It's right in the post, but just to save folks a click it's a 77% drawdown in the position so it's a substantial move. I see they also trimmed Apple, but, for comparison's sake, looks like that was only a decrease of 4.3% of the position.
Always comes up but think it's worth repeating: if he's not there the stock will take a massive haircut and no Tesla investor wants that regardless of whether it would improve Tesla's car sales or its self-driving. Elon is the stock price for the most part. And just to muse on the current reason, it's not Optimus or self driving, but an eventual merger with SpaceX. My very-not-hot take is that they'll merge within months of the SpaceX IPO. A lot of folks say it ain't happening, but I think that's entirely dependent on how well Elon and Trump are getting along at the moment the merger is proposed (i.e., whether Trump gives his blessing in advance of any announcement).
Tesla's only chance at this point is government money. Consumers just aren't buying. It doesn't help that Elon was heavily involved with Epstein and is constantly spouting white nationalist propaganda on X. This is on top of his gaffe with "My Heart Goes Out to You". Only a certain type of consumer is going to buy from a company like that.
What form would those funds take? I would agree that the government could pull one lever that would cause Tesla's sales to spike and that would be reintroducing the ev credit. To really juice them they'd have to reintroduce and increase it. I don't think there's another lever they have at their disposal that would do anything material. The government buying a bunch of vehicles for a single or multiple departments wouldn't move the needle. Basically you have to incentivize the masses to purchase. Of course none of that would happen with the current admin and congress. EV's are anathema to the platform.
As an aside, the situation at Tesla sure is getting stranger. I don't know if it was yesterday or earlier in the week, but Elon saying that at least one Cybercab will be sold to a "consumer" before the end of '26 for under $30k makes no sense (yeah yeah promises promises). But wasn't the idea that Tesla would control the fleet? Why would they sell a person a Cybercab to operate as a taxi? That would mean that there's profit to be had by that buyer and so why the heck wouldn't Tesla just keep that profit for itself and run the entire operation? Some kind of balance sheet gimmick? Offloading the insurance risk to someone else?
Maybe someone reading this long-ass reply will clue me in. And I get it the majority of the folks these days think it's all vaporware, but doesn't the vaporware at least have to make some sense?
There are a couple different schemes that are used to distribute taxpayer money to cronies. The most common are defense contracts for stuff like the proverbial $1000 hammers and such. There are also infrastructure deals, energy deals, subsidies, and bailouts. I know Musk was pushing for defense contracts earlier but they mostly fell through.
> That would mean that there's profit to be had by that buyer and so why the heck wouldn't Tesla just keep that profit for itself and run the entire operation?
I suspect this is because they have less confidence in the ability of the cab to pay for itself and would rather offload that financial risk on the buyer.
Is this the same time or the same miles driven? I think the former, and of course I get that's what you wrote, but I'm trying to understand what to take away from your comment.
Your comment triggers so many thoughts, but the first one is I'm so friggin' naive, which is embarrassing. In my fantasy world corporations make investment decisions based on risk. They invest in a country like Venezuela and part of the due diligence is evaluating whether things may go sideways, like in any investment, and what plan b is if they do. And if plan b is getting the government to backstop you with money, guns and/or regulations then that would not be a viable strategy.
But, at every level in the US, that plan b is viable. And it's used over and over and over again, from small local businesses with local politicians to the US Federal Government and military for the likes of the oil industry.
At what point do you just accept the truth: that you (me!) are the dumb one because you hold onto this fantasy of how you think things ought to be as opposed to how they are?
Why is plan (b) bad? From my perspective it is certainly how things ought to be. If my property is nationalized in another country by force, I am fully in favor of my country swinging its dick around to get it back.
And what is to say that plan (b) isn't taken into account when doing the risk assessment in plan (a)?
In your world everybody will be at war with each other. The way to deal with the risk of foreign nationalization of your assets is to price it in or to forego the opportunity. Expecting your country to go to war for your private interests is ridiculous. You can go to court if you want and if you lose you'll have to take your lumps.
It must be lovely to exist in a world where you think you can punch someone in the face and nothing will ever happen to you if they don’t respond immediately.
Good thing the window of opportunity for retaliation is now firmly closed and we’ll never see anyone come back years later for revenge.
Unrelatedly, has anyone seen the twin towers lately? I visited NYC for the first time in 30 years and I couldn’t find them anywhere.
Indeed, and that was just a loosely knit organization of US haters that figured if they can't do anything in a direct confrontation maybe an indirect one would work.
