This week’s Crypto Biz explores Elon Musk’s plans for X, the Italian central bank’s take on DeFi, PacWest’s merger with Banc of California and more.
Elon Musk gave a lot of new information about Tesla (TSLA -1.41%) during the company’s conference call, but three things stuck out. In this video, Travis Hoium covers the surprises about FSD, production, and NACS plug licensing.
*Stock prices used were end-of-day prices of July 23, 2023. The video was published on July 24, 2023.
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The rebranding of Twitter as X is part of Musk’s vision to create an “everything app” like WeChat.
The price of meme token Dogecoin (DOGE) soared to its highest in recent times following a surprise announcement by Twitter owner Elon Musk. Musk triggered the surge when he announced plans to change the Twitter name to X. DOGE surged by 10% in the past 24 hours, according to CoinGecko data.
Dogecoin’s Rise in Popularity
Dogecoin was created in 2013 as an internet meme token. Dogecoin’s popularity has grown over the years, thanks to its loyal fan base and celebrity endorsements, including from Elon Musk.
Musk has always been a vocal supporter of Dogecoin, calling it the future of currency. In April, Musk replaced the Twitter logo with the Dogecoin logo briefly and sparked a 30% spike in the price of the asset. He also teased the possibility of DOGE payments for Twitter’s premium service subscription.
Because it has no real utility, experts warn that dogecoin is highly volatile and risky and that investors should be cautious before buying it. Should X allow DOGE as a means of payment, everything about the token could change.
Dogecoin Price Speculations Fanned by Musk
Given Musk’s history with the meme token, it didn’t take long for the Twitter rebrand announcement to fuel speculations about DOGE. Since the token is already accepted as a form of payment at Tesla, analysts believe X could also do the same.
Real Vision CEO Raoul Pal said:
“He will use crypto to be able to make global payments for creators, etc. My guess is he uses Doge.”
“The speculation is that advertisers could be able to pay DOGE for ads and for other uses on Twitter,” Kryptomon Chief Marketing Officer Tomer Nuni explained.
To broaden the speculation, some users pointed out the X and D in Elon Musk’s profile location. They conclude that while the X refers to the Twitter rebrand, the D could be a reference to Dogecoin. Notably, much of the speculative moves are happening on UpBit, which is known for attracting speculative plays.
Twitter to Morph into an Everything App
Meanwhile, the rebranding of Twitter as X is part of Musk’s vision to create an “everything app” like WeChat. The app is expected to offer various services such as audio, video, messaging, payments, and banking.
According to Twitter CEO Linda Yaccarino, users should expect more features and innovations with the rebrand to X. She noted that the company was “just getting started”.
Already, Musk has purchased the X.com domain, which now redirects to Twitter. He has also asked Twitter users to submit their logo suggestions.
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An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
The popular social media platform Twitter officially rebranded to X after months of teasing by its former CEO, Elon Musk. The rebranding saw the popular social media app ditch its recognizable bird logo and replace it with a simple X. The rebranding also saw the social media app change its color scheme from blue to black.
As part of the rebranding, Twitter’s URL was changed to x.com, a domain name linked to Musk’s 1999 financial services startup, which was sold to PayPal.
now points to https://t.co/AYBszklpkE.
Interim X logo goes live later today.
— Elon Musk (@elonmusk) July 23, 2023
X.com was an early online bank, and the company was initially funded by Musk and Greg Kouri, who went on to fund Musk’s later ventures, Tesla and SpaceX.
Musk uses the letter X in several of his business interests, including SpaceX and Tesla car models.
Musk established X Corp. in March as the parent company of Twitter, making way for Twitter’s rebranding. The rebranding is part of Musk’s vision to create a “super app” with multiple functionalities. In April, Twitter introduced a new feature that allowed app users to access the crypto market and other financial market services from within the app.
Musk’s tenure as the head of Twitter was controversial from the start. However, his plans to transform Twitter began long before the takeover.
In a recent interview, Musk reiterated that the main motive behind rebranding to X was to create an “everything app,” a concept popular in China. Chinese social media applications, such as WeChat, are used for text and video calls, and have provisions to pay bills, book cabs, book restaurants and other financial activities without leaving the app.
Musk said if done correctly, X could become a popular platform for finance, banking, payments and data, and over time it has the potential to become “half of the global financial system.”
X is finally arriving!
