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Welcome back everyone. 
We have some breaking news. 

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Elon Musk is saying that he's 
going to be cutting 10% of the 

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Tesla Workforce, ten percent of 
the jobs. 

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They employ 100,000 people said 
that would be roughly 10,000 

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jobs. 
Now, the reason that he's saying

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that he's doing this is because 
of quote, a super bad feeling 

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about the economy and that they 
need to cut about 10% of jobs at

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the electric car maker. 
So this was news, it was leaked 

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by Reuters and Elon Musk saying 
that he has a bad feeling about 

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the economy that he's going to 
be. 

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Cutting 10% of the workforce. 
There's lots of opinions, 

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swirling about this. 
This news has caused Tesla stock

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to drop 9% today. 
So it's down way further than 

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the QQQ. 
And I think it's primarily 

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because of this announcement and
this news also comes 

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conveniently after an email, two
days after an email that Elon 

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sent out to the Tesla Workforce,
saying you have to come into 

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work for 40 hours a week. 
We're building the most 

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important stuff in the world and
we expect you to be in the 

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Right. 
He had this Stern stance on work

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from home. 
He clarified this email coming 

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out with a new one saying that 
every single worker needs to 

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come in the office 40 hours per 
week. 

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So there's now some people 
drawing some conclusions that 

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just maybe, just maybe his hard 
stance on work from home was an 

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effort to in fact, just get 
people to quit the job. 

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If people didn't want to come 
into the office, they could 

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quit, then you would need a fire
less people because he's already

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wanting to get rid of people. 
Now, I'm going to go through all

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of this with you. 
We'll talk about Tesla. 

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Ting jobs will talk about Elon 
having a super bad feeling about

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the economy and we'll talk about
working from home. 

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I worked as a developer for very
long time. 

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So I do have some opinions on 
work from home and I think that 

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Elon Musk has that subject 
wrong, but overall, I want to 

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discuss this news because I 
don't own any Tesla stock. 

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I don't have a stake in this 
company. 

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I have no dog in this fight so 
to speak. 

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And so I'll give you an unbiased
take because I think a lot of 

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Tesla Fanboys. 
So to speak will instantly just 

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try to spin this as good news. 
That Tesla's going to be more 

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Efficient and profitable and I 
don't plan on doing that. 

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I want to give you an unbiased 
take and tell you what I really 

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think from a third-party 
perspective. 

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So we're going to jump into all 
of that as well. 

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As. 
One other thing in this video. 

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I want to address a common 
question and and comment left on

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my previous video. 
I did a video on Salesforce. 

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I reacted to their earnings 
report, their future outlook, 

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and I did fundamental analysis 
on the company and one part of 

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my analysis. 
I showed was that Salesforce 

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issues shares right now, they 
are dilute of Me, and you can 

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see the shares outstanding over 
time. 

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Now, I received the most 
comments about this part of 

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their fundamentals, that they 
are deluded of company, and many

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people have the conclusion in 
their head. 

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They think, if a company has any
dilution like this, it's just a 

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bad company. 
You don't want to buy, you don't

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want to own it. 
It's bad for the shareholder. 

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The rest of the fundamentals, 
don't really matter. 

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This is a complete Nono, and I 
want to address this because 

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dilution has been a very popular
subject. 

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Everyone has an opinion on 
dilution. 

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And I want to answer the 
question is dilution good or 

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bad. 
I'll be answering that once and 

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for all. 
So we have a lot to get to. 

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Let's go ahead and Jump Right 
In. 

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We'll start off with the Elon 
Musk and Tesla news. 

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This is what we know so far. 
So, let me just lay out the 

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facts here, this morning, an 
exclusive from Reuters said that

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Elon Musk wants to cut 10% of 
Tesla jobs. 

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Now, Tesla hires or they employ 
100,000 people. 

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So that's roughly 10,000 people.
He said in the memo that quote, 

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he has a super bad feeling about
the economy and needs to cut. 

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At 10% and the title of it was 
pause. 

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All hiring worldwide. 
So Tesla has already paused all 

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hiring but now they're actually 
going to be cutting back on 

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their Workforce in this is 
really all we know. 

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He has a super bad feeling about
the economy. 

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He's paused all hiring and they 
want to cut the workforce. 

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Now this going to be a lot of 
Tesla Fanboys, a lot of Tesla 

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investors that try to spin this 
as positive news as possible. 

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One thing that you should ask 
yourself when you look at other 

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YouTubers and other you know, 
Financial content creators. 

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Ask yourself. 
What was their opinion? 

