You'd arguably have a case that Musk is not acting in the interest of Tesla and is using his Tesla position to enrich himself rather than the Tesla company. Exactly what the "CEO is supposed to serve shareholders" is all about.
Just being tangentially related to the company isn't enough to justify it imo. You could also buy a lot of twitter ads for the cost of having devs come over.
Doesn't USA have the tax concept of "transfer pricing"?
Musk (who is definitely the beneficial owner of Twitter and probably of Tesla too) is providing "free" consulting service of Tesla employees for Twitter -> without an invoice and without tax. (or maybe there will be an invoice?)
In EU that should be taxed (and also invoiced) - with similar prices as a consulting provided by a consulting company that does code reviews. The tax office is interested most in the missing tax of course.
> Later, people inside the company reported that Tesla engineers were in fact reviewing the code.
There’s very little here to make any kind of judgement from.
Perhaps they were being paid for some private work outside of their employment. Maybe there’s some kind of arrangement in place to cover the costs of their time. From the outside we simply don’t know.
Quite sure this is just false, as I've done this in some contexts before, would be great to hear from an eypert. - Consulting pro bono, even during hours on another company should generally be fine, it might just make it more likely to be tax audited.
The counter argument is that Tesla has created more shareholder value over the past few years than any other single company, and in fact more than a ton of whole market segments. I mean, investors know he's sort of a loon, this is hardly the weirdest thing he done[1], and they're still on board.
And FWIW: if you really want to structure this in a shareholder-friendly way, Twitter can just pay Tesla a consulting fee. Given that they're a private company now, that's almost literally as simple as just writing a check.
[1] I mean, seriously, if "I'll buy TWTR for $40B!" didn't spook the market, you think they're really going to freak out about a few hundred hours of engineering time?
Proven track record gives you a really, really long leash. Only Steve Jobs has attained the rarefied air of being able to do whatever the fuck you want that Musk has.
True. Watching him shoot rockets into space from my backyard 3-4x a month and seeing a half dozen Teslas on the road every time I drive a few miles isn’t very substantive at all.
What about FSD? Boring Company? Robo Taxies? Solar? Cybertruck? Neurolink? Mars colonies? Elon has had some amazing successes, that's just a fact, but judging what he will accomplish based on what he says is almost always a losing bet.
Boring Company is right up with Tesla and SpaceX on the success trajectory by lots of measures. This is a company that just started from nothing a few years ago, and it’s already building a massive transit project, and is in final bidding in several other major projects.
They’re already building their own tunnel boring equipment.
The company raised $675 million at a $5.65 billion valuation, putting it ahead of several S&P 500 stocks in market cap, closest to Alaska Airlines.
To say this is unusual is an understatement.
At this point in SpaceX history, the company had yet to launch Falcon 1.
I think a whole lot of people are going to be mightily shocked at how successful this company will turn out. In ten years, when it’s clear how successful it is, everyone will pretend the idea was stunningly obvious and was only successful through public financing, or something like that.
Boring Company is all hype, it's current trajectory is failure.
> it’s already building a massive transit project
It's only massive in terms of wasted taxpayer funds. The Vegas tunnel is a boondogle, and per Elon's signature style, completely unlike anything that he promised, their next tunnel will be the same.
> In ten years, when it’s clear how successful it is, everyone will pretend the idea was stunningly obvious and was only successful through public financing, or something like that.
I won't. If boring company has built any noteworthy tunnels within the next ten years, feel free to come back and have yourself a dropbox moment with my comment.
> It's only massive in terms of wasted taxpayer funds
I'm confused, because you called-out the Vegas tunnel, but are you claiming a 30-mile, 55-station tunnel is not a massive project? Or are you referring to the already-built 1.7 mile LVCC Loop?
Beyond that, there are no taxpayer dollars used in the project. It's entirely privately financed. In fact, the system pays a concession fee to Las Vegas.
> If boring company has built any noteworthy tunnels within the next ten years
Well, TBC is already constructing the 55-station Las Vegas Loop as we speak. It's scheduled to open in 2 years, at least partially by Super Bowl LVIII in Vegas in February 2024. The entire system will not be done, but enough of it will be to be noteworthy.
> feel free to come back and have yourself a dropbox moment with my comment.
I will try to remember to do that! Don't worry, you won't be the only one who got this wrong.
I would love to agree but it's simply not correct. They are buying existing tunneling machines and there is nothing yet to suggest a step change.
The radical proposals in terms of stripping out safety equipment for operational tunnels may prod some development, but ultimately any gains here are not going to be captive and will just result in revised client expectations (outside Boring funding & delivering projects worth $10bn+ individually themselves, with no public involvement).
