nor that there would be an egregious premium. And so a reasonable expectation in the absence of a specific number would be 20%.
2:39:37Elon MuskSo typical number for you know, take privates or acquisitions is 20.20ish percent.
2:40:03Elon MuskNo,
2:40:08Elon MuskThere. No, no, I haven't. I wasn't aware of it. I don't really necessarily base, you know, things I do on prior precedent.
2:40:39Elon MuskSorry. At that meeting with the pif.
2:40:47Elon MuskNo.
2:40:54Elon MuskYes.
2:41:01Elon MuskYes. It sounds like a disease, but yes.
2:41:11Elon MuskGot cepheus. Oh no. That's tragic.
2:41:20Elon MuskNo, I don't think so. The word Sephius didn't come up, but it's possible. No, I don't think so. I don't think any restrictions on percentage came up. I don't think the notion of restrictions on percentage of ownership came up during that meeting.
2:41:48Elon MuskYes,
2:41:53Elon MuskYes, sir.
2:42:04Elon MuskI mean towards the. Maybe towards the end I think, yeah, I'm interested in establishing a strategic relationship with, between T and Saudi Arabia, particularly with Knight Awards. Establishing a strategic relationship possibly relating to a factory or some large Tesla presence of some kind in Saudi Arabia.
2:42:57Elon MuskNo.
2:43:15Elon MuskTrust.
2:43:33Elon MuskAnd I'm not sure what I said exactly. I would have probably said something along the lines of what I just said, which is that we're open to doing something provided the time frame is not in the near term.
2:43:58Elon MuskAnd then I thought, well, there's going to be. I thought the vast majority of existing investors want to retain their stake and then we would find a vehicle for small investors to participate.
2:44:15Elon MuskThat latter part was a fundamental misunderstanding that I just did not know. And yeah, I thought there'd be some way to retain small investors, but there isn't. And obviously this is not proposal of today's testimony.
2:44:38Elon MuskBut I do think that some mechanism for this would be advisable in the regulatory structure. So for this meeting. But it's I think some. Something where they're protected by a fiduciary.
2:44:51Elon MuskLike there's, there's like a lot of the wealth creation that occurs occurs when companies are private and. But small investors are only able to access that when the companies are public.
2:45:03Elon MuskAnd by that time most of the wealth creation has occurred and this is exacerbating the wealth divide this is not good. So. And I certainly understand the intentions behind the original regulations.
2:45:17Elon MuskIt's like we do not want swindling. There's like anti swindling regulations. These are good. We do not want people being conned out of their money. This is bad. But if, think if there's perhaps a trusted fiduciary like a Fidelity or something like that and very plain language disclosures, then I think public, like private company money should be more accessible to, you know, investors who are not already wealthy.
2:45:51Elon MuskThat million dollar limit is tricky. Sorry for to digress. My apologies.
2:46:14Elon MuskNow he was just saying like he wants to take company private. Let's do it, let's go. And he was like, and he was clear to me like this, he's been like yearning to do this for two years.
2:46:22Elon MuskI was like, really? Like, okay, I thought you delegated it to Masa. I was like, no, we wanted to do it and we've always wanted to do it and can we just do it?
2:46:31Elon MuskI was like, okay, we can investigate it.
2:46:45Elon MuskNo, not specific percentages, but he was well aware of the cap table because he had it in front of him. Sure.
2:47:01Elon MuskNo, but for sure it is implicit. Like you take private. They are not assuming that all those people are going to. They, they were, it was clear that they were not under the assumption that the other investors would participate.
2:47:16Elon MuskThey were not under the assumption or that they were under the assumption that most of the other investors would not participate.
2:47:27Elon MuskYes,
2:47:34Elon MuskYes, that's correct.
2:47:46Elon MuskMy understanding impression was that they thought there would be much more capital required and they were prepared to provide it than was actually needed. In my mind, I thought they thought a lot of capital would be needed and they would provide it much more than I thought the capital would be needed.
2:48:09Elon MuskThat was my, in my mind, they had effectively oversubscribed the deal. In order to take Tesla private. They were prepared to put a lot more money in than I thought was actually necessary.
2:48:29Elon MuskNo, but in the absence of that, one would assume that their template would be a standard take private, which would certainly imply buying out those investors.
2:48:44Elon MuskNo specific premium. But they're also aware that there would be a premium.
2:48:57Elon MuskNo,
2:49:03Elon MuskThey were pretty clear. They wanted me to stay running the company. Yeah. So, okay,
2:49:19Elon MuskYeah, I mean they're definitely gonna leverage a larger investment into a more insistence on doing things in Saudi Arabia. That was clear.
2:49:36Elon MuskYou know, they weren't hard edged about it. It wasn't like, you must do this or you must do that or. And they were very, I would say they were like pretty clear that they wanted me to stay in control of the company and run the company, and that was very important to them.
2:49:52Elon MuskThey wouldn't do anything, want to do anything where I would leave the company or. They were very flattering of me personally and they said like, that they really wouldn't want to do this if I was not very enthusiastic about it.
2:50:06Elon MuskSaying lots of nice things. So. And then like I said, I try to say, like, look, I think actually going to take less money than you realize, because I think what most of these investors are going to stay with the company and they're like, okay, that's cool.
2:50:28Elon MuskThey were just pretty much cool with anything as far as I could gather. They're just looking for help transitioning their country to a different economy.
2:50:53Elon MuskThis is sort of guess. No, this is sort of guesswork. I mean, this is implicit. This is implicit, you know, like, like, because they clearly said it's very important for them to have, like, they articulated the strategic rationale, the.
2:51:06Elon MuskThat that is very, very obvious that they need. They need to transition to something beyond oil. They articulate that many times in prior meetings and, you know, it's dead nuts obvious.
2:51:16Elon MuskSo they're just like, they want help in making that transition. And then it's like, you know, they said they really want the factory in Saudi Arabia. And so if we get to the dinner with Mahsa afterwards, like, they also have some funny things in that dinner because Masa was insisting nobody put it.
2:51:42Elon MuskMasa, what is. I think he just had like a dinner with Modi or something and he was like, you know, you got to put a factory in India. Like your investors want me to put a.
2:51:54Elon MuskYeah, yeah, yeah.
2:52:19Elon MuskNo,
2:52:25Elon MuskI mean I was given a red bull.
2:52:31Elon MuskAll.
2:52:40Elon MuskSure.
2:53:02Elon MuskYes.
2:53:11Elon MuskI think maybe a third to half the way through or something like that. I'm not certain exactly.
2:53:24Elon MuskNo, I can't pin the exact timing of. I suspect he would be able to answer that more precisely, but I cannot recall the exact point at which it wasn't towards the very end and it wasn't towards the very beginning.
2:53:48Elon MuskI don't recall though.
2:53:58Elon MuskI'm not sure. I might have. I'm not sure. I don't recall doing so. But it's possible.
2:54:12Elon MuskWell, I think, I don't. I'm not sure if I, if I asked that he joined or not as, as the reason that he joined, but I would have certainly at some point asked that he join once the subject of investment came up.
2:54:37Elon MuskSorry.
2:54:48Elon MuskI think that would have probably been. If he wasn't there already. I would have requested that he join upon learning that the PAF had made a multi billion dollar investment into test already.
