HERE WITH US ON THIS WHOLE
SUBJECT FROM A BENCHMARK
MANAGING PARTNER, KEVIN KELLY.
"FORBES" MEDIA CHAIRMAN STEVE
FORBES AND AROUND, SUSAN LI.
THERE IS A ELON MUSK TREE OUT,
BUT STILL NEGOTIATING TERMS OF
NEEDHAM & CO. MANAGING DIRECTOR
THERE --
[INAUDIBLE]
YOU KNOW IT IS INTERESTING ABOUT
THIS AND MAYBE YOU CAN HELP ME
IS THIS IDEA IS ELON MUSK IS
GETTING HIMSELF INTO TROUBLE I
CONSTANTLY TWEETING AND TALKING
GOVERNMENT FROM SECURITY EXPERTS
AND THE LIGHTS IS NOT PASSING IT
ONTO THE BOARD, MIGHT EVEN BE
VIOLATING LAWS.
>> I THINK A STREET IS
PREMATURE.
HE SAYS FUNDING IS SECURED
WITHOUT HAVING ANY DETAILS
ARRANGED BEFORE HAND.
IF YOU LOOK AT THE RECENT BLOG,
QUESTION THEY WOULD FIND HIM.
HE ALSO SAYS THAT IS CONTINGENT
ON DUE DILIGENCE, FINANCIAL
REGULATION.
A LOT OF IT'S BEEN BOTH IN TERMS
OF THE STATEMENT.
SO I THINK FUNDING IS NOT
SECURE.
WE HAVE A LONG WAY TO GO.
>> I DON'T KNOW IF IT'S A LIE OR
NOT.
I DON'T THINK IT'S AN ACCURATE
STATEMENT.
NEIL: USUALLY A LIE.
>> TO MAKE A DECLARATIVE
SECURED OR NOT FOR THE DETAILS
OF BACK OF A SIGNAL TO THE
STREET THAT THIS IS A DONE DEAL
AND IN OUR VIEW IT'S NOT A DONE
DEAL.
IS WHY GO PRIVATE IN THE FIRST
PLACE ON WHAT LEVEL IT WOULD
HAVE BEEN.
I DON'T KNOW WHAT THE MAGIC
NUMBER IS.
BUT WHAT DOES THIS SAY ABOUT
>> WELL, ONE REASON HE WANTS TO
GO PUBLIC AS HE HAD BEEN UNDER
TREMENDOUS SCRUTINY BY MLS, BY
THE MEDIA, BY SHAREHOLDERS
BECAUSE THERE'S A LOT OF
PRESSURE ON THE COMPANY RIGHT
NOW.
THEY ARE TO MAKE OR BREAK POINT.
THEY HAD TROUBLE GETTING THE
MODEL THREE OUT AND THEY WILL
NEED MORE MONEY GOING FORWARD TO
CONTINUALLY IMPROVE THE PRODUCT,
TO INTRODUCE NEW PRODUCTS.
>> ONE OF MY TAKES ON THIS AS HE
SAID FINDING A SECURE PREDICATED
ON THE FACT 66% WILL GO A LONG
WITH HIM FROM THE PUBLIC MARKET
AGAIN AND THEY LIQUIDITY, LOSING
TRANSPARENCY.
66% SEEMS TO BE A HIGH NUMBER
BUT THE ASPECT COMING OUT OF IT
IS ELON MUSK SHOULDN'T RUN THIS
COMPANY.
HE SHOULD BE THE CHIEF VISIONARY
OFFICER.
COMPANIES HAVE A TOUGHER,
SOMEONE THAT KNOWS HOW TO RUN AN
AUTOMOBILE COME TO ME AND CAN
SERVE AS A BUFFER.
>> STEVE JOBS.
PUTTING SOMEONE LIKE LEE
IACOCCA, SOMEONE THAT KNOWS
PRODUCTION ISSUES.
>> I'M NOT SURE THAT'S THE RIGHT
CHOICE TO BE HONEST EITHER.