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One Netflix had slowing growth 
and had to cut back on their 

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Workforce. 
Did they have a positive opinion

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on that? 
They think that that was such a 

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great thing for Netflix. 
What about Amazon Amazon 

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recently over hired had a very 
slow growth quarter and now 

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they're trying to trim down on 
their Workforce. 

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They're not hiring any more did 
those? 

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Same people that think that this
is good news for Tesla, think 

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that, that was good news for 
Amazon, right? 

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Is it good news in general, when
a Growing company that still in 

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the growth praise right? 
Tesla is a fast growing rapidly 

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growing company with a very 
high, P/E ratio, very high 

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expectations. 
And now they're trimming ten 

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percent of their Workforce. 
Now, I do think that companies 

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should have a level of 
discipline. 

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They should try to gauge their 
hiring based off of their 

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budget, their revenue, their 
profitability, and their future 

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demand. 
I do not think companies should 

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gauge their hiring off of having
super bad feelings about the 

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economy. 
That to me seems like a very odd

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way to put this. 
We're going to Eventually fire 

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10,000 people because you woke 
up and had a bad feeling bad, 

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feeling about the economy, a gut
feeling. 

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That's how you're going to run 
the business. 

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There's got to be a better 
reason than that. 

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And generally speaking calling 
it like it should be called. 

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A growing company should be 
hiring employees. 

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If a company is growing rapidly 
and has excess demand, that is 

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trying to keep up with it, 
should be expanding crowdstrike 

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is hiring many employees. 
That's because it's a growing 

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company. 
Atlassian, tiring, many 

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employees. 
That's because it's a growing 

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company. 
Any growing Company in today's 

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market is desperate for 
employees. 

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So having Tesla now say that 
they're cutting back. 

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I don't see how this with. 
Any honesty can be viewed as a 

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huge positive and I think the 
market is right, to be skeptical

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about it to say that this is not
really a great thing. 

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Now, on this subject. 
Let me address one other thing, 

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just a couple days ago. 
Elon Musk sent out. 

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This leaked email, we have right
now. 

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This is spread all over Twitter,
and it says that anyone who 

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wishes to do remote work, must 
be in the office for a minimum. 

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And I mean, I'm minimum. 
In Asterix there for 40 hours 

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per week or depart Tesla. 
This is less than we asked 

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Factory workers. 
If there are particularly 

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exceptional contributors for 
whom this is impossible. 

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I will review and approve those 
exceptions directly. 

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Now, this email renewed the 
debate of work from home whether

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or not, it's good or bad, 
whether or not Elon Musk should 

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require employees to come in, 
you know, are other companies 

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going to do that. 
Other executives are trying to 

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figure out the right balance. 
Some of them like they're in. 

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Ploys to be in the office all 
the time. 

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They think it's better for 
various reasons. 

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Some of them. 
Allow them to work at home 

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either. 
Full time or partially. 

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Now I have some thoughts on this
as well. 

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I worked as a senior level full 
stack web developer for about 

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eight years and work from home 
was something that I did before 

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and I've also worked in an 
office for 40 hours a week and 

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my thoughts on. 
It are the I think there are 

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many cases many employees that 
do not need to come in the 

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office for 40 hours a week. 
And I disagree entirely with 

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Elon. 
On the subject, requiring 

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everyone to come into an office 
40 hours per week. 

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Because Factory workers do 
doesn't make sense. 

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And even after Elon Musk has had
all the flaws in this argument 

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pointed out. 
He's continued to defend this 

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position, repeatedly on Twitter.
The CEO of atlassian says that 

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the news from Elon Musk and 
Tesla today feels like something

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out of the 1950s. 
I agree. 

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He says everyone at Tesla is 
required to spend a minimum of 

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40 hours a week in the office, 
very different approach to what 

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we are taking at. 
Atlassian. 

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And here's why he explains how 
he wants the best talent in the 

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world working for their software
company. 

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So he hires people across the 
world that aren't even close to 

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an office there like two or 
three hours away from the 

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closest office. 
And as long as they're 

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contributing and helping, they 
are an asset to atlassian. 

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Now, Elon Musk. 
He responded to this. 

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He said everyone eats the same 
food uses the same rest rooms 

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Etc. 
No, executive chef or others in 

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an ivory Tower stuff. 
There shouldn't be this workers 

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versus Judgment to class system.
Everyone is a worker. 

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There's so many flaws with this 
logic, just for one, not 

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everyone's paid the same. 
So if everyone's just the same 

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and should be treated the same, 
why do senior Executives make 

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far more money than the factory 
workers? 

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Right? 
There's multiple flaws with 

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this. 
One of these jobs requires you 

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requires you to be in person. 
The other one does not. 