> They are buying existing tunneling machines and there is nothing yet to suggest a step change.
That is incorrect. That is how they started, but they are now using Prufrock 2, which is both designed and built by The Boring Company, though I agree there has yet to be much of a step change in technology. Prufrock 2 is not the fastest tunnel boring machine in the world, and its porpoising feature has had some setbacks, needing to be dug out.
But all of this kind of misses the point. It ultimately doesn't matter if the tunnel boring machine is extraordinarily better. The Boring Company is applying the exact same philosophies that has made Tesla and SpaceX successful: extreme vertical integration and rapid iteration.
What matters is that TBC controls the boring machine. They control the design, they control the manufacturing process, and they have a willingness to experiment and iterate. The company is 5 years old and is now on its fourth tunnel boring machine.
And given the design of TBC transportation systems, there's no reason you can't have a dozen tunnel boring machines running simultaneously.
There was nothing remarkable about Falcon 9 when it launched. It was old tech, with a few good ideas, and one killer feature: extraordinary cost savings.
What about Sun King? Dig It? Don't Bother Me? Boys? Flying? (all terrible Beatles songs)
When you have successes like Tesla and SpaceX and PayPal it doesn't really matter how many failures you have. This isn't like being an airline pilot where you're judged by your worst outing.
Do I believe him when he says "Teslas will be full self driving in six months" like he has for the last 10 years? No. He's definitely a PT Barnumesque figure.
Do I believe that Tesla will get to full self driving eventually? Yes.
You want to make the accusation that the business failures of someone who has had legitimate successes on the scale of Elon Musk are con jobs then the burden of proof is on you. And I don't see an proof. Not from you, and not from anyone else who says it.
Hyperloop is very much a con job. "Full Self Driving is just a year away" is very much a con job. The cybertruck is a con job. The Tesla Semi is a con job. The tesla robot is a con job.
> but judging what he will accomplish based on what he says is almost always a losing bet.
He is literally the richest man in the world. Do you think he isn’t a successful gambler because of a few $1 bets that haven’t paid off (yet on many) vs the several $1000 bets that have?
The rocket landing stuff largely borrow from DC-X and the spinoff work at NASA (+Lars Blackmore), all originally Strategic Defense Initiative development.
He used all that money from Mike as collateral for loans to Tesla
Rome wasn't built in a day and were all standing on the shoulders of giants. However you need trailblazers to cut through and push the threshold. Elon is a hacker and disruptor and entrenched interests would like to just keep things they way they were, thereby pumping money into PR firms to talk down disruption and innovation. You're either a paid talk downer or a victim of that.
This is exactly what I mean. Musk had very little to do with actually designing rockets. Much like Thomas Edison his main skill is getting credited for the work of other people.
I keep seeing people say that Musk had little to do with SpaceX's technical side, and I wonder where this meme (in the original Dawkins sense of the word) is coming from.
If you watch the EverydayAstronaut interviews with Musk it shows that he has a deep understanding of the engineering tradeoffs and design reasons for many components of the rocket, and in fact is being quite careful with what he can share due to not wanting to leak company secrets. In fact, some of the questions that were asked in the earlier interview were re-referenced in a later interview as having been considered and leading to design changes.
I think Musk is a smart engineering type who sees finance, PR, politics etc as just another engineering problem, with all the pros and cons that creates. He's had a ton of success in hard-tech fields just by not being an idiotic pointy-haired-boss in a world where finance and political people are repeatedly being put in charge of projects and companies whose tech they don't understand. This doesn't mean he is likeable, or someone you'd want to have a beer with, or moral, or anything else. But it does mean he is capable of managing a tech company better than most, if we use the success of the company as our capable-of-managing-a-company metric.
I'm happy to see information to the contrary, but so far this is the closest I've seen to actual human/work style interactions with him. What would you suggest as alternative data sources which could be used to build a more accurate opinion?
No, his main skill is believing that big things are possible, and then being willing to commit resources and to be patient to let those possibilities come to reality when many others are will not.
Well I have seen the world, and I am not biased or frankly even a Musk fan, despite finding myself defending him as of late here on HN. I don’t own a Tesla (find them ugly vehicles), don’t use or care about Twitter, but I’ll admit that I think the SpaceX stuff is pretty exciting mainly because I can see it.
I said this on another thread but I will say it here too. Musk’s genius and value is not his engineering skill but his willingness to think about big possibilities and then be fearless and patient enough to make what many others think are risky (and stupid) bets on those possibilities.
We need folks like that. They move the needle far more than the random HN engineers who feel that the Musks and Edison’s of the world aren’t relevant because they “didn’t design or engineer” the technologies they made viable to the masses.
