Note: This Bob Lefsetz piece is from earlier this year; I was waiting to see how the Twitter deal might progress or unfold. Since there has been real news about the case recently, it was a good time to share it. (His reader pushback here) Personally, I don’t rule out Tesla, but I also like EVs like the Tycan or Mach E. Regardless, it’s thought-provoking. Encoy

“Elon Musk Says He’ll Reverse Trump’s Twitter Ban”.

Don’t buy a new gasoline car unless you plan to get rid of it in a few years, which is dumb, because then you’re depreciating. But if you hold on any longer, the value of a gasoline automobile will drop to almost zero. How much is your 35mm camera worth today?

As the entire world goes electric, especially in China and Europe, the US will no longer be number one in many categories the way it is. For all the BS coming from “patriots” talking about how people are interested in immigrating to the country… a true patriot would talk about strengthening the system, making America more equitable, but that doesn’t seem to be their goal.

So the car is one of the few signifiers we still have. We all use the same smartphone, most youngsters don’t even bother with watches, how are you going to prove your identity in today’s world? Well, mostly on social media. But in the real world, it’s still about a car. And if you want to show you’re cutting edge, you drive an electric, and Tesla dominates that sphere.

Now let’s be clear, electric automobiles were first embraced by the left. “Coastal Aristocrats.” They wanted to show they cared about climate change, the planet. They put up with inferior technology just to show their integrity.

As right?

Holman Jenkins and the rest of his knee-jerk Republicans at the “Wall Street Journal” haven’t stopped decrying electric automobiles, ranting endlessly about subsidies, the lack of profits if clean air credits aren’t sold. They want to endure the past. They want to keep their jobs. They want the right to drive a bigger and bigger SUV, hopefully a Suburban, or a full-size pickup truck. According to them, this is freedom. For the planet? Whether the people they hate in Silicon Valley will come up with a solution or God will intervene, there’s nothing to worry about. For science? There are no facts in America, haven’t you heard?

So, Tesla is buying into the goodwill, the educated class, wanting to make a statement, raving about their automobile, spreading the word. But what do you say now?

I don’t care what you believe, whether you’re left or right, but when a huge corporation, publicly traded, alienates its foundation…it’s a problem.

I used to be an Elon Musk fan, not anymore. The man is irrational, and he believes that the rules do not apply to him. And he acts like he’s the only one who owns the truth, who can lead us into the future, and that’s just hogwash.

For Twitter…

Twitter is not a newspaper. It’s not even a television station. Twitter only works if it’s agnostic, if everyone goes there. Just ask Donald Trump and Devin Nunes, who left Congress to run Truth Social. It has no traction. Forget that platforms are hard to build, it’s almost impossible to build traffic unless you’re a first mover or you’re significantly better than an established outfit, including Truth Social. We have learned that online a company dominates every field. Amazon in retail… especially when it is consumer facing and depends on traffic.

So, do people on the left need to be on Twitter? probably For over a decade we heard about tech boycotts, but they never worked, people don’t want to be left out, they want to work. So ignore the hype about Twitter resigning. Twitter is here to stay until it’s dropped… Well, TikTok and Snapchat took a long time to get into Facebook, as for Instagram, the Zuke company bought it!

As for content on Twitter… misinformation is a major problem. All over social media, never mind “news” sites. Do we just throw up our hands and say we can’t solve the problem, we have to work it out ourselves?

Twitter is not government owned, it can control the content, who can be on the service throughout the day.

Just as the “New York Times” does its best not to print untruths.

The same cannot be said for Fox, which is one thing, but reputable news organizations are not outlets for disinformation campaigns. They are worried about their credibility. To Musk’s credit, he’s undermining it every day. He looks at the number of Twitter followers he has, he thinks everyone is a fan, but that’s not the case.

Misinformation has brought us here, where democracy is under threat. Maybe you don’t agree with it, but as the old aphorism goes, you’re either part of the problem or part of the solution.

As for the problem… you should read a few paragraphs of this article:

“As ‘seismic shift’ evangelicals fracture, one Arkansas pastor leaves home — Kevin Thompson thought he’d lead his hometown church for the rest of his life. Then came Trump, and everything after that.” -NYT

I’m making it simple, since clicking is the hardest thing to get a person to do:

“So he was caught off guard when two church members raised concerns about a passing reference to Mr Hanks. A young woman texted him, concerned; Another member suggested Mr. Hanks’ reference was that Mr. Thompson did not care about sex trafficking. Mr. Thompson soon realized that their concerns stemmed from the widespread QAnon conspiracy theory, which claims the movie star is part of a ring of Hollywood pedophiles.”