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That's the simple facts and Elon
Musk doesn't seem to be taking 

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this into account at all. 
And if you're developing 

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throughout the day, There's 
other ways to even hold you 

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accountable. 
So the people saying that Elon 

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Musk is correct, because if 
you're working from home, you 

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could be slacking. 
Who knows what you could be 

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doing. 
You should judge an employee by 

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their output, what they're able 
to accomplish, and there's ways 

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to do that with development. 
There's coding reviews. 

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You can look at what they're 
submitting to GitHub to the 

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repositories. 
So this this idea that everyone 

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should work in an office because
Factory workers have to because 

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of their job is just silly 
door-to-door. 

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Salesmen have to work outside. 
Does that mean everyone should 

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be equal and work outside 
walking around the streets 

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knocking on doors? 
No different jobs, necessitate 

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different needs and for some 
jobs. 

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It's fine to work from home. 
So I don't agree with Elon Musk 

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at all on the subject. 
I think he's incorrect and 

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there's a couple reasons why I 
think he would be doing this. 

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One of them is I think there is 
maybe room for exception for a 

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carmaker. 
Tesla is an automaker. 

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So encouraging the work from 
home environment with an 

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automaker, may not be the best. 
Best idea. 

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So maybe that's part of his 
thinking here is we can't have a

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culture of work from home, 
right, ditching Transportation. 

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When we're Tesla. 
We're in auto maker. 

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And I think that that would be a
defendable stance. 

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So maybe in this unique stance, 
Elon Musk can defend it that 

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way, but I also think the other 
reason why that he has this very

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aggressive hard. 
No, Stan some work from home is 

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because he wants to get rid of 
employees. 

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Now, we know he wants to fire 
10% of Tesla Workforce. 

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So if you quit because you're 
frustrated with their From home 

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policy. 
So be it, who cares? 

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He wants to get rid of you 
anyway, and that way, he doesn't

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have to pay Severance, and it 
doesn't look like Tesla's 

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00:10:06,800 --> 00:10:09,300
cutting back but now. 
Well, now the cats out of the 

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bag, now, moving on, it's time 
to address one subject from the 

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previous episode. 
Is dilution good or bad. 

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I did a video on Salesforce. 
And this was one where I went 

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over their earnings report, 
their valuation. 

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00:10:21,500 --> 00:10:23,500
And one of the metrics that I 
brought up one of the 

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fundamentals was, the dilution 
chart. 

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It shows that the shares 
outstanding overtime continue to

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grow as say, Salesforce 
partially funds their business 

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and their stock based 
compensation through dilution. 

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Now, this received a lot of 
comments and I mean, a lot, we 

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had people commenting on 
dilution and dilution and 

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dilution dilution dilution 
dilution over and over again, 

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all throughout the comment 
section, and many people have 

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the attitude that if there's any
dilution with the company at 

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all, I'm not even going to look 
at it. 

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I won't even look at the other 
fundamentals. 

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I will never buy a company at 
all. 

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That does any dilution 
whatsoever. 

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So, let's go ahead and Take a 
look at this and address the 

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subject of dilution together. 
We have sales force here, which 

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it's very clear that this 
company is diluting. 

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The shareholder dilution means 
that they're issuing more shares

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which makes your Equity 
ownership in the company go down

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over time because you buy one 
chair and if the company issues 

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more shares you own a smaller 
percentage of the company. 

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So this is just on a on a plane 
basis. 

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It's a - because you have less 
ownership of the company and 

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Salesforce has been doing this 
since the very beginning. 

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It's a growth company is 
diluting the shareholder. 

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But this should be looked at 
through the context of the 

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overall fundamentals of the 
company. 

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This shouldn't be looked at in 
isolation, one, important thing 

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to keep in mind. 
Is that even though Salesforce 

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has roughly doubled their shares
outstanding over the past 10 

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years, there amount of free cash
flow. 

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They've generated over the past 
10 years, has gone up roughly 10

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times. 
So they've doubled the share 

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count and then 10x the amount of
free cash flow on a free cash 

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flow, dilution adjusted basis. 
They're growing their free cash 

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flow at an Pull rate. 
So the equity owner hair owns a 

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greater and greater amount of 
cash flow per share per year, 

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and I'm actually going to 
include a graph in qual, Trim in

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this new update that will have 
free cash flow per dilution 

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adjusted share. 
Meaning that you're seeing, even

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with dilution factor it in the 
amount of free cash flow of the 

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company is growing. 
So that'll make this more clear.

