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Welcome to the Joseph Carlson 
show on today's episode, Elon 

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Musk bought, a nine percent 
stake and Twitter. 

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Now, this is actually old news. 
He bought this steak yesterday. 

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The news, the breaking news is 
that he's now on Twitter's 

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board. 
So he was immediately put on 

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Twitter's board after buying the
large stake. 

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And this brings into question, 
what is elon's master plan hair?

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What is he trying to accomplish?
This is one of the most powerful

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individuals in the world. 
Maybe the most powerful by some 

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quantifiable measures and now 
he's on the board of directors 

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of one of the most influential 
companies in the world. 

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So we're going to talk about 
what Elon musk's, real plan here

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is what he's really hoping to 
accomplish. 

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We also have some big news 
regarding Starbucks. 

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Howard Schultz is back as the 
interim CEO, and the first thing

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he did was scrapped the buyback 
plan. 

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That's right. 
Remember six weeks ago, how 

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Starbucks pledged 20 billion and
BuyBacks and dividends that was 

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a major part of my investment 
thesis in this company. 

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Well, now the new CEO is saying 
you know what, we're not doing 

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BuyBacks anymore. 
In fact, we're going to 

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prioritize Baristas over the 
stock price. 

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So obviously, I have a lot of 
thoughts about this news. 

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As someone who has a sizable 
holding in Starbucks and I'll be

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sharing my thoughts in this 
episode. 

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And then of course, I'll be 
showing you how my portfolio is 

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doing the passive income 
account, which is my real money 

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invested in a dividend growth 
portfolio. 

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So we have a lot to jump into in
today's episode. 

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Now let's go ahead and jump 
right in Elon Musk purchase 9% 

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of Twitter and he can do that 
because he has a lot of money. 

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In fact, he could buy a lot 
more. 

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Twitter if rules and regulations
didn't prevent him from it but 

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now he owns nine percent of the 
company and this was breaking 

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news. 
As of yesterday, just that news 

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alone launch Twitter shares up 
around 25% in one day. 

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So the company gain more in a 
single day than it ever has 

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senses IPO and in that single 
day of the 25% increase Elon 

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Musk made it over 500 million 
dollars on his investment to put

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that in perspective. 
That is more than Twitter's 

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entire net income for the past 
three years. 

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Musk made more money in one day 
off of Twitter stock than the 

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company's made in the past three
years. 

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Well, this is big news in and of
itself but then there's 

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discussion on well, what does he
intend on doing right? 

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Is he going to have a passive 
stake where you kind of just 

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owns the company and has it as 
an investment? 

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Or is he going to take a more 
active role and many people 

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actually assumed that he would 
take a passive stake? 

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That is an assumption I think is
ridiculous. 

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When you look at someone like 
Elon Musk, is he really that 

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passive in anything? 
And this man has the most active

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on the Forefront, CEO of almost 
any company, and I didn't think 

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he was going to buy Twitter to 
take a backseat in the company 

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will, of course, the very next 
day which is today, Elon Musk is

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now joining Twitter's board of 
directors and he's teasing 

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significant improvements. 
So he's making it very clear 

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that this is not a passive 
stake, he's on the board of 

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directors. 
He's now in part, helping run 

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the company and Elon Musk plays 
a unique role in this. 

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Because typically, when you have
someone joined the A directors, 

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they don't have the same type of
voice that someone like Elon 

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Musk does. 
So now the situation that we're 

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in is Elon Musk, owns nine 
percent of the company, the 

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company stock prices up 33 
percent in the past two days, 

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and he's joined Twitter's board 
of directors. 

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So, this leaves the question, 
what does he plan on doing now 

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in? 
This is where I think we're 

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getting some good takes on a lot
of bad takes here's where I 

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think we get a bad take of why 
Elon Musk bot Twitter. 

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This is from Rich Green Field. 
He goes on to explain how 

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investors are overlooking the 
user growth of Twitter more than

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anything. 
It certainly highlighting 

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Twitter's had a lot of progress 
momentum on the user growth side

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that investors simply ignored 
after the last quarter, because 

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of the cost side of the 
equation. 

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So, Elon Musk bought Twitter, 
because investors are ignoring 

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Twitter's user growth, this is 
not about profits and losses and

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user engagement and it you see 
what it's about. 

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Actually I disagree I think it 
is about user then why isn't the

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broken you know, all the fallen 
angels and Tech and taking 

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steaks and all of this, this one
is wearing our, you're missing 

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the point, you're missing the 
point, the reason he's making 

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these comments about open 
sourcing and that, you know, 

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kind of at the Town Hall like 
this whole way he's thinking 

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about it is because Twitter has 
gotten so big and so important 

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that he believes that there 
should be different, algorithms 

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are different ways of 
information ferreting up to the 

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top. 
He wouldn't care if Twitter was 

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irrelevant and Tiny and not 
growing as rapidly as it is. 