X will be an “everything app” i.e. super app for U.S. (like WeChat of China)
• Social: network, msgs, video, content
• Finance: banking, payments, data“Overtime it would be HALF of global financial system” – Elon Muskpic.twitter.com/wWywAdYRZR
— Brandon Hoffman (@BrandonHoffman_) July 14, 2023
However, The rebranding of Twitter didn’t prompt much support from many users who believed ditching the famous blue bird for a new concept was not a good idea.
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Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, January 27, 2023.
Jonathan Ernst | Reuters
Elon Musk’s multiple ventures and the relationships between them are facing increased scrutiny as the Tesla CEO continues to add more to his plate.
During Tesla’s second-quarter earnings call on Wednesday, Truist analyst William Stein asked Musk about yet another tech venture he has started up and incorporated in Nevada: xAI. Musk recently said that the artificial intelligence startup aims to compete with Google Bard or OpenAI’s ChatGPT someday, and plans to collaborate with Tesla on software and silicon alike.
Stein asked him, “For investors that think there might be quite a bit of value in the AI features and products of Tesla, it might be concerning to see you pursuing another endeavor where AI is the focus. Can you talk about how xAI might overlap, might perhaps compete with Tesla or in other ways perhaps it enhances the value of what Tesla does?”
Musk claimed that xAI and its focus artificial general intelligence on would bring some value to Tesla, and talked about recruiting as an example.
“There were just some of the world’s best AI engineers and scientists that were willing to join a startup but they were not willing to join a large, sort of relatively established company like Tesla.” He added, “So I was like, OK well, better it’s a startup that I run than they go work somewhere else. That’s kind of the genesis of xAI.”
In addition to the xAI example, he said he was only able to entice a top materials science engineer away from his job at Apple by promising the engineer could work concurrently for SpaceX and Tesla. The engineer in question, Charles Kuehmann, joined Tesla in late 2015 and now holds the title of vice president of SpaceX and Tesla materials engineering, reporting directly to the CEO.
The issue of Musk and his multiple ventures also came up earlier this month, when Sen. Elizabeth Warren, D-Mass., urged the Securities and Exchange Commission to investigate its Twitter ties and related corporate governance issues.
Musk led a $44 billion buyout of the social media company last year and appointed himself CEO there temporarily. He is now the controlling shareholder, CTO and executive chair of Twitter while holding down the CEO role both at Tesla and at his aerospace and defense company, SpaceX. He’s also the founder and funder at the brain-computer interface startup Neuralink and tunneling venture The Boring Co.
Tesla is the only public company among the bunch. And it has never disclosed to shareholders exactly how much talent, time and money it has spent helping Musk at his other ventures, or why sending people over to Twitter would comprise a reasonable use of Tesla resources. Musk previously enlisted Tesla, SpaceX and The Boring Co. employees to assist him with his Twitter takeover, as CNBC reported.
At least one senior Tesla employee has jumped ship to Musk’s X Corp., the parent company of Twitter. Court filings revealed that Dhruv Batura, who had worked at Tesla since late 2013 and was a senior manager of business operations finance there, is now a senior director of finance at X Corp. Batura was posting job ads for X Corp. on Twitter on the day of Tesla’s second-quarter earnings report.
In a May 2023 proxy filing, Tesla did disclose a few details about its related party transactions. Among these, Tesla revealed that “Twitter is party to certain commercial and support agreements with Tesla. Under these agreements, Twitter incurred expenses of approximately $1.0 million in the aggregate in 2022 and $0.4 million in 2023 through February.” Tesla hasn’t said what, exactly, Twitter is buying from the company.
Risks include lack of focus, employee burnout
According to London Business School professor of organizational behavior, Randall S. Peterson, “Musk is making a convoluted argument in saying ‘I am helping Tesla by keeping these great people from joining a competitor.’ It’s a counter-factual you cannot ever really test or challenge in an investigation.”
Most startups fail, Peterson noted, and people who want to create startups were probably not likely to join Tesla’s direct competitors in the automotive industry.
Peterson said Musk’s many ventures can create risks for Tesla, and shareholders should seek more details.
“It’s hard to focus on and excel at any one thing when you run multiple companies,” Peterson said. “That’s a risk around the CEO himself. Would most companies’ shareholders tolerate their CEO running several other companies at the same time? The answer to that is probably no. So that raises a question of what the Tesla board is doing, whether they are independent at any level, or are so enamored of Musk that they not only tolerate his unusual way of working, but might be missing significant fundamental problems as long as the money keeps coming.”