2:55:11Elon MuskThat's correct.
2:55:19Elon MuskI don't think he, he would have perhaps had his phone, but I don't think anything else.
2:55:43Elon MuskI think I was briefly with Yasir alone. I just as, as he was like leaving the conference room, I think, but just for like 10 seconds or something like that.
2:56:01Elon MuskI did not notice it. Yeah.
2:56:13Elon MuskNo. Oh, I didn't. I don't know if they did. I did not notice them doing it if they did.
2:56:28Elon MuskI think about 40 minutes is.
2:56:44Elon MuskNo, I don't. Wait. I don't think so. I don't think so. I don't recall getting anything.
2:56:54Elon MuskWell, every now and again people give me things, but I don't. I usually just put them on my desk and don't read them. I mean usually because it's like some sort of like generic document.
2:57:03Elon MuskIt was. You didn't give me anything. That was like. I don't think he gave me anything and I'm. But I'm quite sure he did not give me anything that was highly sensitive.
2:57:19Elon MuskNo, I have a business card, so I don't know.
2:57:26Elon MuskDuring the meeting.
2:57:38Elon MuskNo,
2:57:50Elon MuskNo, during the.
2:57:59Elon MuskYeah,
2:58:06Elon MuskI don't think so.
2:58:21Elon MuskNot during that meeting.
2:58:41Elon MuskSure.
2:58:48Elon MuskThe,
2:58:53Elon MuskThe article essentially as mentioned was that they disclosed that they had made a multi billion dollar investment in Tesla up to the limit of 5%. This was new information to me and that the only reason had not gone above 5% was the disclosure constraint.
2:59:14Elon MuskAnd they'd obviously done this without any written agreement or without any requirements or anything at all. And they had done this. They had at one point, I think in prior Meetings said that they would invest in Tesla.
2:59:32Elon MuskAnd I was like, okay. And they said, okay. They did what they said they would do. Okay. These are people where you can take their word. They say they're going to do something, they're going to do it.
2:59:50Elon MuskSo they were extremely clear that they wanted to take Tesla private, that I could set the terms essentially any reasonable terms I could set, that they had been interested in taking Tesla private for two years.
3:00:06Elon MuskThey corrected my misunderstanding that this had been delegated to MASA and said for two years they wanted to take Tesla private. They had invested billions of dollars with no agreement of any kind, just as a good faith gesture to show that they are serious and if I would just say what I wanted to do, they would do it.
3:00:36Elon MuskSo there was no question in my mind whatsoever that the funding was secure for this deal.
3:00:50Elon MuskRight, that's, that was the closing sentiment.
3:01:02Elon MuskI recall that they wanted, they were unequivocal and their desire to take Tesla private, that they were willing to take essentially whatever terms I asked for within the bounds of reason that a larger investment would require a larger strategic involvement, meaning factories and that kind of thing.
3:01:37Elon MuskAnd so it's really just a question of what do you want to, what they're just saying, like, how do you want us to proceed? We want to do it, let's do it.
3:01:50Elon MuskYes, that's correct.
3:02:03Elon MuskHe said, just tell it. He, he said, tell me how you want to do it and we'll do it. So not whatever terms, but tell me how you want to do it.
3:02:15Elon MuskI think had some language and like, provided they're reasonable, we will be fine with it. So there's no, you know, obviously it can't be like let's go public at $8,000 a share, okay, not reasonable.
3:02:29Elon MuskThis would not be reasonable within the bounds of a reasonable take private transaction. They were extremely certain they wanted to do it and moreover had been certain for two years.
3:02:42Elon MuskThis was no question.
3:02:48Elon MuskSorry.
3:02:53Elon MuskSo, you know, obviously here you have an extremely wealthy find, arguably the wealthiest fund in the world. They had, with no conditions, no effort at all, made a multi billion dollar investment up to the 5% point, explicitly constrained only by the reporting requirement.
3:03:13Elon MuskThat was, there was nothing else holding them back from, of investing more.
3:03:20Elon MuskSo this was really, it was up to me do I want to do this take private or not. If I want to do it, they will support it.
3:03:40Elon MuskThey, the onus was on me to say how I wanted to, to do this deal. So I just needed to tell them what, what they needed to do and they would do it.
3:04:07Elon MuskThat is almost explicit, I would say. I mean, meaning. It's like, I don't know the. That I can say the exact words, but that is the. That is the exact meaning,
3:04:26Elon MuskI believe. So it was something like that. Yes. It just. Just that it's not. It can't be like $8,000 a share. It can't be, you know, something completely crazy and outside of the bounds of.
3:04:39Elon MuskOf a. Of a take normal take privates.
3:04:55Elon MuskHe said, like, tell me how you want to do it and we'll do. And there was just some, like. I think it was reasonable, but may have been something.
3:05:08Elon MuskIt may have been a synonym of reasonable. But look, tell me how you want to do it. As long as the terms are reasonable. I don't know if it was exactly the word reasonable, but it was.
3:05:18Elon MuskIf not something. It was something of equivalent meaning. And we'll do it.
3:05:30Elon MuskNo, no, I know.
3:05:51Elon MuskThe next step would be for me to tell them what terms I wanted.
3:05:59Elon MuskNo, but they're very clear that it was up to me to. It was very clear to me, this deal is done. Tell us what terms you want and this deal is done on your terms, provided those terms are not outrageous in another way to say it, they didn't use the word not outrageous, but essentially by.
3:06:25Elon MuskThose terms are not completely out of bed with what an allay private would be. This is a done deal.
3:06:35Elon MuskYes, but they're pretty clear that this was not like some narrow definition of reasonable. Essentially, like as long as they don't feel like they're getting ripped off, they would be fine.
3:06:46Elon MuskThat's it.
3:06:54Elon MuskNo, no, it would just be unless these terms are unreasonable. There's not like some fancy definition of reasonable. Unless. Unless as long as the terms are not a ripoff and are fair and under the normal, you know, structure of as long as they're not out of bounds of a normal take private, this is a done deal.
3:07:20Elon MuskNo, they were telling me explicitly in the meeting that the terms were. I could have whatever terms I wanted, provided they're not crazy.
3:07:38Elon MuskNo, no, I mean, it was very clear. That's it. They wanted this to happen. The only thing that would inhibit this is if Ida had demanded crazy terms or unreasonable terms.
3:07:49Elon MuskOtherwise it's a done deal case. Close.
3:08:02Elon MuskNo, no. It's important to bear in mind that they had already invested billions of dollars. They spoke with their money, okay? And if somebody invests billions of dollars up to the 5% point, and the only thing stopping them is the reporting number, not anything else.
3:08:24Elon MuskAnd obviously there wasn't even a verbal or written deal, they just did it. These people mean what they say. They have the resources, you can take them at their word, they're going to do it.
3:08:38Elon MuskThey really wanted to increase their investment in Tesla by whatever means necessary.
3:09:03Elon MuskSa.
3:09:51Elon MuskI mean, I think the right way to view this is that this was unequivocally a done deal, provided I did not come back with outrageous terms. Yes, yes. So as long as I didn't demand like something egregious is a done deal.