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But again, that's something that
you have to factor in every 

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company can dilute or they can 
do share BuyBacks. 

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What's really important is the 
amount of free cash flow of the 

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company is generating. 
On a per share basis. 

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And we can look at other 
examples of this apple a 

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company. 
Everyone loves, this is a great 

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company and its a company doing.
Share BuyBacks. 

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Right? 
Well, it's a company that now 

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does share BuyBacks, but up 
until 2012. 

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This company wasn't doing share 
BuyBacks. 

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You can clearly see that for the
majority of apples life, for 

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over half the company, they were
diluting. 

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The shareholder was Apple, a 
poor investment in 2010 because 

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it was diluting, the 
shareholder. 

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Should you warn people from 
investing in apple back in 2005,

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or Early 2000s because it was 
deluding, did it suddenly become

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a great investment in 2013, when
it stopped dilution. 

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No, this was just the Arc of the
growth of the company company 

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start off diluting, and then, 
they start to do share BuyBacks.

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Once they get to massive scale. 
This is exactly what this chart 

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shows with apple. 
We can look at Google as an 

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example, another company that 
many people right now, Phil is 

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undervalued. 
Well, if we look at Google's 

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shares outstanding, over time, 
from 2003, at the start of the 

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company, all the way to 2017 
into 1018 this company was 

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deluding the shareholder. 
So everyone that thinks that 

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dilution is just an instant 
write-off for the company. 

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Take a look at these charts, 
every great company. 

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In today's market did dilution 
for the majority of their 

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lifetime. 
Only recently, in 2019. 

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Did Google start to do, share 
BuyBacks. 

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That is a recent occurrence. 
We can take a look at Facebook. 

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Another company that many people
feel is undervalued right now. 

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Facebook did dilution up until 
2017. 

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Another company that Throughout 
the first half of the lifetime, 

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deluded, the shareholder. 
And again, recently started 

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00:14:04,700 --> 00:14:07,600
doing share, BuyBacks. 
Microsoft is no exception either

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00:14:07,800 --> 00:14:11,100
this company shares outstanding 
show that up until 2005. 

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This company was deluding the 
shareholder. 

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00:14:12,900 --> 00:14:14,900
Then in 2005. 
They started to do a lot of 

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share BuyBacks. 
So all I want to point out here 

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00:14:17,000 --> 00:14:20,100
is that dilution is just a tool.
It's inherently neither, good 

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00:14:20,100 --> 00:14:22,600
nor bad. 
It's the way that the company is

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00:14:22,600 --> 00:14:25,100
using it. 
If the company is taking money 

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00:14:25,100 --> 00:14:29,100
by doing dilution and creating 
more value on a per share basis.

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00:14:29,700 --> 00:14:32,300
In the free cash flow per share,
then that is an accretive 

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00:14:32,300 --> 00:14:34,200
attractive transaction for the 
investor. 

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00:14:34,200 --> 00:14:35,700
And on a side note. 
This is virtually. 

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What all REITs do? 
Every single reap dilutes realty

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00:14:38,900 --> 00:14:41,000
income Corp, the monthly paying 
dividend company. 

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00:14:41,200 --> 00:14:43,100
It's diluted its entire 
lifetime. 

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00:14:43,200 --> 00:14:46,300
It's issued more and more shares
because they can't retain any 

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00:14:46,300 --> 00:14:47,600
earnings. 
They have to distribute all of 

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00:14:47,600 --> 00:14:50,000
them. 
But on a per share basis, they 

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00:14:50,000 --> 00:14:52,700
create greater and greater a FF 
0 which is the amount of free 

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00:14:52,700 --> 00:14:54,600
cash flow. 
They have the same thing with 

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00:14:54,600 --> 00:14:56,700
Vici. 
The same thing with any Real 

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00:14:56,700 --> 00:15:00,300
Estate Investment Trust, so they
use dilution in a Very good way,

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00:15:00,300 --> 00:15:02,000
they create more value for the 
shareholders. 

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00:15:02,000 --> 00:15:04,300
So I'm not trying to say that 
dilution is fine and you should 

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00:15:04,300 --> 00:15:06,900
just ignore it, always take it 
into account because some 

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00:15:06,900 --> 00:15:10,000
companies do you use it in a way
that's dis advantageous for the 

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00:15:10,000 --> 00:15:13,800
investor, but put it in context.
See if the company is growing 

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00:15:13,800 --> 00:15:17,100
their free cash flow per share, 
that factors in dilution. 

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00:15:17,100 --> 00:15:19,800
So that's my thoughts on that. 
I hope you enjoyed this episode 

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and I'll see you in the next 
one.