One of these days someone is going to set off a nuke in a capital somewhere and we're all going to wonder where that came from...
Incidentally, I believe Bin Laden is in part responsible for Trump's election.
You may have not seen the update, but as per the king we will be running Venezuela.
This isn’t over and out adventures like this tend to create adversaries that bite us in the ass later, even when a competent admin is the one with their hands on the wheel
The US has sent nun rapers all across Latin America, puppet leaders, outright military takeovers, and everything in-between. The people we make enemies with haven't forgiven us for all those things, and I can't imagine there is much remaining unaccounted overlap between people that disagreed with all the other stuff, and those who were ok with the other stuff but not this.
This is one of those weird moments where I have a hard time wondering what new people we can even piss off that somehow weren't already against us from prior LA incursions.
Ordinary citizens were bombed in Caracas. There are videos of such bombings. Please do consider that the loss of the lives of ordinary people is a risk.
I am obviously speaking from the perspective of a superpower or a nation, not my own perspective. To a superpower, the lives of 40 people is indeed "virtually no cost" for the benefit of $17T worth of oil reserves and a favorable regime change.
> Expecting your country to go to war for your private interests is ridiculous.
At the risk of coming across as flippant: Why? I don’t think the math has worked out on most peer conflicts during the past hundred years. The cost of the operation has likely already exceeded the value of whatever infrastructure was left in Venezuela to be reclaimed. But why should we expect courts and bailiffs to enforce the law domestically and not expect soldiers to enforce it internationally?
The benefits definitely do not accrue to you, though. There is no direct or indirect benefit to you supporting the invasion of another country where you can now bomb locals with impunity.
What if military intervention was an explicit part of the investment agreement in the first place? I’m not saying it was, but would it affect your judgement?
Imagine you start a business in another country where the law says your business assets will be seized if you don't file tax form 123(a) before August. That is to say, non-filers don't have any business property rights. And you don't file the form.
Do you:
(Plan A) Realize you fucked up
Or
(Plan B) Send in the military to kidnap the president and take over the country, retroactively claim the law wasn't the law, undo its effects (but only for you) and then change the law so that property rights work exactly the same way they work in your country.
Now you see why people are saying plan B is bad, and would cause everyone to be at war all the time.
> If my property is nationalized in another country by force, I am fully in favor of my country swinging its dick around to get it back.
In this case your property is actually not your property though. Assuming property == oil, then it belongs in Venezuela - you seized control of it but it’s not really yours.
I'm sorry, I can't resist extending your metaphor:
The problem comes when "swinging your dick around" you accidentally get the other country pregnant. Then you have to co-parent the resulting child government, and they are always moody, rebellious, and ungrateful.
As soon as they're standing they run all over the house, painting the walls, breaking things, and costing you gobs of money. You can't ever go out, because the moment your attention wanders even a little they throw a party and invite their hooligan friends over; and wrapping up the party and throwing out their friends is another expensive debacle.
Not to mention the endless shady boyfriends/ girlfriends that parade through the place. They're "just experimenting" they claim: fascism, communism, and dictatorship are just phases they're going through as they explore who they really are.
Eventually they get resentful and want to live on their own. To accomplish this they kick you out of the house, and you end up leaving your car and many other possessions behind, and many times they trash the place as you leave.
If you're lucky, you both mature and you can develop an adult relationship in time. If you're not, they end up beating up their cousins and you have to break up the fights and pay for the broken furniture.
In short: don't swing your dick around, and if you must, be sure to use protection. I'm not sure what that equates to in this metaphor, but it's obvious the U.S. flunked sex-ed.
Of course it's taken into account. Feel like you didn't read what I wrote.
Question back to you: who decides when the government gets involved in getting your property back? You cool with it if they don't do anything to get your property back because of the size of your property; the cost to make it happen; you're not friends with the right person; etc.? Or better yet they don't get yours back but they get your competitor's/neighbor's back? Seems like the thing that happens in these situations is that someone maybe gets their property back and then the dick swings to piss on the people who didn't.
As far as I recall, in Guatemala, United Fruit had undervalued the worth of their land to reduce their taxes. So when they were compensated for the nationalization of their land based on their own valuation, they said that they were under compensated. United Fruit complains helped trigger the US intervention.
Not asking you to dox yourself, and I’m not questioning your take that renting is better than buying, but are you sure the data you pulled didn’t have a filter where you ended up with apples to oranges on the listing vs sale prices?