3:10:20Elon MuskWell, I, presumably they would decide, but I mean, there is a, there's a natural framework for whether a take private is egregious in the price premium or not. I mean, really, it's just if I say, for example, demanded all shares, I must vote all shares, they may have objected to that.
3:10:39Elon MuskThat is not something I would have required. But that could have been an inhibitor. If I had said that that's, you know, there must be like some huge sum of money that comes to me personally as a result of that.
3:10:56Elon MuskThat would be egregious. If I'd said instead of a, of a sort of typical premium on a take private acquisition, that instead of a 20%, it was 200%, that would be egregious.
3:11:11Elon MuskBut anything within the framework of a normal take private would not be considered egregious.
3:11:20Elon MuskNo,
3:11:48Elon MuskNo, they would have been fine with that when they already have 5%. So they have 5% of public markets with no terms and conditions at all. And they were explicit that that 5 cent limit was just due to reporting requirements, not due to anything else.
3:12:04Elon MuskSo let's say if reporting requirements in the US that started at probably 10%, they would have acquired 10% in the public markets. Something on that order.
3:12:29Elon MuskI do not believe there was any, any minimum. They already had spoken with their funds and invested 5%.
3:12:50Elon MuskI think. No, because they already had a smaller stake in Tesla and they were clear that the only thing that inhibited their stake from being more than 5% was the reporting of climate.
3:13:00Elon MuskSo they're clearly more than happy to have a larger stake in the company. And it just happens that US reporting requirements $5%. So that's what they would. They're clearly happy to have 5% with no terms and conditions, no requirements.
3:13:16Elon MuskNot.
3:13:37Elon MuskYes,
3:14:03Elon MuskNo. As I said, I spoke, I think I spoke to Yassir for maybe 10 seconds as he was leaving the conference room. And the substance of that conversation was just him repeating, let us know how you want to do this, we want to do this, or something kind of Fact.
3:14:28Elon MuskYes. I said I'll get back to you there.
3:14:56Elon MuskI think. I think he did.
3:15:06Elon MuskI don't think so.
3:15:15Elon MuskYeah,
3:15:24Elon MuskYeah, I. I heard they saw. I heard. Had heard that.
3:15:32Elon MuskYeah. That. That like at some point that they had. He'd give them a tour. Yeah. No,
3:15:45Elon MuskI think council. Council.
3:16:00Elon MuskDon't recall any discussions there.
3:16:24Elon MuskI don't recall. I think I may have had some brief conversations. I don't recall right now what those conversations were. I might. I might have had some, but I probably had some, but I didn't Oracle substance of them.
3:16:47Elon MuskYeah, of course.
3:16:55Elon MuskYeah. I mean, I do not recall anything substantive. I think we certainly had conversations of some sort, but I don't recall anything substantive. Apart from the obvious.
3:17:17Elon MuskI think something to that effect.
3:17:37Elon MuskYes. With Egon Durbin on Monday night, I think it would have been before the Tuesday tweet.
3:18:30Elon MuskI recall having some brief conversations with. With Sam, maybe Deepak briefly. Look, pretty brief. Just, you know,
3:18:47Elon MuskI think both of them. Not sure.
3:18:58Elon MuskYeah. On that night.
3:19:19Elon MuskWell, there was a call with Steve Rosenblum and he's over like at any point subsequent. Sorry, what super slice. What data are you referring to?
3:19:50Elon MuskI don't think so. It's possible, but I don't recall SA.
3:20:22Elon MuskI don't recall that now.
3:20:59Elon MuskIs it which state.
3:21:06Elon MuskThat would be helpful. If there's some documents that would be. That help would help anchor specific dates. That would be helpful.
3:21:52Elon MuskMy recollections are a conversation with Steve Rosenblum, a conversation with. Which is on the Saturday, I believe a conversation with Egon Durbin on the Monday before the tweet. I think I talked to Michael Dell on a Saturday as well, but did not mention anything specific about the Saudi.
3:22:11Elon MuskI was just really asking him about did he find that being private was good like that? Did he think that. Did he regret going private? Did he think it was a good idea?
3:22:27Elon MuskYeah. Sa.
3:23:03Elon MuskHe was the legal counsel that Michael Dell used in the Tate crime.
3:23:18Elon MuskYes.
3:23:24Elon MuskSilver lake.
3:23:33Elon MuskJust a conversation. If.
3:24:07Elon MuskI probably had a few conversations with Sam discussing the pros and cons of a Take Private and a larger Saudi investment.
3:24:24Elon MuskI don't recall having any conversations, but it might have been. There might have been a few. I don't recall anything substantive.
3:24:43Elon MuskThere.
3:25:20Elon MuskIt's possible that there was some tech that he sent me a text or something, but I don't think I had a phone call.
3:25:28Elon MuskI do not recall certainly anything substantive.
3:25:39Elon MuskPossibly may have, but I do not think it was substantive. I don't think so.
3:26:15Elon MuskNo.
3:26:30Elon MuskNo.
3:26:48Elon MuskSorry about at what period of Time,
3:27:26Elon MuskYes,
3:29:00Elon MuskSorry, the second issue.
3:29:40Elon MuskYeah, I've not seen in this format before, but. Yes, yes, yes,
3:30:18Elon MuskYes, it is,
3:30:34Elon MuskYes.
3:30:52Elon MuskPardon, what? Sorry.
3:31:08Elon MuskOh, yeah, yeah, yeah, of course.
3:31:22Elon MuskYes.
3:31:30Elon MuskThis was some months earlier this year, I think we met at SpaceX and I said, you know, I've always wanted to consider taking Tesla private, but they, that was it, pretty much.
3:31:52Elon MuskAnd he said, well, if you're ever thinking about doing that seriously, you should give me a call.
3:32:05Elon MuskYeah, I mean he said a bunch of nice things about me and the companies and that's it. And he talked a little bit about his prior experience with take privates and like I should give him a call if I ever think about this seriously.
3:32:33Elon MuskI think in that meeting, that first meeting that I had with him earlier this year, he gave me some kind of like document that was like, these are people who would be interested in, I think in a take private we were somewhat generic, you know, like here are a bunch of people with money that he knows that would be interested in potential take private and something that he'd be happy to support if we wanted to go in that direction.
3:33:04Elon MuskNo, specific to Tesla. Yes, I mean I didn't consider it to be especially, I mean it's like here are a bunch of people I know that have tons of money and I would be interested in helping.
3:33:25Elon MuskHe, he thinks would be interested in a take private situation. Like, but I don't consider that to be of like particular note because. Sure, you know, I, I kind of already knew that.
3:33:44Elon MuskNo, that was his opinion.
3:34:07Elon MuskNo in person meetings, don't think there were any calls. It's possible that they were kind of like at some touch base, texts or emails sent, but nothing substantive.
3:34:29Elon MuskYeah, sa.
3:34:57Elon MuskYeah, that's about right.
3:35:03Elon MuskI did,
3:35:08Elon MuskI told him about the, that the Saudis wanted to take Tesla private, that they were super supportive, like they wanted to do this deal, that I could pretty much dictate the terms and.
3:35:29Elon MuskBut I did say that my preference would be to have a broader investor base and not have too much of us, not have that size, be too large of a shareholder.