I believe the truth here is self-evident.

But it is not self-evident that women have the right to control their own bodies. Huh?

So there is a huge cesspool of information online that is misinforming the public. And it’s the articles from the right that are most shared on Facebook All people are not equal.

And the truth is the Twitter deal may not close, and many analysts think it probably won’t.

You should read the following article:

“Flawed math behind Elon Musk’s Twitter deal – an overvalued billionaire’s bid for an overvalued company could signal the last gasp in an era of magical thinking about markets”.
-Washington Post

You might be able to twist social things, but when it comes to money…cash doesn’t matter.
Again, since most people don’t have the time or inclination to click, here’s the gist:

“According to Tesla’s regulatory filings, Musk has already pledged about half of his 173 million shares of Tesla stock to finance other ventures and activities. He has now pledged an additional 40 percent to secure new debt to buy Twitter. It has only 10 percent of its Tesla shares available as collateral. Since Tesla’s policies allow major shareholders to borrow only 25 percent of the value of each share committed, that would seem to limit further borrowing against its Tesla shares to less than $5 billion.

As long as the collateral — Tesla stock ( TSLA ) — is at or near $1,000 a share when the deal was announced last week, all this borrowing could be pretty bad. In the week since the announcement, it has fallen 15 percent to $870 (BR: Tesla stock splits 3 for 1 on August 4, 2022; it’s trading at $275 after the split), at least in part on fears that the stock might get caught up in Musk’s Twitter misadventure. . If it falls below $750, Musk could run higher than Tesla’s own leverage ratio. And if it falls much below $600 ($200 split adj), the banks may demand additional collateral from Musk, forcing him to quickly sell some of his shares.

If Tesla’s stock falls below $400, the banks will likely demand immediate repayment, trigger a massive, forced selloff of Tesla shares, further depressing the share price and prompting other investors to bail out of the stock.”

So Tesla’s stock fell. Expect Musk to declare victory and get out of the deal, with the breakup fee minimal, at least for Musk, at just $1 billion.

But let’s say it goes through. And right-wing propaganda sites flood in. Would you feel better about buying a Tesla?

i won’t Yes, Teslas are the best electric cars, primarily because the company is far ahead in software, but beware of VW, which started from the rest of the traditional manufacturers, and took the wrong step, but is on its way, never mind having global production and distribution.

And Rivian stock just tanks. So why do we believe that overvalued Tesla will remain high? It’s apples and oranges to some degree, but it’s hard to find almost anyone besides Kathy Wood who doesn’t believe Tesla is overvalued, that the fundamentals don’t make sense.

Now in the fifties and sixties and even in the seventies Jews did not buy German cars.

Do left-leaning, coastal liberals want to show their faith, will they really align with Tesla? German cars were the best in the seventies, but people drove inferior products, Volvos and Saabs, because they didn’t want to pay Mercedes, BMW and Audi.

As for the right wingers… they haven’t even gotten on the electric bandwagon, there aren’t enough of them to support Tesla, at least not at this point.

And it’s not Disney. Elon Musk created this problem!

It’s not like he was reacting to an intrusion on his business. No, he dented his cash cow, Tesla, trying to save the world. I would have taken disciplinary action if I was on the board. Or be a shareholder lawsuit. This guy is single-handedly jeopardizing their investment in a car company that has nothing to do with Twitter.

To take position…

Do this throughout the day, it bonds your acolytes to you. But unlike Twitter you don’t have to appeal to everyone. You can live a fascinating life near a small part of America. But a car company? It has to have a wide reach, with fans at every end of the political spectrum.

If I needed a new car right away, I would hesitate to buy a Tesla And sure, there may have been wait times in America, but in China there was a slowdown… nothing lasts forever unless it disappears from the market.

People still buy Apple products because of Steve Jobs. They believed in him and his mission. That’s how important a figurehead is. I don’t know anyone who believes in Chrysler, except gearheads.

Fandom smooths out the bumps in the road, providing a ready customer base eager to immediately adopt your new products. You never alienate your fans, at least not intentionally. This is a rule in show business.

And to be clear, what Elon Musk is doing is show business. He loves attention, ink, the illusion of power. He believes he is a rock star. And its underlying product, Tesla, is pretty good.

But there are acts in history who blew up their careers overnight. Billy Squier is the best example. Original to your image. And if your picture takes a hit it doesn’t matter how good the underlying music is, people stop listening to it, maybe not all of them, but enough to put a significant dent in your business.

Poll Tesla owners how they feel about Musk. They used to testify, now they don’t.

Do you really want to align yourself with the Elon Musk brand?

I don’t.

~~~

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