A MAN WHO OWNS 20% OF THE SHARES
PROBABLY OWNS THE MAJORITY ON
$70 BILLION, WHY NOT PUMP THAT
CASH INTO THE COMPANY INSTEAD OF
A FINANCIAL TRANSACTION.
>> GOING PRIVATE IS VERY
PUZZLING BECAUSE IF YOU LOOK AT
THE EARNINGS CALL THEY WILL BE
PROFITABLE STARTING IN Q3 IN
GOING FORWARD.
WHY GO PRIVATE NOW IF YOU'RE
GOING TO BE PROFITABLE.
NEIL: HE DOESN'T REALLY WANT TO
GO PRIVATE.
>> THAT'S A POSSIBILITY.
THE MARKET 2019 AND $59.
MARCH OF 2019.
THEY ARE BURNING THROUGH
2 BILLION IN FREE CASH FLOW
YEAR.
THEY HAVE CURRENT LIABILITIES OF
9.1 BILLION.
CURRENT ASSETS OF 657 BILLION.
IT'S A BIG STRETCH FOR THEM TO
TO BE PROFITABLE AND SO
DEFINITIVE ABOUT THAT, THEY
WOULD BE REWARDED WITH A VERY
HIGH STOCK PRICE.
A THIRD OF THE SHARES
OUTSTANDING ARE SHORT.
IF THEY REALIZE THEY WILL BE
PROFITABLE IN A CONSISTENT
BASIS, THEY WILL GET CRUSHED.
THE STOCK PRICE WILL GO UP
SIGNIFICANTLY HIGHER.
THAT'S THE QUESTION WE HAVE.
TRYING TO WHAT WOULD BE SO CRAZY
ABOUT TAKING SOME UNLIKE IN ELON
MUSK IS HE'S KNOWN FOR BEING
LIKE A DONALD TRUMP THAT CAN
RATTLE AND CONCERN EVERYBODY,
THAT HE GOES UPSTAIRS, HE'S THE
VISIONARY, WHATEVER YOU WANT TO
SAY.
WE SEE THE GOOGLE GUYS TRY THIS
WHEN THEY BROUGHT SCHMIDT IN.
YOU SEEN IN COUNTLESS OTHER
CASES.
EVEN STEVE BALMER TAKING OVER
FOR BILL GATES AT MICROSOFT.
BUT THERE IS PRECEDENT FOR THIS.
OR WOULD THAT JUST BE ADDING
INSULT TO INJURY.
>> WELL, I THINK IT WOULD BE A
SMART IDEA BECAUSE HE IS THE
PRODUCTION PROBLEMS WITH THE
MODEL THREE FOR EXAMPLE, HE
REALLY NEEDS EXPERTISE IN
I GO HIRE THE BEST TOYOTA
MANUFACTURING SUPERVISOR I COULD
FIND, FOR EXAMPLE, TO TAKE CARE
OF THOSE.
LET THE EXPERTS TAKE CARE OF
THOSE ISSUES.
THAT CAN BE THE VISIONARY.
I WOULD ALSO ADD, WE TALKED
ABOUT ALL THE MONEY GOING OUT
THE DOOR RIGHT NOW.
WHAT ABOUT THE INVESTMENTS FOR
THE FUTURE?
TOO.
THE MONEY TAKING THE COMPANY
PRIVATE WILL HINDER THOSE PLANS
I WOULD THINK.
>> THIS GETS TO THE WHOLE THING
ABOUT LEADERSHIP.
ONE OF THE THINGS STEVE JOBS
LEARNED PAINFULLY WITH HOW TO
BRING PRODUCTIVE PEOPLE,
CREATIVE PEOPLE AND KEEP THEM AS
THEM AWAY.
THOSE MUST HAVE THE ABILITY TO
SPEND A LOT OF PEOPLE LEAVING
THE COMPANY, DOES THE ABILITY TO
BRING CREATIVE PEOPLE ON,
PRODUCTION PEOPLE ON AND KEEP
THEM AS A TEAM AND WORK
TOGETHER?
TRAIN TO THE MORE I THINK ABOUT
THEIR AFFINITY FOR TREATING,
I DON'T KNOW IF ANY MUSK PEOPLE