3:35:46Elon MuskAnd I think I actually did say like, I think, you know, maybe something on the order of 15%, maybe up to 20% would be okay, but from my standpoint, not from theirs.
3:35:58Elon MuskThis is from just purely from my standpoint and that. But I totally gonna, I think, look, I think most of our investors are going to remain in the company and so, but what does he think about bringing other investors in that to have a more diversified investor base so that there wouldn't be excessive influence from any one investor.
3:36:29Elon MuskHe said, absolutely, there's a lot of interest and he's confident that there are many others that would step up and join this take private.
3:36:45Elon MuskI don't, I don't think so, but he did not mention it. So this, he was going. I, I think he was going entirely on the basis of the people that he knew and that had been, say, part of the Dell Take Private and, and other transactions that he had been involved in.
3:37:03Elon MuskSo he, I don't know if he had conversations with them about it, but, but he did not convey that he had. He did convey that he was confident that there would be many other investors who would be interested in participating in a take Private and that was later borne out when they were asked, when those investors were asked, I believe every one of them said yes.
3:37:39Elon MuskNo, he was just very supportive. And it's like I said, if you want this, like, this is up to me. If I want this done, it'll be done.
3:37:57Elon MuskNo, it's possible. He signed something before the meeting that we had at SpaceX, but I didn't know there was. No, I don't, I didn't personally sign anything with him, but, but obviously he's someone who is.
3:38:12Elon MuskConfidence can be trusted.
3:38:22Elon MuskYeah, actually I did. It's a good question because his initial assumption was more along the lines of the, the Dell deal, which is like essentially his, his assumption was more along the standard template of a, of a take private where all of the investors besides me, or almost all would be bought out.
3:38:48Elon MuskAnd, and I took pains to emphasize that this is not the, which is not what I wanted. In fact, he, I think he said so much the extent of, like, you know, well, there will be a squeeze out of small investors.
3:39:01Elon MuskLike, I do not want a squeeze out. This is, I don't want anyone being forced to sell. This is not what I want. I'm just trying to execute, find a way to execute better.
3:39:11Elon MuskThat's. This is not about trying to increase my ownership in the company. I don't care if there's zero change in my ownership, but I need to build the cars and scale this company.
3:39:20Elon MuskI need to do so with the minimum distraction and this seems like it might be a good way to do that. And so he was, he was a bit, I think, taken aback by that, sort of surprising.
3:39:32Elon MuskI think he said, well, that's a noble, that's a noble principle. I was like, well, I was trying to get things done here. I'm trying to be useful. And I said, like, I'VE got this situation in SpaceX which is very little overhead position does not involve lots of difficult short term optimization pressure and that kind of thing.
3:40:01Elon MuskAnd you know, we don't have all these like class action lawsuits like every time the stock moves they assume correlation is causation and then file a bloody lawsuit.
3:40:45Elon MuskNo,
3:40:58Elon MuskNo, he, he, I actually it was like he said well as I recall he said well that's going to make it a lot easier if lots of investors remain.
3:41:08Elon MuskThat's going to be a lot easier than what was done with Dell. And, and he said it actually means that you may actually need less capital than Dell, ironically, despite being a more valuable company than was required in the Dell Dell transaction.
3:41:26Elon MuskIf, if. Because I told him I believe most, if not all of our major investors would or would retain their ownership and I thought that most investors, not even the large ones but the small ones too would retain their ownership.
3:41:46Elon MuskI see. You said, well in that case this is really going to be. Even though it is nominally a very large take private on a dollar value, the actual amount of capital needed to take it private may be relatively small compared to other deals.
3:42:13Elon MuskLarge and shareholders in general. The concern of like can non high net worth small retail investors remain with the company was not raised. This was so, this was, you know, in, in, in terms of Ms.
3:42:36Elon MuskYou know and my councils advised me like don't get into mistakes and everything but like a fundamental misunderstanding that I had was that there'd be some means of retaining the small shareholders.
3:42:50Elon MuskThat was a fundamental misunderstanding on my part.
3:43:13Elon MuskNo,
3:43:21Elon MuskThere.
3:43:39Elon MuskI don't want to misremember this but I think it was the Saturday before the Tuesday tweet. If I am not misre. Is that correct? I'm not sure exactly.
3:44:26Elon MuskYes. As a lead or co lead counsel on a potential take private on the advice of Michael Dell I had actually talked to Steve Rosebud I think almost two years ago.
3:44:41Elon MuskThat's what I had had a brief conversation with.
3:45:01Elon MuskSa.
3:45:52Elon MuskI'm sorry, the first part is.
3:46:18Elon MuskOn Friday when I wrote the email,
3:46:23Elon MuskI think it was a Friday.
3:46:35Elon MuskI'm not sure what I. Oh actually maybe it was a Wednesday instead. Yeah. Essentially the point at which I decided to make the offer was when I sent them, I'm going to say make a decision and then I take action.
3:47:11Elon MuskI believe so.
3:47:16Elon MuskYes.
3:47:23Elon MuskNo.
3:47:43Elon MuskOh yeah.
3:47:49Elon MuskI mean I. The part of what would inform my decision for any potential take traffic would be the result of how the market would react to the earnings call if, if the price went stratospheric then a take private would not be feasible.
3:48:16Elon MuskYeah. And did increase quite a lot, but not to a degree that would make a type take private, you know, impossible or on at too high at like some crazy price.
3:48:44Elon MuskWell, if, if the, if, if, if there was a very big spike in the stock, I don't know, like let's say the Stock went to $500 or something crazy or went into like just a very steep day over day change, then it's just not realistic to do any kind of take private transaction.
3:49:12Elon MuskBecause people would want to see is this, where does the steep increase level off? Where does it stop? How you know, like we couldn't be a, we couldn't be if there were times in Tesla's history where we've had these quite big spikes in the value of the company, including times when I thought the value of the company was really the share price was way too high and I said that publicly and I thought this could have been one of those times and it wouldn't be reasonable to expect a take private take to take place if there was a premium on a spike.
3:49:53Elon MuskLike if, if, if, if the stock spiked and on top of that you had a premium, then you've got like that, that wouldn't be feasible.
3:50:07Elon MuskOr anyone really like. No, I, it would, it would, it would exceed the bounds of reasonability. So you know, if the stock had spiked say 50% instead of 15% then it would not have been I think viable to consider take private.
3:50:37Elon MuskYes,
3:50:49Elon MuskThere.
3:51:08Elon MuskCorrect. That's correct.
3:51:25Elon MuskThat was the biggest factor. I'm there, I mean, I mean there's just generally, I think it's good to sort of sleep on these decisions, you know, and, and it's hard to say like, you know, in like the sort of like a, in our minds kind of the, the kind of neural network that is our brain, what feels like the right decision, what seems like the right judgment.
3:51:54Elon MuskAnd there are many, often many small factors that weigh into ultimately a decision and it's difficult to say exactly what led to that decision. Therein lies judgment.
3:52:27Elon MuskYes, yes, definitely. I mean like as I said, if there's, if there'd been some massive jump, it would have not been real realistic or at least at that time it would have at least that's not to say that they wouldn't that a take private was off the table, but we would have to wait for the spike to subside.