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He wouldn't care. 
So, I think the point is, he 

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does care because Twitter is 
Relevant Twitter is a, 

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relatively is the most 
important. 

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He's not doing this to try to 
juice the stock and make some 

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money, like an activist investor
to try to open up shareholder 

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value. 
So, we can make someone, he's 

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doing it because he wants to 
change the way that the 

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Twitter's being run right now, 
in terms of censorship and and 

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everything, you don't think that
that's what he's doing here. 

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You think, is purely an economic
play that he's making, why 

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didn't he buy? 
But there's a lot of cheap 

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companies out there that he's 
not interested in. 

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I think this breaks down in 
large part the Give it happening

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over Twitter. 
A lot of Twitter shareholders, 

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might think that Elon Musk is 
buying Twitter for economic 

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reasons, he's buying it because 
the company's undervalued and 

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Elon Musk sees value there. 
And then, there's the Joe 

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current inside of it, where he's
saying that the economics have 

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no part in this, the valuation 
of Twitter has no part in it. 

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Elon Musk is buying Twitter for 
entirely different reasons. 

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And I have to say this is one of
the cases where I strongly 

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agree, with Joe, Kernan. 
Now Rich goes on to make another

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assumption that I think is 
clearly false. 

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I don't think it's true at all. 
Here's what he says regarding 

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elon's ability to make change at
Twitter. 

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I mean nine percent steaks, not 
going to give him the ability to

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change. 
Yeah, that's what this company 

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not. 
So, we'll see. 

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He's got to own a lot more than 
9% to have an impact on how this

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company runs. 
Well, you gotta start with 9%, 

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you can't, you know, you can't 
start with 60%. 

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He says that 9% isn't enough to 
make change at the company. 

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It's not enough to impact the 
company at all. 

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And just a day later after this 
interview, Elon Musk is on the 

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board of directors and saying, 
Working closely with them and 

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advocating for great changes to 
the company. 

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If we're going to look at, why 
Elon Musk is buying Twitter. 

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I think its first important to 
understand incentive here, Elon 

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Musk has literally no incentive 
to make more money. 

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He has all the money. 
He could possibly spend in a 

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hundred lifetimes. 
He's worth currently 267 billion

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dollars that is over a quarter 
trillion dollars. 

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Most of us look through things 
through the lens of economic 

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value. 
We want to create more wealth. 

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We want to get more wealthy. 
Because right now we don't have 

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enough money to fully retire or 
we don't have enough money to 

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get all the things that we want.
Elon Musk has solved this 

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problem long ago and money 
hasn't been his primary 

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motivator. 
I think for a very long time, I 

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think that his aspirations are 
far beyond that and we can get 

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an idea of what you'll on 
mosques aspirations are by 

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previous things that he said on 
Twitter. 

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He was quickly, welcome to the 
board of Twitter, quote, through

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conversations with Ilan and 
recent weeks, it became clear to

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us, that he would bring Great 
Value to our board. 

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The CEO Prague said, Quote, he's
both passionate and a believer 

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in intense critic of the 
service, which is exactly what 

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we need on Twitter and in the 
boardroom to make us stronger in

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the long term. 
So the CEO of Twitter is very 

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welcoming to Elon Musk and I 
think he should be Elon Musk 

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creates a lot of value with most
things that he's involved in, 

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even the former CEO, Jack 
Dorsey, also praised the move 

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saying that must cares deeply 
about our world and Twitter's 

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role in it must reply to this 
saying that he's looking forward

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to working with Twitter and 
making significant improvements.

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Movements to Twitter in the 
coming months, so that is the 

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basis of what we know so far is 
Elon Musk wants to improve the 

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platform. 
He's also hinted at this many 

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times in the past, for instance,
he did a poll yesterday, saying,

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do you want an edit button and 
he misspelled? 

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Yes. 
In the poll, he also did a poll 

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on March 25th, saying free 
speech is essential to a 

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functioning democracy. 
Do you believe that Twitter 

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rigorously adheres to these 
principles? 

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Yes or no? 
And he said, the consequences of

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this poll will be important. 
Please vote carefully. 

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And this poll hair is. 
A lot of the discussion is 

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generated from. 
It's clear that Elon musk's he's

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issues with Twitter's Free 
Speech policy. 

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The way that they have content, 
moderation either thinks that 

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it's unfair or it's not free 
enough or it. 