Boards at companies that have ended up in crisis, like Enron and the Royal Bank of Scotland, failed to rein in their CEOs despite signs of problems for many quarters, he noted.
Another risk, Peterson said, is that Musk’s employees may feel pressure to work on many projects at once for him concurrently, outside of Tesla. In a quest to please him or rack up new work experience, employees may fail to recuperate from their work and burnout. Burnout, he said, can lead to high attrition or poor performance.
Finally, the professor noted, Musk may be creating distractions that impede focus among his employees, even if his intention is to cross-pollinate among his businesses.
“You need to be super-focused to be the best at something, both as an individual and as a corporation. That’s the reason we have seen a trend away from conglomerates which were big in the 70s to companies that are more focused today,” the professor said.
Still, Musk appears to be doubling down on unapologetic collaborations between companies in his growing empire.
On Wednesday’s call, he was asked to give an update on Tesla’s progress developing a humanoid robot dubbed Optimus. Musk waxed on in a futuristic vein, saying that Tesla may one day collaborate with Neuralink to make robotic, prosthetic arms and legs to help amputees return to full mobility or dexterity.
Tesla did not immediately respond for a request for comment. Twitter responded with an automated reply containing a crude symbol.
— CNBC’s Rohan Goswami contributed reporting.
Tesla Inc. CEO Elon Musk appears to be involved in a secretive project constructing an all-glass home near the company’s Austin-area Gigafactory, as reported by The Wall Street Journal. Dubbed Project 42 by Tesla employees, this initiative has been shrouded in mystery over the past year.
The Wall Street Journal sources claim that Tesla’s board launched an investigation into concerns that Musk might be using company funds to build his glass house. The project is said to involve the purchase of millions of dollars worth of special glass, which raised eyebrows among employees. Limited liability firms associated with Musk and Tesla executives have also acquired substantial amounts of land in the vicinity.
Though various design concepts are reportedly under consideration, the transparent structure will be situated just outside of Austin, Texas, with a view of Tesla’s headquarters in the distance. One proposed plan envisions a hexagonal shape with waterfront views, while another resembles the boxy design of Apple’s store on Fifth Avenue in New York.
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Following the substantial glass order, employees’ concerns were raised, prompting an internal probe to determine whether any misuse of company resources had taken place. As of now, the status and findings of the inquiry remain undisclosed.
The company had disbanded its public relations (PR) department, and Musk has refrained from commenting on the reports. The board’s primary objective was to establish Musk’s level of involvement in the project and ascertain whether company resources, including employee time, were being used for the construction of the glass house.
Stringent Board Requirements
For followers of the billionaire entrepreneur, news of the glass house might come as a surprise, given Musk’s previous statements about not having a desire to own a home. High-profile tech executives occasionally receive perks, such as private jets, but Tesla’s approach is notably stringent, requiring a board committee audit for expenses exceeding $120,000 involving people with material interests.
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Musk’s prominence as a major CEO adds significance to this case, especially considering his history of legal entanglements. He is still embroiled in a dispute with the Securities and Exchange Commission regarding his tweets about financial data and previously faced a defamation lawsuit from a British cave explorer.
In May 2020, Musk set the internet abuzz with one of his tweets. He declared his intention to sell nearly all physical possessions, asserting, “Will own no house.”
During an interview with TED head Chris Anderson in 2022, Musk delved further into his unconventional living situation, shedding light on his perspective regarding the criticisms aimed at billionaires and their opulent lifestyles. When confronted with the notion that some critics find such extravagance offensive, Musk acknowledged the potential problem it could pose, saying, “For sure, it would be very problematic if I was consuming billions of dollars a year in personal consumption.”
Musk’s Circumstances
He was quick to clarify that his own circumstances were far from extravagant. He disclosed that he didn’t own a home, opting to stay with friends instead. Musk’s schedule often took him to the Bay Area, where much of Tesla’s engineering was concentrated, and in such instances, he would rotate through the spare bedrooms of his friends’ houses for lodging.
Musk’s frugality extended beyond housing. He shared that he did not indulge in luxuries such as yachts or extravagant vacations. But one notable exception to this minimalistic approach is his reliance on a private plane. He admitted that having access to a plane served a practical purpose, providing him with valuable hours for work, which aligned with his unrelenting commitment to his ventures.