3:53:31Elon MuskWell, I mean, I think silly, like what level of just since I had not done a take private before, I mean it's sort Of I knew there would be some overhead like there would be necessarily a short term spike in overhead of managing a take private.
3:53:59Elon MuskAnd that was a factor in how risky is it going to how much is going to affect our short term profit performance and will it be create too much of a distraction such that we would not achieve our targets of being cash flow positive and at least slightly profitable.
3:54:20Elon MuskIn Q3 and Q4 that was a big concern. So I certainly thought that this is something we need to decide quickly or not at all or quickly or postponed to some point past the next few quarters which are pivotal importance.
3:54:50Elon MuskI mean I had that Red Bull so I am, I've got a lot of energy. Yeah, sure.
3:55:06Elon MuskNo, I think those are. I mean I'm really trying to think hard about and make sure I give you as accurate an answer as possible. I think it's very important to emphasize that the.
3:55:18Elon MuskI mean I described this in my in the blog pieces. It's like really this like the point of Tesla is to advance the advanced sustainable transport and energy and so my mental framework was very arduous running two companies.
3:55:42Elon MuskAnd so what is the area under the curve of the least pain? Because there would certainly be something on the order of months to maybe a year of significantly increased pain but then presumably decreased for the following four years.
3:56:02Elon MuskSo you know what's the net present value of pain if you will and overhead and obviously that was like very difficult to know. So try to put some uncertainty bounds around that and this is definitely uncharted territory for me so.
3:56:27Elon MuskWell, it's charted in the sense of obviously I know what SpaceX is like but it's not charted in the like how do we get from Tesla to a SpaceX scenario?
3:56:34Elon MuskHow feasible is that? You know, will the. Will it a set of private investors even post deal make onerous demands even if your deal is clean but you've got a board that maybe has strategic has motivations that are non financial.
3:57:03Elon MuskI had this experience with my first company and it was a difficult situation. We had a Knight Ridder host we had as investors for my first company Zip2. Terrible name, worst name ever.
3:57:18Elon MuskBut we did do the first maps and directions on the Internet among other things. Oh sorry. We did do the first maps and directions on the Internet. Oh. So my first company that I created was Zip2.
3:57:35Elon MuskSuch a bad mayor. This is what happens when you let advertising agencies choose your name. It's brutal.
3:57:46Elon MuskThis sound like Knight Rider? Totally. But with 2Ds. Yeah. And Hearst and the New York Times Company and we did do the first maps and directions on the Internet, which was cool.
3:58:02Elon MuskFirst white pages, first yellow pages and we helped bring a bunch of the newspapers, the smaller newspapers online. We helped enhance the websites of the major newspapers. But we had, did have those.
3:58:15Elon MuskWe had Night Ritter, Hearst and Hearst and a New York Times company were board members. So they did have these strategic objectives which were not necessarily aligned with the Zip2.
3:58:31Elon MuskAnd I felt that, you know, we had this incredible technology that wasn't effectively applied. So I had some concern, like I did not want to be in that situation again.
3:58:46Elon MuskAnd although SpaceX is private with Google's an investor in SpaceX rockets and spacecraft and make them better and we don't really worry whether something's on one side or another of a quarterly boundary and or like a rocket blows up.
3:59:07Elon MuskTouchwood, may that not happen again. We don't have like some class action lawsuit from a bunch of people that said we somehow should have known that a rocket would blow off.
3:59:18Elon MuskNo one. Do you think we'd ever launch the thing? I was like, this is crazy. So okay, there's like much less headache. Can we get there with Tesla didn't know.
3:59:34Elon MuskSo a lot of uncertainty. Thought it was worth investigating. So the calculus changed and it was like, okay, we're going to stay public. This is not ideal, but nonetheless, on balance, probably the right move.
3:59:59Elon MuskLet's hope you hopefully you guys don't torture me too much.
4:00:22Elon MuskOh, are we done with this or still continuing?
4:00:29Elon MuskOkay,
4:00:35Elon MuskSa.
4:01:03Elon MuskGot it.
4:01:14Elon MuskYes.
4:01:31Elon MuskI think I, I think I may have had a conversation with this regard. I think. Yeah,
4:01:42Elon MuskYeah. Certainly not with the, the whole board, but I may have had conversations with this. Some of the board members. Yeah,
4:02:06Elon MuskI do not recall.
4:02:19Elon MuskI think I, I think I,
4:02:25Elon MuskI think I said that we should investigate going private now. And I think I convey to him the Saudi interest.
4:02:44Elon MuskI think he, as I recall the conversation, he was not. He was reluctant to, To. To. To investigate a take private, as I recall from the conversation, or at least he was certainly not enthusiastic about doing it.
4:03:07Elon MuskThis was my takeaway from the conversation. So it wasn't a no, but he wasn't opposed to it. But he was like, doesn't think it's like the greatest idea.
4:03:29Elon MuskI don't know. I think Wednesday night or Thursday morning. I'm not sure exactly when we're going to look at the call records to confirm. I suspect. I think so.
4:03:41Elon MuskI do not recall him being there, but he has been at Tesla to help out many times. I don't think so.
4:04:14Elon MuskOver the course of the past few years, I've had many conversations with members of the board individually and even members of the board collectively about going private.
4:04:47Elon MuskNot that I can recall. It's possible I might have, but I don't, I don't. There's a lot going on. So.
4:05:03Elon MuskNo, I mean, I remember having a conversation with. About wanting to investigate the take privates at this time. I'd had many conversations in months and years past, of course, with many other members of the board about potentially going private.
4:05:28Elon MuskBut, you know, and I mean, just, you know, like this. There's so much going on. I'm really trying my best to remember. It's not so. I'm like,
4:06:07Elon MuskYou know, in fact, if there is something like a core log or something that would jog my memory, that I would. I want to answer your question. And if there's something that would drop my memory, I would.
4:06:17Elon MuskThat would help. Yeah, to this.
4:06:32Elon MuskHe thought, he thought this would just be a very arduous process. So he certainly had no question with respect to whether funding was available. That was not a factor.
4:06:52Elon MuskBut he thought that we would see vigorous opposition from shareholders and just generally class action lawsuits and that kind of thing pretty much guaranteed in these transactions. And he was concerned that we would see so much,
4:07:22Elon MuskThat there'd be so much overhead and drama associated with a take private that in his opinion, it probably would not be wise. Now, in retrospect, he was Correct. Yeah.
4:07:36Elon MuskSo I concede to the wisdom of his opinion in retrospect. And he by the way, has reminded me that in the future I should increase the weight of his opinion.
4:07:47Elon MuskAnd I agree.
4:08:05Elon MuskNo,
4:08:26Elon MuskOkay. This is going to be a bit embarrassing, but I did mention it to my girlfriend.
4:08:39Elon MuskI had that conversation shortly before writing this email, actually. No, wait, shortly? No, after writing this email, actually, not before. So it wasn't. It would have been before. I just thought she would find it funny.
4:08:52Elon MuskSo let's. Which admittedly, you know, is not a great reason to pick a price, but 20% premium was 419. And then I thought, well, it's very close to 420.