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Should at the very least, be 
changed and altered and improved

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and a lot of people are having 
adamant discussions and 

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arguments over this point. 
I actually think that Elon 

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musk's plans are much broader 
than Twitter and even content. 

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Moderation, alone, he looks at 
Twitter is a social Town Hall. 

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A place where ideas and thoughts
can be expressed openly Lee and 

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I think he is going to try to 
improve the content moderation 

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and make it more of a free 
speech platform. 

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But content, moderation is very 
difficult. 

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Those type of changes would take
a lot of time to execute 

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correctly and even if he does 
accomplish that, I don't think 

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he's going to stop there. 
There's one tweet by the 

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conservative commentator, Denise
to sausa, that I really think 

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gives some insight into what 
Ilan must be thinking about. 

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He says tweets are fine, Elon 
Musk but you can dramatically 

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change the political and 
cultural landscape in this way. 

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One by and Go over a major 
social media platform to acquire

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and create a TV network, like, 
ABC, NBC or CBS and three, 

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create a world class online 
university, and offer degrees 

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for free. 
Now, there's lots of ideas that 

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are thrown at Elon Musk from 
time to time, but this is one 

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that you like musk actually 
responded to on January 28th. 

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You replied saying, quote, 
interesting ideas, and then a 

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month later, he's already done 
step one, by n, takeover and 

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major social media platform. 
He bought Twitter and he's On 

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the board of directors, and I 
think that begs a question, is 

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he going to be doing step two 
and three, creating a TD like 

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Network, like, ABC, NBC or CBS, 
and then also, creating an 

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online university that offers 
degrees for free. 

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So maybe he will do these 
things, who knows? 

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I could see, Elon Musk starting 
a news company. 

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A news company with the focus of
just having facts and not being 

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biased. 
I could also see him starting 

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the online university, where he 
gives away to Greece for free. 

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That'd be something that would 
be a huge net benefit for the 

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world. 
So who knows what he'll do next?

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All we know for Now is that 
you'll I must clearly isn't 

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satisfied. 
Just running Tesla or the boring

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company or SpaceX. 
He's already changed the world 

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in a number of different ways 
and I think he wants to change 

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the world in a few more. 
Now, moving on, we gotta talk 

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about this Starbucks news 
Starbucks, just threw a 

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curveball to investors. 
This was somewhat of surprising 

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news, Howard Schultz. 
The interim CEO came back to 

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Starbucks. 
And on the first day, he said 

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that he's prioritizing Baristas 
over the stock price, and the 

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first action that he Did was 
announcing that they're 

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suspending billions of dollars. 
In share repurchases and said 

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his immediate Focus would be on 
cafes customers and employees 

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rather than the stock market. 
Now after announcing that he 

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scrapping the buyback program, 
he goes on to explain how every 

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decision that they're making is 
for the employees. 

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It's not for the shareholders 
quote. 

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I'm not in the business as a 
shareholder of Starbucks to make

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every single decision based on 
the stock price for the quarter.

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Those days, ladies and 
gentlemen, are over. 

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So the days of making Decisions 
for the stock price. 

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Each quarter for the 
shareholders are over Wall 

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Street, of course, responded to 
this by sending the shares down 

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3.7% to $88. 
In fact, since he announced the 

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suspension of his buyback 
program, the shares are 

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currently down 7%. 
So there's a couple different 

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ways to look at this news, but I
see this as an overall negative 

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for the company. 
And for shareholders, first of 

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all, I realized the game that 
Schultz is playing, he's wanting

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to play the political game. 
He knows that there's a 

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unionization. 
Effort that's going on right now

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with Starbucks. 
He's trying to slow down the 

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union effort. 
He's trying to stop the union 

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effort and he knows it. 
Share BuyBacks politically are 

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unpalatable, there's something 
that politics looks at very 

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negative. 
So the first thing that he does 

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coming back as CEO is announces,
that he's going to stop those 

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dirty BuyBacks and instead put 
that money into the company and 

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into the employees like a very 
good company. 

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Would that is the political 
phrasing of this news in 

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reality. 
The BuyBacks are not a problem. 

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Starbucks has been growing 
extremely rapid. 

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They have been reinvesting into 
their stores, they have been 

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increasing pay. 
All while returning cash to 

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shareholders in the form of 
BuyBacks and dividends and they 

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have the balance sheet and the 
fundamentals to continue 

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supporting that size. 
See the only reason for them to 

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really scrap BuyBacks is largely
a political move to improve the 

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Optics of the company and I 
think such an aggressive 

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response to the union effort 
shows that Starbucks is 

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vulnerable. 
It shows that they're actually 

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concerned about this effort. 
It's having a material Real 

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effect and they're actually 
willing to change their 

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long-standing Capital allocation
policy in a response to this 

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movement. 
And I think that's very telling 

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from the company, a lot of 
investors in Starbucks, I don't 

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think realize the extent of how 
important share BuyBacks are to 

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their overall returns. 
Take a look at this chart. 