Musk and Edison’s roles—were not as the engineers of technology, but as the facilitators of the engineers.
> Making a bunch of money does not give you ethical credits you can spend later.
If this wasn't in the realm of how moral calculations work in society, then you wouldn't need to make this argument. People do accept funny moral trades and it's not clear how the calculus works. Tesla shareholders accept the fact that the guy in charge sometimes plays games like "FUNDING SECURED $420", so the fact that some Tesla engineers were borrowed/contracted/whatever is just a tiny detail in the big picture.
Given the timeframe, I think people are skeptical that 1. Elon arranged for twitter to contract with Tesla for code review and 2. Recused himself from the negotiations regarding scope of work and rate charged.
Who cares? The companies in his orbit benefit substantially from the cross pollination between them, and the PR opportunities that generates - much more than any arms-length negotiated rate would. Avoiding the type of fake work that you describe is very helpful for achieving the high iteration speeds his companies have.
that announcement most certainly did spook the market and news about the Twitter acquisition has been a drag on TSLA all year. You may have noticed the stock trading for slightly more than half of its peak value.
There’s the presumption here that Tesla is footing the bill. For all you know Tesla hired out of these workers on contract and the Twitter is footing the bill.
If Twitter is paying under fair market rate, that's collusion to benefit Twitter at the expense of Tesla.
If Twitter is paying above fair market rate, that's collusion to benefit Tesla at the expense of Twitter.
If Twitter is paying exactly fair market rate, why does it need to be Tesla employees? That starts to look like self-dealing to make Musk's live easier.
You can't really win in this situation, which is why any sane executive avoids such a conflict of interest in the first place.
(I'm not claiming there will be any repercussions mind you - if Musk got away with SolarCity he'll surely get away with this.)
Yes, because it's not really public vs. private that matters, in both cases it's whether the shareholders care. (If it's public they complain to the SEC, if it's private they complain to their contract lawyers who hopefully included some accountability in the contracts.)
This is also why Musk can get away with it - he's got fanboys, albeit of slightly different types, dominating the shareholders in both cases. (In the case of Twitter he may even be personally the majority shareholder with no obligations beyond cash now, but who knows...)
I'm not really sure - I think that depends on the details of how X Holdings is set up, which I'm not going to bother looking into. I should've used a more general term like "creditor", but the point remains.
We don't have really any visibility into what short- and long-term obligations Musk owes the various financing parties.
I don’t know what this “collusion” is. Companies with common ownership often cross-bill and this is used as a vehicle (search “transfer pricing” if you want to know more) to move profits around and optimise tax. There are restrictions on transfer pricing, but there’s no concept of collusion here and in particular there really is no restriction related to fair market rate. There are lots of ways to do the billing part of this which would be perfectly normal.
It’s a terrible idea because it’s a nasty way to treat people at the acquired company and probably ineffective at getting any useful information, but Elon Musk has shown that he doesn’t have many scruples about that sort of thing.
But SpaceX, Tesla, and Twitter don't really have common ownership in the normal sense. They're not owned by the same holding or parent company, they're not owned by the same single person, one is public and two are private, etc.
If Tesla engineers are spending time on something not beneficial to Tesla but instead to Musk personally or to X Holdings, that's absolutely something Tesla shareholders could sue for.
No they couldn’t. Fiduciary responsibility doesn’t mean you have to only do things that shareholders agree with. It means you have to act in good faith to represent their interests.
In this case Musk could easily say he had spare capacity, and if there’s crossbilling (which can happen retroactively if there was an objection) there’s really nothing to sue over. If he can get tesla engineers to try to build a cave rescue submarine to buff his public persona he can get them to do this.
As I said, I don't believe any significant TSLA holder will actually sue Musk. It's clear by now they're comfortable with Musk's view that his interests and any of his companies' interests are equivalent. But if they did, they'd have a good case unless Twitter overpaid (at which point the issue would be any Twitter shareholders).
You probably wouldn't since those engineers probably signed consulting agreements with Twitter, and are being paid by Twitter, not Tesla for this work.
Curious, why would you think that a person who has trouble finding a group of banks (what is a group of banks called, a flight?) to produce the cash that he owns on paper, is solely interested in chasing more cash? Is it not more believable that he has a social agenda? At this very moment, I find it believable that Musk is drawing a line in the sand to be seen by folks who would have others irreparably silenced if their views aren't fashionable.
Shareholders already know he’s part time and has multiple jobs. As for leveraging talent, I doubt it’s effecting their productivity in a significant way or deadlines are slipping due to this.
Your doubts will not stand up in court, even if they are grounded in reality, which *I* doubt. These engineers took time off work during work hours to go somewhere and do things that are not in service of the publicly traded company they’re employed at. That’s not something you can just hand wave away.