Given the prominent entrepreneurs position as the CEO or Founder of companies like Tesla, SpaceX, The Boring Company, Neuralink and many others, this is justified as a necessity rather than a luxury. The growth of these startups is what skyrocketed his wealth status of ‘world’s richest man.’ The lucrative nature of startups has even prompted a recent surge in startup investing among retail investors. Hundreds of millions are being invested a year in startups like Jurny, an AI-powered rental management platform that recently launched on popular startup investing site, Wefunder.
As Project 42 continues to pique public interest, these insights into Musk’s way of life add yet another layer of intrigue to the enigmatic glass house being built exclusively for the visionary entrepreneur. It remains to be seen how this project fits into his overall philosophy and whether it will ultimately become the elusive home he once declared he would never own.
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This article Elon Musk Reportedly Used Millions of Dollars in Tesla Funds To Secretly Build Himself A Literal Glass House — After Famously Saying He ‘Will Own No House’ originally appeared on Benzinga.com
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Insufficient earnings on Twitter suggest that the platform’s advertising revenue may not have rebounded as quickly as previously anticipated.
Elon Musk, the CEO of Tesla and SpaceX, who also holds the position of CTO at Twitter, recently revealed the social media platform’s ongoing negative cash flow and the weight of its debt burden. Musk cited a 50% drop in advertising revenue and a significant debt burden as the reasons behind Twitter’s ongoing cash flow challenges.
Responding to a tweet about potential recapitalization options, the billionaire entrepreneur emphasized the need for Twitter to achieve positive cash flow before pursuing other endeavors. He further revealed that the popular social media platform he acquired for $44 billion did not witness the expected increase in advertising revenue in June but expressed some optimism for July.
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
Musk also said that July showed more promise in advertising revenue while acknowledging that Twitter Spaces and the audio chat feature are currently generating costs without bringing revenue to the company.
The new development highlights the ongoing struggle to achieve positive cash flow at Twitter, despite aggressive cost-cutting measures implemented since Musk’s acquisition of the company in October.
Twitter Faces Annual Interest Payments of $1.5 Billion
Since taking over Twitter, the Tesla CEO has implemented significant changes, including staff reductions and adjustments to content moderation policies. The billionaire wasted no time implementing a substantial workforce reduction, cutting 75% of Twitter’s global employees following the deal’s completion.
The move aimed to streamline operations and reduce costs. In addition to the workforce reduction, Musk revealed that Twitter has successfully slashed its projected non-debt expenditures from $4.5 billion to $1.5 billion for 2023. Moreover, the acquisition deal came with a substantial debt burden for Twitter. Due to the debt, the platform now faces annual interest payments of approximately $1.5 billion, adding further strain to its financial situation.
A New York Times report also disclosed that Musk failed to settle hundreds of thousands of dollars in outstanding bills owed to travel vendors. The company’s executives accumulated these expenses before the official acquisition in 2022.
Despite the cost-cutting measures and workforce restructuring, Twitter continues to grapple with negative cash flow. The social media platform has faced challenges with advertisers reducing or halting their ad spending due to concerns relating to content moderation and uncertainty about Twitter’s future.
Elon Musk Anticipates Twitter to Become Cash Flow Positive
Insufficient earnings on Twitter suggest that the platform’s advertising revenue may not have rebounded as quickly as previously anticipated. In an interview with the BBC in April, Musk indicated that most advertisers had returned to the platform, and he expected Twitter to become cash flow positive within the second quarter.
To address the issues of poor advertising revenue and other financial challenges at Twitter, Musk appointed Linda Yaccarino, a former NBCUniversal marketing executive, as Twitter’s new CEO. Yaccarino’s background in advertising is expected to prioritize the revitalization of Twitter’s ad business.
As such, the new CEO has outlined plans to focus on video, creator, and commerce partnerships and has engaged in early discussions with various entities, including political and entertainment figures, payments services, and news and media publishers.
Last week, Twitter announced a revenue-sharing program for selected content creators. However, some users expressed disappointment at the program’s limited scope, which is currently only available to Twitter Blue verified subscribers who meet certain criteria.