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I'll throw it on the screen 
here. 

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This is the amount of dividends 
that Starbucks pays to 

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investors, compared to the 
amount of BuyBacks. 

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Look at them year-over-year and 
see which way, Starbucks returns

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more money to its shareholders. 
You have the dividends and gray 

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and the Buybacks in blue in 
2022. 

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The dividends make up a sliver 
that is so far in 2022 in 2021. 

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It was a unique year where they 
did no BuyBacks, right. 

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That was all dividends. 
But then look at the prior years

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in 2020. 
It was split almost 50/50 and 

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2019 Starbucks did over ten 
billion dollars in stock 

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BuyBacks. 
They bought back nearly 10% of 

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the entire market cap of the 
company. 

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This improve the earnings per 
share of the company. 

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00:13:29,200 --> 00:13:32,400
This drove of the stock price 
higher the shareholders at that 

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time benefited dramatically from
it and the same thing in 2018, 

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and 2017 Starbucks has rewarded 
shareholders dramatically 

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through share BuyBacks. 
Here's another chart. 

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We can look at to illustrate 
this further. 

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Look at the overall yield of the
company in the way that they 

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00:13:47,900 --> 00:13:49,700
return Capital to the 
shareholder. 

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00:13:49,900 --> 00:13:53,700
Over the past five years. 
Starbucks has returned five 

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00:13:53,700 --> 00:13:57,800
point three, nine percent of its
yield through BuyBacks and only 

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00:13:57,800 --> 00:14:00,500
one point eight three percent 
through diplomatic It's BuyBacks

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00:14:00,500 --> 00:14:04,100
are the huge majority of way 
that Starbucks rewards its 

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shareholders. 
And essentially what they're 

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saying right now is, they're 
removing that option. 

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They're removing 80% of the way 
that they've historically, 

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rewarded shareholders. 
I know that Schultz is looked at

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as a legendary CEO. 
He founded Starbucks but I do 

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question, a lot of the moves. 
He's making now to come in and 

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00:14:20,200 --> 00:14:22,500
say, hey, we're no longer 
rewarding shareholders. 

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00:14:22,500 --> 00:14:25,700
We're going to scrap the 
BuyBacks and were almost doing 

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00:14:25,700 --> 00:14:28,300
anything to say that will help 
out the employees. 

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00:14:28,600 --> 00:14:29,600
I think it changes the 
environment. 

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00:14:29,700 --> 00:14:32,400
Investment thesis, listen to 
some of the wording that he's 

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00:14:32,400 --> 00:14:35,500
saying here in one of the 
meetings, he promised employees 

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00:14:35,500 --> 00:14:38,700
at the form that the company's 
best days were ahead of them. 

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00:14:39,000 --> 00:14:41,600
That's great. 
But then he goes on to say we 

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00:14:41,600 --> 00:14:45,700
have to reimagine the role and 
responsibilities of a public 

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00:14:45,700 --> 00:14:49,000
company in America. 
Today we have to reimagine the 

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00:14:49,000 --> 00:14:51,900
role and responsibilities of a 
public company. 

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What does that mean? 
Does that mean we no longer 

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00:14:54,600 --> 00:14:56,600
reward shareholders? 
We give everything to the 

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00:14:56,600 --> 00:14:59,600
employees of the company because
if that's the case, that's not 

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Only a company. 
I want to be a shareholder of 

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00:15:01,700 --> 00:15:03,300
there. 
Should be rewards for taking 

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00:15:03,300 --> 00:15:05,500
risk. 
He also goes on to apologize, to

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00:15:05,500 --> 00:15:07,600
the employees. 
Saying quote, we haven't done 

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00:15:07,600 --> 00:15:11,700
enough, I promise to do better. 
What exactly is he apologizing 

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00:15:11,700 --> 00:15:14,700
for Starbucks? 
Has better pay better benefits 

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00:15:14,700 --> 00:15:17,700
and better working conditions 
than almost every single 

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00:15:17,700 --> 00:15:19,800
comparable store in its 
industry. 

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00:15:19,900 --> 00:15:22,800
So I fail to see what Starbucks 
is so emphatically apologetic 

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00:15:22,800 --> 00:15:25,600
about to add even more confusion
to this Howard Schultz recently.