Just trying to find a hood in LA, at least the city itself, where there’s a $9M+ home for sale and where during the past 3 months the max sale price has been less than $2M. Unless the $9M place for sale is a total outlier.
Maybe it’s a small part of a single hood but I’m not sure you can conclude much about the broader city if that’s the case. Or maybe the asking prices didn’t have a bed/bath filter but the sale prices did?
I’d support a land value tax myself so don’t take this following comment as criticism, but you don’t even need a land value tax in the case of LA. You do need to repeal Prop 13 for investment properties. I wager most of those years-vacant properties have a generous Prop 13 assessment and so the owner can just sit on it because their carrying cost is closer to zero than what it would be in any other tax regime. Then all of us folks around them continue to make the adjacent area nicer and they just ride off into the sunset while the absurd delta between their taxable value and market value increases.
Prop 13 is like the anti land value tax. Makes places like Texas look downright progressive.
We were very close to repealing Prop 13 on commercial property a few years ago (via Prop 15).
One of the biggest objections to a straight repeal Prop 13 on commercial property is that most commercial leases are triple-net, meaning that the businesses directly pay the taxes. Which means that a bunch of small businesses that are just barely on the edge of profitability will shut down when they finally have to pay their fair share of property tax.
Agreed on the need to do it though (and also Texas typically has higher taxes for a normal person, with worse services than California). We might just want to pass a gradual phase in or a requirement that landowners pay it without increasing rent )and doing reach through to modify all those triple net leases... or something. Or we just let the businesses fail, but the public tends to not like lots of small businesses failing.
The inability to pay a high tax increase constantly comes up in discussions on Prop 13, and it seems like a willful failure to find a solution.
For personal property, raise the taxes, and give the home owner the option to defer the raise as a lien against the property, accruing fair interest. Nobody gets kicked out of their home, and the taxes get paid when the home is sold. If it is inherited, then the inheritors will have to increase their taxes paid at least so that the lien amount no longer increases relative to the home value.
For commercial property, cap the property tax paid by the lease-holder to the historic rate + a several percent growth to gradually meet the current tax bill. The rest of the tax becomes a lien on the property to be paid on sale, with forced payment increases if the lien to value ratio becomes too large. It would be up to the property owner whether they pay the additional tax or take it as a lien. Ultimately, commercial prop 13 was a mistake, and businesses that can't compete on a level playing field need to be gradually pressured to improve profitability or make the space available to someone that can.
Edit: one more thing that people seem to forget is that if we repeal Prop 13, we can reduce the property tax rate and keep the same tax income. So the unpayable increase is much more affordable than a naive analysis would suggest.
Yeah, I feel like the yimby's are going to take another run at repealing it for investment properties (5+ units of multifamily and all of commercially-zoned property) and it stands a much greater chance of passing the next time because of how close it was last time. The messaging will be much sharper.
Re your NNN comment, would you mind sharing a source for that? My gut says it's not accurate, but happy to be proven wrong. If you meant total square footage of leased space, that would make more sense, but having a hard time believing most leases are NNN (and since your point was about businesses going under what I think matters is the number of leases because (a bit over-simplified) 1 lease = 1 business regardless of the square footage leased by the business.
The ironic thing about this whole topic of businesses going under is that there's no rent control, for the most part, for businesses and yet Prop 13 acts as rent control (i.e., carried cost control) for landlords. If the landlords only charged the market rent that was achievable at the time they bought the property with a nominal capped annual increase that'd be pretty good for operating businesses, just not for the landlord's real estate business.
P.s. I personally benefit from Prop 13 and would be happy to have its market-distorting bullshit eliminated!
You could probably adjust the annual percentage increase and find a balance between pre-prop13 problems of rapidly increasing property tax and the post-prop13 problems of significant gap between capped assessment and actual value.
Probably also need to do something about transfers via holding companies as well, since there's a ton of commercial properties that have never had their assessment cap reset because of the way the beneficial holding rules apply to corporations. OTOH, if the capped assessment grows at something like 5% per year, maybe it can catch up soon enough anyway.
You note that a bunch of small business just won't be viable if you up the taxes, but you agree on the need to do it. So do you just keep upping the taxes until nothing is profitable except giant soulless corporations (who will then probably subvert the tax system anyway)?
Profitability doesn't only come from large corporations. And it's likely that many large corporations would shut down businesses too if it impacted them.