4:09:01Elon MuskMight as well make it 420.
4:09:18Elon MuskIt did. I wasn't sure if it was Thursday or Friday, but it's obviously on this one Thursday afternoon.
4:09:34Elon MuskIs it 4:30 or 5? I'm sure padded like to 1:30 or 2-ish.
4:10:00Elon MuskYeah.
4:10:13Elon MuskOn. Yes, I believe so.
4:10:29Elon MuskYes,
4:10:35Elon MuskYes.
4:10:53Elon MuskAs I recall the share price ended at around 348. And 20% of that would have been around 419. And I rounded up to 420.
4:11:13Elon MuskYes,
4:11:27Elon MuskYes.
4:11:38Elon MuskI think I made like some Minor comments about 420s is.
4:11:49Elon MuskWell, it is. And, and I learned this recently, sort of like not exactly super with it here, but it's a euphemism for weed. I actually looked up the etymology of it.
4:12:10Elon MuskThe etymology is not what people think it is. Usually people think it's like the police code for weed, but it is not. It's the time at which three high school students gathered at the statue of Louis Pasteur after school and smoked weed at the statue.
4:12:32Elon MuskAnd then they would say like 4:20, because that would be the meeting time. At least that's what Wikipedia says to the degree one could believe. Wikipedia. And then that got picked up in high times.
4:12:43Elon MuskAnd then the Grateful Dead picked it up and it went kind of viral from there.
4:13:01Elon MuskOh, I was at the Gigafactory to going over production issues. This is at the Tesla Gigafactory in Nevada working on production issues for the battery pack and drag unit.
4:13:19Elon MuskYeah, I think one was with me. And then in the gigafactory was a ton of people, like 20 or more people.
4:13:36Elon MuskYou know,
4:13:41Elon MuskI was. My head's with me was driving a car and. And then I had a bunch of meetings and I was walking the production line at the Gigafactory. The production line?
4:13:55Elon MuskYeah, While I was drafting it, I was drafting it on the way to the Gigafactory. So for the airports to Gigafactory. And then I sent it at some point after arriving there.
4:14:24Elon MuskYeah. Yes. I mean, I basically did a mental calculation of 20% on the closing price, realized it was quite close to 420 and made it 420. So it was funny, but it wasn't, I wouldn't say it was like an especially material change to what would would have otherwise been the case.
4:14:48Elon MuskI, I rounded down to. I rounded up to. Funny. Seriously?
4:15:03Elon MuskWell, I didn't want the board to take this as like some protracted exercise. So it's sort of like we're gonna decide this turn and basically.
4:15:22Elon MuskInvestigate it fast, make a decision fast and either then go through the pain and difficulty of the take private or stay public. But whatever it is, we could not afford an extended distraction as to whether we would do a take private.
4:15:41Elon MuskThat would be a poor use of time.
4:15:59Elon MuskIf you'd asked me at the time, what was the likelihood, I would have said, to first approximation, 50%. But that's, but in general, if you ask me something about anything that where I have a lack of information or don't have that much information, a generally a good guess is going to be 50%.
4:16:33Elon MuskNot especially, no. I just, I just wanted it to be not so short that it was impossible and not so long that they could waffle divorce.
4:17:09Elon MuskWell, I mean, I actually effectively am asking for a shareholder. I am actually asking for a board vote because I am asking that this matter be put to a shareholder votes.
4:17:22Elon MuskThat's a request for a board vote. Yes, yes. And you know, it was a little, I was a little naive at this point because I was like, I was sort of under the impression of like, well, you know, let's see if we want to do this and like figure out something we can put to a shareholder vote as quickly as possible.
4:17:45Elon MuskAnd I wasn't aware quite of the, you know, the special committee thing and you know that the complexity of the special committee process was not obvious to me at the time.
4:18:07Elon MuskYes,
4:18:18Elon MuskPartly the reason that with respect to the Solar City situation, I thought it was important to do this kind of special committee and all that was because the company was founded and run by two cousins of mine and I do not want the perception of nepotism.
4:18:44Elon MuskSo from my perspective, this was not so much as what is legally required, but really what is required to minimize the perception of and the reality of nepotism. Now in this case, this does not strike me as a case of neptism and therefore not, I thought, not constrained to the same degree.
4:19:19Elon MuskYes, it was very difficult. Yes. I didn't think, like I said, I didn't think we had the, we didn't have the, you know, at SolarCity we had a lot of holders of Tesla.
4:19:38Elon MuskWe had, we had a close coincidence of holders of Tesla stock and SolarCity stock, but not an exact coincidence. And so sort of figuring out how do you do the right thing when the shareholder base is approximately the same but not exactly the same, how do you avoid the perception and reality of nepotism?
4:19:57Elon MuskBut these struck me not so much as fundamental legal obstacles, but rather how do we do this process in the best way possible given the circumstances. So.
4:20:14Elon MuskThat was my main thing with the SolarCity deal is let's make sure that this is the cleanest possible process given the complexities involved, whereas I did not see quite those.
4:20:30Elon MuskThere wasn't really a nepotism perception, at least from my standpoint. There wasn't. I really wanted people to. The existing shareholders to remain as shareholders. This was not a, this struck me as a situation with far fewer conflicts or perceptions of conflict.
4:21:34Elon MuskEncrypted blob. Sorry.
4:22:00Elon MuskNow.
4:22:09Elon MuskNo,
4:22:14Elon MuskYeah, I mean it is weird. The keeps accidentally FaceTiming me. Here's the.
4:22:50Elon MuskSo should I go through to that date calls?
4:23:02Elon MuskSure. Oh yeah, sure.
4:23:19Elon MuskSa.
4:24:04Elon MuskAnd on this one it's utc. Is it minus 7?
4:25:10Elon MuskIt doesn't look like I had any, any phone calls actually prior to this from this record at least. Am I saying, am I reading this correctly? Unless I'm getting UTC time wr.
4:25:31Elon MuskYeah, I'm on facebook.
4:25:53Elon MuskYeah, that looks like shortly after this email,
4:26:09Elon MuskNothing substantive. I think it may have been just, I think maybe just Kimball called and said, holy cow, go scope that VML or something like that actually. Yeah,
4:26:27Elon MuskYeah, I think he was actually pretty, I mean, I think he was sort of relatively positive about the notion of going private as a recall. Oh yeah, so there you go.
4:26:44Elon MuskYeah, so that's consistent with the conversation. Yeah, it was quite positive about going privately.
4:27:23Elon MuskYeah, yeah. Right, right, right. Yeah, yeah.
4:27:37Elon MuskSa.
4:28:27Elon MuskOh,
4:28:36Elon MuskI, I mean I think this is just to touch base on, you know, what are next steps type thing. But I, I don't, I don't, I don't recall anything particularly substantive in this.
4:28:52Elon MuskIt was just like, okay, now what do we do? You know, that's basically we're going to go figure out things and engage advisors and that kind of thing.
4:29:26Elon MuskNo,
4:29:31Elon MuskThere,
4:29:45Elon MuskI think there was some email, generic email of like, you know, offer received or acknowledged or something like that.
4:30:11Elon MuskYes,
4:30:15Elon MuskI believe on the Friday. Yeah.