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00:15:25,600 --> 00:15:29,100
Did this open Forum to their 
Partners where he goes on 

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00:15:29,100 --> 00:15:32,200
explaining And some new business
ventures that Starbucks will be 

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00:15:32,200 --> 00:15:34,900
going into you. 
Look at the companies to Brands 

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00:15:34,900 --> 00:15:39,100
and celebrities the influences 
that are trying to create a 

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00:15:39,100 --> 00:15:42,500
digital nft platform and 
business. 

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00:15:43,200 --> 00:15:48,900
I can't find one of them that 
has the Treasure Trove of assets

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00:15:49,200 --> 00:15:52,900
that Starbucks has from 
Collectibles to the entire 

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00:15:52,900 --> 00:16:00,400
Heritage of the company. 
So here's the see sometime 

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00:16:00,600 --> 00:16:04,900
before the end of this calendar 
year, we are going to be in the 

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00:16:04,900 --> 00:16:08,700
nft business, so we're going 
into the nft business. 

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00:16:08,700 --> 00:16:11,200
Now that is apparently a 
priority for Starbucks. 

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00:16:11,500 --> 00:16:13,900
So with all this recent news and
events of Howard Schultz 

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00:16:13,900 --> 00:16:16,900
returning back to Starbucks, the
stock price has dropped seven 

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00:16:16,900 --> 00:16:19,800
percent in just a couple of days
and I'm currently down three 

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00:16:19,800 --> 00:16:23,100
thousand dollars on the holding.
Now, I've thought about this for

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00:16:23,100 --> 00:16:25,600
a bit, I've considered all the 
Possibilities. 

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00:16:25,900 --> 00:16:29,400
And I'm still holding on to this
stock, I view this as a material

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00:16:29,400 --> 00:16:32,700
- I think that it means that the
unions are causing more trouble 

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00:16:32,700 --> 00:16:35,500
than Starbucks would like to 
admit, they're willing to change

340
00:16:35,500 --> 00:16:38,700
their entire corporate policy 
because of it and I think a lot 

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00:16:38,700 --> 00:16:42,600
of this stuff is political and 
it's Optics driven but overall 

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00:16:42,600 --> 00:16:45,800
Starbucks is still a company 
that is in secular growth. 

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00:16:45,900 --> 00:16:47,600
They're opening up stores 
rapidly. 

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00:16:47,800 --> 00:16:50,800
I think they'll generate more 
free cash flow in the future and

345
00:16:50,800 --> 00:16:53,800
even though it's largely 
undefined of what they plan on 

346
00:16:53,800 --> 00:16:56,400
doing with all their free. 
Cash flow instead of doing 

347
00:16:56,400 --> 00:16:58,200
BuyBacks. 
I think they might be able to 

348
00:16:58,200 --> 00:17:00,200
find something productive to do 
with it. 

349
00:17:00,200 --> 00:17:02,800
Maybe they will reinvest back 
into their company at a very 

350
00:17:02,800 --> 00:17:06,000
productive way, but I know that 
Starbucks generates a lot more 

351
00:17:06,000 --> 00:17:08,300
cash than what's necessary to 
pay their employees. 

352
00:17:08,300 --> 00:17:12,000
A very favorable wage so that 
cash needs to go somewhere. 

353
00:17:12,300 --> 00:17:15,400
So either they're going to pay 
down debt dividend out build new

354
00:17:15,400 --> 00:17:17,800
stores or reinvest back into 
their current stores. 

355
00:17:18,000 --> 00:17:20,800
A lot of options remain open for
the company but just fair 

356
00:17:20,800 --> 00:17:22,599
warning, if you're an investor 
in Starbucks. 

357
00:17:22,599 --> 00:17:26,800
Now, after this recent surprise,
Is I would not expect the stock 

358
00:17:26,800 --> 00:17:30,400
to be surging up words. 
Anytime soon it's down 4%, again

359
00:17:30,400 --> 00:17:33,600
today as analysts are giving it 
a downgrade because when you 

360
00:17:33,600 --> 00:17:36,600
stop doing share BuyBacks the 
earnings growth doesn't grow as 

361
00:17:36,600 --> 00:17:38,500
rapidly. 
So my opinion, I agree with the 

362
00:17:38,500 --> 00:17:40,400
analysts here. 
The company is worthy of a 

363
00:17:40,408 --> 00:17:43,700
temporary downgrade until they 
reinstate their normal policies.

364
00:17:43,800 --> 00:17:46,100
So that's my thoughts for now. 
I hope you enjoyed the episode 

365
00:17:46,100 --> 00:17:47,100
and I'll see you in the next 
one.