The program distributes a portion of the ad revenue generated from ads placed in replies to tweets. Several influencers and creators, including controversial figures like Andrew Tate, have revealed that they received payments through this program.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
Twitter executive chairman Elon Musk alleged in a social media post that Meta is “cheating” over the release of Threads, a text-based social network resembling Twitter.
While Musk wrote that he is fine with competition, he made it clear that he would not tolerate cheating. The billionaire’s remarks come after Twitter lawyer Alex Spiro sent a letter to Meta CEO Mark Zuckerberg threatening legal action.
Competition is fine, cheating is not
— Elon Musk (@elonmusk) July 6, 2023
On July 5, Spiro wrote in the letter that Twitter has the intention to “strictly enforce its intellectual property rights.“ The firm also demanded that Meta immediately stop using Twitter’s trade secrets.
According to Spiro’s letter, Meta hired former Twitter employees with access to confidential information, including Twitter’s trade secrets. Spiro wrote that Meta assigned these employees to develop a “copycat” application called Threads, alleging that the company used Twitter’s trade secrets and intellectual property to speed up the development of the competitor app.
Furthermore, Spiro also highlighted that the letter serves as a formal notice to Meta to preserve any documents relevant to a dispute between Twitter and Meta, as well as former Twitter employees that Meta now employs.
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Spiro also noted that Meta is not allowed to engage in any crawling or scraping of Twitter’s followers or following data. The lawyer wrote that this is prohibited for any reason without the company’s prior consent.
On July 5, Meta’s new text-based social network, Threads, was released in 100 countries. The app was rolled out days after Twitter’s rate limit debacle when the social platform temporarily limited the number of posts users could read.
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Meta founder and CEO Mark Zuckerberg has emerged as a clear favorite among betters in a proposed “cage match” with Twitter owner and Tesla CEO Elon Musk.
In the 48 hours since the mixed martial arts challenge was issued by Musk, sports betting firms and odds providers have already delivered preliminary odds for the billionaire’s bout.
If the fight actually eventuates, the Brazilian jiu-jitsu-trained Zuckerberg has been marked with a 77% chance of winning the fight, according to Oddspedia, a sports betting platform that collates odds from several bookmakers.
Betting a dollar on Zuckerberg would potentially pay out $1.20 if he wins the fight, a bet on Musk could pay up to $4.00 if he wins.
Zuckerberg, who stands at a slight height disadvantage at 5-foot-7 (170 cm), has been known as a jiu-jitsu practitioner since September. In May, he managed to place first and second in two jiu-jitsu tournaments in a white belt lightweight division.
His progress even prompted positive reactions from some of the most influential figures in the Ultimate Fighting Championship, such as UFC boss Dana White and former UFC featherweight and lightweight champion Conor McGregor.
Online, several videos of Zuckerberg in training can be found.
Mark Zuckerberg training with BJJ world champion Mikey Musumeci pic.twitter.com/plE3CUpoP7
— Bloody Elbow (@BloodyElbow) June 17, 2023
Musk, on the other hand, is understood to have a bigger frame and height advantage, reportedly standing at 6-foot-1 (185 cm). Not much else can be gleaned about his physical aptitude for combat; however, Musk recently said that he used to engage in “real hard-core street fights” in South Africa, where he grew up.
He also recently posted that he eats a donut every morning and is “still alive,” if that makes a difference.
“I have this great move that I call ‘The Walrus’, where I just lie on top of my opponent & do nothing,” Musk jokingly said in a June 22 tweet.
Yup, that’s me
— Elon Musk (@elonmusk) June 22, 2023
Talk of a potential physical fight between Musk and Zuckerberg first came about on June 21, when Musk said he’d be willing to share the cage with the Meta founder.
Zuckerberg responded on Instagram shortly after with “Send me location” — a popular phrase first uttered by former UFC lightweight champion Khabib Nurmagomedov.
Despite the high anticipation, many don’t expect the fight to actually happen, though it’s not the first time that Musk and Zuckerberg have clashed.
Related: Twitter suspends memecoin-linked AI bot after Elon Musk’s ‘scam crypto’ claim
In 2017, the billionaires engaged in a heated debate over artificial intelligence and its future implications.
Sharing a more optimistic view, Zuckerberg reportedly called out those who believe AI has the potential to create “doomsday scenarios” — events that could result in human extinction or completely end life on Earth.
Musk hit back, stating:
“I’ve talked to Mark about this. His understanding of the subject is pretty limited.”
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