4:30:51Elon MuskFrom what period of time to what period? Time.
4:31:12Elon MuskI don't think there was anything substantive.
4:31:57Elon MuskYes.
4:32:09Elon MuskYeah.
4:32:21Elon MuskWith Mr. Murdoch. I did not have any discussions at all. This was specifically, you know, not. Not a topic of discussion. So that was truly personal with Antonio.
4:32:41Elon MuskI don't recall the exact or exactly what was discussed.
4:32:50Elon MuskI think it was sort of general advice about like we need to now engage. We need to form a special committee. There needs to be counsel for the special committee.
4:33:06Elon MuskWe need to engage. You know, everyone needs to engage financial advisors, that kind of thing.
4:33:21Elon MuskI think it was late afternoon. Late afternoon or. Yeah, exactly.
4:33:31Elon MuskYes. Not in the morning, evening or afternoon.
4:33:40Elon MuskIt was cold. I think everyone was on. I think all belt board members were present. And Todd, I think he was there. I think he was there, but I'm not certain.
4:34:09Elon MuskMy recollection is that.
4:34:15Elon MuskOh, actually. Okay. I'll get back to. But there's something I should. Should add. Although I'm. I'm not supposed to add anything, but I had this previous. Worth adding the.
4:34:37Elon MuskI do need to check my memory though. Yeah. On that call I said the Saudis wanted to fund the take private. I believe I also mentioned that Silver Lake was interested in supporting it and had confidence that this could be done on terms that we would like most likely.
4:35:07Elon MuskAnd that I was mostly just like, look, let's just. We need to move this along rapidly and figure it out if it makes sense or not. But the one thing I didn't want to do was have some very laboriously long consideration process.
4:35:33Elon MuskI think that I thought that could be too damaging to the execution of the company.
4:35:43Elon MuskI said they, they wanted to do it.
4:35:50Elon MuskI don't think so. I'm not done it to call. I don't think so.
4:36:03Elon MuskI think that did come up and I think we're really going on best efforts recall here. But I think there was some concern expressed about them having too large of a stake in the company and effectively having a de facto control position or de facto extremely influential position.
4:36:30Elon MuskAnd I think I said that in a take private we would limit their ownership to approximately 15 to 20%.
4:36:48Elon MuskSo my best recollection. Yes,
4:37:08Elon MuskYes. In fact, I man, I really. I do want to be careful about conflating one memory with another. So I'm doing my best here to not have one memory combined with another memory or something.
4:37:25Elon MuskHuman memory is just. Man, it's hard to remember if you meet someone at a party or what you had for lunch last week. Sort of like it's tricky compared to computers.
4:37:39Elon MuskIt was very good for memory. So. I did. I think I clarified on that call that this was not going to be an LBO so I want to really just frame that There's a lot of.
4:37:59Elon MuskI think like I'm not certain. I think I said this is not going to be like an LBO where there's a massive amount of leverage against the company where 80% of the company is bought out.
4:38:14Elon MuskLike I said there's not going to be. The initial assumption was I think even by Antonio was that this would be like some sort of LBO like the Dell Tech private and I wanted to clarify that I wanted all investors to remain with the company and I think they brought up like this is going to be really difficult for small investors.
4:38:36Elon MuskI said well yes, but Fidelity is a shareholder in SpaceX and that seems to work quite well and I know that Bailey and Tiro want to be in SpaceX presumably the three of them would also want to be in a private Tesla.
4:38:57Elon MuskAnd that if they serve as a fiduciary then then perhaps all investors can remain.
4:39:17Elon MuskI think there was some skepticism on the board as to whether that could on the board call as to whether that could be achieved. But.
4:39:32Elon MuskWhat was not brought up on the board call because I only discovered it I sort of figured this out later was the 15% limitation on illiquid security in a mutual fund.
4:39:42Elon MuskSo that was not brought out on the board call.
4:40:16Elon MuskOf new investors who have announced well I guess technically they would be existing investor but with a significantly increased stake.
4:40:51Elon MuskAnd my apologies for prefacing all these with I think because I this is really trying to recall a back and forth conversation. I think I said probably we would only that need to buy out 20 to 25% of investors.
4:41:18Elon MuskI think I said that certainly I and employees and insiders would retain shares and that I thought most institutions would retain their shares. I thought at the time I thought you know, 20 to 25% at the most would want to sell their shares because I thought the institutionals would actually retain their entire shareholding.
4:41:48Elon MuskI thought that was the most likely outcome which I subsequently discovered was not the case. So I thought it would be that at the outside a 20 to 25% would want to be bought out and not participate in the private company.
4:42:14Elon MuskI think the CFIUS issue may have been raised and I said that we would ensure that any foreign entity, any single foreign entity did not come too close to the Sophius limits meaning that they would not be in a control or defective control position.
4:42:56Elon MuskSa.
4:43:43Elon MuskYes, they never. They're. They're really quite careful not to link it explicitly. There were. It was linked implicitly. Like they didn't want to feel like. Seems like they didn't want to force me to do something that I really didn't want to do.
4:44:06Elon MuskThey just essentially seemed to want my help in transitioning their economy. That was what they. And so obviously that if I.
4:44:43Elon MuskThat was my understanding. Yes.
4:44:54Elon MuskMy recollection is that it simply came as a natural consequence. Like the next step is okay, let's see who wants to stay with the company when if we go private like okay, then I'm going to need to go talk to investors and make sure to avoid any selective disclosure.
4:45:20Elon MuskSo obviously it would need to be some kind of public document. Like we need to basically just something would need to happen to made clear that there is a take private under consideration.
4:45:39Elon MuskI don't think so.
4:45:49Elon MuskA general impression that they decided that this was the natural next step.
4:46:00Elon MuskOh just, you know, I mean I'm familiar with Reg fd. It's been public for eight years. So I always have to be like remind people of this a lot especially with Tesla.
4:46:20Elon MuskSo.
4:46:24Elon MuskYeah, yeah. So obviously a take private, particularly with the premium is very. This is very big information. So.
4:46:40Elon MuskYou know, so it's something that needs to be disclosed to the public so that everyone has the same information and there's a fair playing field. You know, people can make their own assessment about whether there would be a take private at a premium or not.
4:46:59Elon MuskAnd but we wouldn't be obviously would not to be fair if just some investors in your budgeting others did not.
4:47:10Elon MuskNever, never. Never heard of one. Never heard of it.
4:47:23Elon MuskNo. I don't trust NDAs, to be totally frank. You know, it's like, it's just, especially with Tesla, news is too leaky. It's just too leaky. It drives me crazy actually, the leakiness of the whole situation.
4:47:43Elon MuskYeah,
4:47:48Elon MuskNo, I don't think anyone thought it was realistic that I could talk to a whole bunch of investors, sign an NDA and actually have it not leak. It would also be problematic for investors.
4:48:00Elon MuskLike a lot of them just wouldn't want to sign India because they're like, oh, now I can't trade in your stock. So now I'm locked in. This is not going to be acceptable.
4:48:15Elon MuskWell, it would have to be probably at least the top five besides me. And I thought this, this is. There's just like I said, two issues there actually keeping a secret.