I used to work for a guy who was a shareholder in multiple companies, and I would do work for the other companies all the time. When I did the company I actually worked at would just bill the other company for my time. It’s hardly different from doing work for and billing it to a different department.
Same, for nearly 10 years, I got prostituted to nearly every company a major shareholder had a piece of, my fee was just billed to whoever I was doing work for at the time. No big deal. I really do not understand the surprise at this, this is pretty normal. I think it’s just media tossing shade trying to find something, anything.
He doesn’t own all of TSLA, so if there’s no contract, he’s appropriating TSLA to his private project. If it was done off the books, it’s syphoning money from something you don’t own to something you do.
You are taking as gospel a uncorroborated rumor from what is likely a single Twitter engineer who is salty that someone outside the org is reviewing their code.
You assume that money is not changing hands and that it’s off the books? Where is your evidence for that? You are making that assumption based off your own confirmation biases.
Same. I worked for a company owned by a group of friends that owned a few more businesses. We'd do work for all these companies and just log the hours in our human resource system - accountants figured out inter-company payments. Some employees were employed at multiple of these companies at the same time as well.
Leaving aside the maximum potential upside of a lawsuit (Musk writes a check to Tesla for... $100k?), it's entirely possible that Musk asked them to take a personal day, or that they had already worked 40 hours that week, or similar. After all, I can see a trusted TSLA engineer seeing a way to get a promotion being transferred to TWTR treating it as an "interview" half-day and going unpaid.
I said they would get promoted by moving to TWTR. It could be Musk inviting them to interview as managers as TWTR as much as he's using them to evaluate TWTR talent.
Yes, the whole pagelong discussion here about those little peanuts is one of the most disconnected and ridiculous one I have ever seen on HN, lol sorry. There must be many hearts broken or why all the fuss, I don't get it.
Heaven forbid Tesla engineers decide to feed the homeless during their work hours at the CEOs directive. That's not servicing the publically traded company.
Except that’s not what they’re doing, so I’ve no idea why you think that a relevant argument. They’re working for a different public company while being paid by Telsa.
> They’re working for a different public company while being paid by Telsa.
Actually, it's worse than that. They're working for a different, private company, one which happens to be owned by the CEO of TSLA, who has a legal and fiduciary duty to the TSLA shareholders.
Why would a TSLA shareholder make a fuss? It is likely that Tesla will bill Twitter for the use of staff resources. Other than that, being on good terms with the owner of Twitter is a possible advertising opportunity/tie-in in the future.
Your example generates company pr value, employee morale, etc. Meanwhile there is no value being generated to Tesla by moving these engineers to some side project for another company.
Musk’s job as CEO is to work in the best interests of the company. Using the company's resources to buy/build a completely unrelated entity for his personal gain is most definitely not ok.
If he wanted to do what you’re saying (enrich Tesla with those features), Tesla should be buying Twitter. The scenario you're presenting, by the way, is exactly how Facebook/Meta acquired Instagram. However Facebook acquired Instagram, not Zuckerberg personally.
Unless the Tesla engineers also can learn a thing or two from the internals of Twitter and bring back to benefit Tesla. Or they are planning to do things that will benefit both parties in the long run
I don't see your "Period" here. Perhaps it is in best interest of both Tesla and Twitter to cooperate on some topics, but not to the degree of acquisition of one by another.
Remember that SpaceX and Tesla do have a common VP for material engineering, Charles Kuehmann? It makes sense for them to share knowledge on materials.
In the same way, there may be a cause for sharing software engineering resources/know-how between Tesla and Twitter without actually merging the entire companies into one behemoth.
That’s not “unless” - it’s a translate post hoc rationalization. It’s a stretch that they’d be working on that feature - considering the distracted driving problem it’s something of a liability - but even if they were, that might mean that you send a couple of people from that specific team to talk APIs or something. Pulling random engineers over to review things outside of their specialty doesn’t make any sense.
Yes, and people use them while driving because the vehicle doesn’t prevent it. You can get away with that kind of legal attempt to dodge responsibility but at some point public awareness catches up with you, similar to how telling people to drive safely wasn’t enough to avoid generations of safety technology becoming legally required.
Great, next my car will be Tweeting all the real time telemetry (I405 North, by exit 18, lane #1, 81mph, throttle at 61%, 4 hands-off-steering-wheel events detected in the last hour, and 2 eye tracking sync failures due to checking out the sports car in lane #2".
Musk, being Musk, will find this amusing and start auto-tweeting "Kill" videos of Tesla's racing with other cars on the freeway."104 Z06 kills on the West Coast Today!".