The limit is that if no other more profitable business exists, the landlord lowers rent until they get some one. But that's often a multi year discovery process. And it's very likely that person will be some other small business that wouldn't have had a chance if the same spot was occupied.
It's hard to overstate just how much the random subsidy is for Prop 13 taxes; there is literally a 20x difference purely based on when a property was purchased or a building was built. This leads to very poor and inefficient allocation of real estate to businesses.
We need to repeal Prop 13 completely. The fact that my neighbors pay 1/10th the property tax that I do, despite being younger and less at risk of being forced out of their home due to going fixed income or some financial crisis, is absurd.
Doing that would be good policy but bad politics. The people it would hurt the worst are the ones who vote most (older people) and the people most responsible for cities being the way they are (people who have lived in one spot a long time). So it's unlikely to directly happen, for that reason.
Piecemeal reform is much easier to swallow. Especially if you start with something like commercial properties, and especially since the increased income that results can be used to create tangible community improvements.
So even if your ultimate goal is full repeal, the correct strategy to make that come about is piecemeal reform, and pushing for a full repeal is counterproductive to that happening.
Prop 13 passed originally as a taxpayer revolt against uncontrolled spending increases by local governments. I agree that reform is needed but I'll only support changes if they maintain some sort of reasonable revenue limits on local governments. Otherwise the money will just be wasted giving fat raises to public employees.
I'm a former (i.e. not irrelevant to the question) Californian who also thinks Prop 13 should be repealed, and am probably supportive of LVT;
Can you walk through the scenario that younger neighbors pay a tech of the property tax you do? Are they legacies and benefiting from some sort of inherited trust or something?
Not OP, but it's probably about inheritance rules. If you inherit a property then you inherit its tax basis. In fact, if I remember correctly, you inherit the tax basis, but the capital gains basis resets. You effectively inherit a property that has a low property tax, but face zero capital gains if you turn around and sell it.
All of this is subject to limits and rules and stuff. I think prop 19 made it so that you have to use it for your primary residence for the first year. And I think there's a cap on the difference between property value and tax basis of ~$1m.
That's a soft cap, you get the full benefit if the value difference is up to $1m (in 2021, adjusted biennally for inflation since) or less, and if its greater you get the amount of value increase beyond the limit is added at full value (but the amount below the limit is still waived) in setting the tax basis value at transfer.
As the parallel comment said, this is probably inheritance, and the low tax basis can be passed to children and grandchildren.
This was recently modified, due to Prop 19, so that only the first million of property value can escape fair taxation. Since it was passed, there have been two attempts to bring back the landed gentry aspect of Prop 13, and there is a third attempt under way:
The example house used in the story was taxed at $1,300/year before inheritance, on a $2M home value. After inheritance, it's an annual $18,000 bill, discounted from something like $30k-$40k.
Had to read this a couple of times to try and figure out why, as of this moment, you’ve been downvoted because this seems like one of the more insightful comments on here. Maybe it’s too inside baseball about the post-deal opportunity? Anyway not supposed to talk about downvotes so…
You were there for a while. Was/is studio capacity still a constraint on production? You read so many stories about how LA studios are struggling to fill space because all of the productions have left town for tax credits elsewhere. Curious if you’re still plugged in enough and know that it’s still true about their studio space. I assumed their interest was strictly a content play and the extra studio space might actually be an anchor they were willing to drag along to get the content/IP.
Yeah, it's ok, can't win 'em all. Lots of negativity in this thread. Maybe people have a gut feeling that "Netflix buying WB" fits into the preexisting narrative about media consolidation, and they're reacting negatively to media consolidation being a problem. I think that's more of a problem in the news media than in entertainment media. In entertainment, the bigger story is the tech-centered transitions, esp. to internet distribution. I don't think the consolidation narrative is a perfect fit in this case; this is a pretty different type of consolidation than the others in recent memory.
I think this is about Netflix's model reflecting a fundamental technology shift; any company not participating fully in that shift will be operating less and less efficiently compared to those that are. Look at the inside history of HBO's attempts to build a streaming platform; in the early 2010s their leadership knew they probably should, but were their hearts in it? Did they have executives with competence in this area? No, they outsourced it and mismanaged it. Repeatedly. But like you said, my view includes being a former Netflix employee so maybe I'm biased.