4:48:28Elon MuskI think they would have trouble with a lot of them. There's like a whole Bunch of funds. There's like, you know there might be like six fund managers or.
4:48:38Elon MuskAnd then like a, like a sort of assistance and like a whole. Basically the whole office is going to know and like in 2018, man, I'm not sure what the secret is.
4:48:47Elon MuskIt's crazy. So this isn't. And then, and then if we did ask them to. So if you sign an NDA and say if you sign this NDA you can't trade in a stock you necessarily violated at the NDA.
4:49:01Elon MuskSo does not seem realistic.
4:49:08Elon MuskYeah, there are some like that like pif obviously they could know and it's like okay, you're not going to sell the stock, you're not going to buy the stock for those that where it's a given that they're going to.
4:49:22Elon MuskThey're not going to change their holdings and it's only a few that could be okay. But let's say when you get to three or four, forget it.
4:49:53Elon MuskI think the problem is the institutionals like Fidelity, Bailey T. Rowe, Allianz Capital Group, they trade the stock all the time. So that's impossible. You cannot talk to them effectively without saying hey, sign this NDA.
4:50:13Elon MuskAnd then after this NDA you cannot trade the stock. Oh really? Okay, that's interesting. I wonder why that wouldn't be good.
4:50:43Elon MuskI got it, I got it. Do you want it?
4:51:08Elon MuskI think so. If I encountered vigorous opposition with it which at the time I did not expect vigorous or strong up. If I encountered strong opposition which I actually at the time did not expect to encounter but then subsequently did, if it might count a strong opposition, I would not want to do the deal.
4:51:33Elon MuskBut this is not to say the deal could not be done but I would not want to do the deal.
4:51:47Elon MuskThe, the. The PIF would have fallen into any necessary finding gap and I think it would also have been quite easy to bring in other investors and that that also turned out to be true.
4:51:57Elon MuskSo my guess that the existing large institutionals would retain their full stake and perhaps increase was wrong. That was incorrect. My guess that there would be many other strategics and sovereigns who would be interested was correct.
4:52:35Elon MuskWith the institutionals mean like sheet tier, sorry Fidelity tier of value and all that.
4:52:50Elon MuskNo,
4:52:58Elon MuskI think that this is extremely sensitive information so I would not want to. I mean I'm not sure how one could really arrive at that. Well, without letting the cat out of the bag, as I said, Fidelity was already an investor in SpaceX as a private company.
4:53:24Elon MuskTiro was interested, Bailey was interested, others were also interested obviously Tiro was a big investor, is a big investor in Uber as a private company. It has a valuation above Tesla's and I think infidelity is I think also an influencer.
4:53:41Elon MuskI think, I think Fidelity is also an investor in Uber as a private company. So these all struck me as like, okay, well clearly they are willing to have big stakes not just in SpaceX but also in companies like Uber.
4:53:53Elon MuskIn my view we had better technology than Uber so they should be. I expected a, I expected them to be like, of course, like not a problem. And I'm not sure it would have been that easy to get.
4:54:15Elon MuskI'm not sure how you get the opinion, the real opinion because who would you ask at those companies? So it's sort of tricky. It's tricky, it's tricky. And then why are you asking?
4:54:49Elon MuskNo, I assume that the no, I assume that they're recovered with the go private. I assume that they would be careful with holding their shares in Tesla as a private company because as I mentioned, Fidelity is an investor in SpaceX.
4:55:08Elon MuskBailey and Tiro want to be investors in SpaceX though there are other others that also want to be Fidelity and Tiro are significant investors in Uber which is obviously also a private company and in the transport business.
4:55:27Elon MuskI think I thought these facts were clearly indicated high comfort level with holding shares in a private company.
4:56:04Elon MuskNo, no, I think I said I would call them and but we would have to figure out some way to disclose that a take private is under consideration. I mean I can't say, well I know you're getting to it of course, but the, in the normal course of business what I would have done, I'm maybe preempting your question but perhaps helpful in the normal course of business we would have done an after hours disclosure on the take private and I actually intended to do that on the Tuesday night of the tweet.
4:56:50Elon MuskSo that would have been approximate if not the Tuesday night, certainly the Wednesday night. It just sort of a disclosure of the salient fact that I was investigating a tape private at $420 and that in my opinion funding was secure for this.
4:57:13Elon MuskThe then on Tuesday morning the news of the Saudi investment broke and I saw that I first got an email Tuesday morning from Tesla Communications saying that Financial Times has an inquiry about the Saudi investment which rang a huge long bell in my head, alarm bell.
4:57:40Elon MuskSo I was like, whoa, how's this information getting out there? And then I saw that the news Financial Times published this information and then the stock started rising quite rapidly after news of the Saudi 5% investment.
4:58:00Elon MuskMy thought was this is a, this is very problematic. I thought that most likely if the Saudi news investment had leaked then probably the take private news is also leak is also leaking or at least is a great risk of leaking.
4:58:22Elon MuskAnd so it's like okay, this is got to make sure there's a fair playing field here. And so I said there's a few facts that need to be out there and that is that I'm considering taking Tesla private.
4:58:38Elon MuskIn my view, funding is secured and the price that I propose toward is $420. This seemed like critical facts for a level playing field for all investors. Like I said would otherwise if not for the Saudi news leaking would have been through a standard disclosure form after hours.
4:59:00Elon MuskBut I was like better get those facts out there. So that was my thinking. I'm preempting some of your questions, but this may be helpful.
4:59:17Elon MuskNo,
4:59:24Elon MuskNo. And since I would be essentially the better, it didn't make sense that it seems like in the multi hat scenario it's like if I'm the better, it doesn't make sense to consult with the buddy.
4:59:46Elon MuskSorry. So you know, and I had not had time to formally engage advisors and whatnot. So I, you know, I was like this very important information of the Saudi investment is leaking.
5:00:06Elon MuskWell, they're the ones who want to help the try take private will help, you know, make the take private happen. Good chance that news is out there too, but selectively.
5:00:15Elon MuskSo let's get the, let's get, put all the cards on the table right now.
5:00:32Elon MuskI, they did not, certainly did not review and approve. I might have gotten some like what the heck's going on emails or something like that, but they did not, I did not like run it by anyone.
5:00:44Elon MuskBut I didn't think, I actually thought I was not supposed to run it by. It wasn't like I thought I was supposed to run it by Tesla and I didn't, I thought I wasn't supposed to because I have the other hat on.
5:00:57Elon MuskYou know, I was trying to do the right thing. To be clear, ill advised perhaps or not ill advised, ill unadvised. I'm not saying this was the smartest move in the world here, but I was really trying to do the right thing here, at least in my opinion.
5:01:16Elon MuskAnd I was like got to get this out there.
5:01:27Elon MuskNo, no, I just saw the Saudi investment news hit, stocks started going ballistic. I was like sounds pretty, this sounds pretty suspect. I better get that information out there, make sure there's a level playing field.
5:01:54Elon MuskThe email from Tesla PR came in. I was at home when I got the email, but before we really had a chance to respond or do anything, the news hit FT and then it was all over the national press and I was getting in my car to go to the Gigafactory.
5:02:18Elon MuskBy the way, that's where I'm going after this meeting. So back to the factory.