I don't have current information on whether or to what degree studio production capacity is a constraint. Content spending was publicly projected to grow, so studio capacity had to grow, which is why Netflix decided to build giant new studio facilities in New Mexico and New Jersey. Those were referenced in the Q&A Netflix held Friday morning [1]. Wild guess: Netflix's own studios run at full capacity, which is why they're continuing to expand them. I'd love to know if WB studios run at capacity.
> I assumed their interest was strictly a content play and the extra studio space might actually be an anchor they were willing to drag along to get the content/IP.
Doubt it. Like I said, I'm not an insider on that question and I'm 6 years out of date. But if I had to guess, it would be that WB studio capacity will be a highly productive asset for Netflix -- most likely, it will be more valuable connected to Netflix's global distribution model that it was when operated under WB's model.
Couple of unrelated thoughts on this very long thread...
1. I'm sure multiple people have pointed it out, but for all the talk of a bubble, the AOL Time Warner merger was likely the biggest canary in the coal mine for what was to come. History repeats itself with literally the same brand and a lot of the same assets? Sort of depressing if the bubble does now burst because it's like we never learn our lesson
2. Trump wanted the Ellisons because they support him. There's almost no question in my mind the government will fight this. Will they win in court? Hard to say, but my quick thoughts:
If market cap was the basis for antitrust then the answer would be maybe, but that's not the basis for it. Is revenue the basis? No, but Disney generates more than Netflix, so does Comcast, so as a proxy for market share, which I think is somewhat the basis for antitrust (iamaal) it seems like there's no chance this creates some anticompetitive media juggernaut. But then the question is whether streaming is different than more general media. And if it is, how do you define the market when a company like Apple is involved in streaming but not fully a media company? Does that balance things out a bit? I don't think it does because I don't think anyone could claim that Apple counterbalances Netflix in streaming market share. If anything it would be a further argument against Netflix having Netflix and HBOMax.
Now having written all of that, I think the government would win because Paramount streaming with HBO would at least stand a chance in the streaming market against Netflix. And then also increase general media competition because you'd have Disney/ABC, Comcast/NBC, Paramount/CBS with the WBD addition improving Paramount's competitive position relative to the other two.
An aside on tariffs, it’s a tax (either literally depending on the upcoming SCOTUS ruling, or if not in name then in whatever language SCOTUS decides to call an additional fee consumers pay when buying goods. But a tax either way).
Relevant to the post, when supporters believe that “foreigners are swallowing 100% of the cost of the tariffs” they cheer them on. Those same supporters when they’re told the truth that consumers do end up with inflated prices because of them? Their support plummets.
I feel like that's how anyone feels about anything a politician says. They say great things (sometimes even lies) about whatever agenda they're pushing, like tariffs only affecting non US people, or deporting criminal illegals, and supporters buy it. But then when they find out they're paying the tariffs, or their innocent gardener is being deported, then suddenly they're like "wait I didn't vote for this" even though they literally did, just under a different frame.
These are people who vote according to their interests.
There are two economic systems in the US which are divided according to the parties, one is highly globalized and resides in the cities and includes most of the people here, and the other is local and is composed of older industries.
The local one was hit hard due to globalized policies and largely offshored, and these voters rightfully want to undo that, if that's possible is another case, but this is what Trump is doing.
Obviously this is against the interest and going to hurt anyone whose job is closer to Spotify, Stockholm than some Mining Town, Montana
Do you mind giving a bit more details in layman's terms about this assuming the $60k per subscriber isn't hyperbole? Is that the total cost of the latest training run amortized per existing subscriber plus the inference cost to serve that one subscriber?
If you tell me to click the link, I did, but backed out because I thought you'd actually be willing to break it down here instead. I could also ask Claude about it I guess.
It counted up the tokens that users on “unlimited” Max/Pro plans consumed through CC, and calculated what it would cost to buy that number of tokens through the API.
$60K in a month was unusual (and possibly exaggerated); amounts in the $Ks were not. For which people would pay $200 on their Max plan.
Since that bonanza period Anthropic seem to have reined things in, largely through (obnoxiously tight) weekly consumption limits for their subscription plans.
It’s a strange feeling to be talking about this as if it were ancient history, when it was only a few months ago… strange times.
So they're now putting in aggressive caps and the other two paths they have to address the gap is to drive the/their cost of those tokens way down and/or the user pays many multiples of their current subscription. That's not to say that's odd for any business to expect their costs to decrease substantially and their pricing power to increase, but even if the gap is "only" low thousands to $200 that's...significant. Thanks for the insight.
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