Hey everybody, welcome back to the Elon Musk Podcast.
This is a show where we discuss the critical crossroads, the
Shape, SpaceX, Tesla X, The Boring Company, and Neuralink.
I'm your host, Will. Walden, the legal team
representing Tesla shareholder Richard Tornetta, has adjusted
their demand for legal fees in the case against Elon Musk's
2018 CEO Performance Award. Initially, Tornetta's team
sought an award amounting to 29.4 million Tesla shares valued
over $5 billion. They have now proposed an hourly
rate adjustment to $73,948, leading to a total fee of
approximately $1.44 billion. Now, the Tornetta Verse Must
case gained prominence in January when Judge Kathleen
McCormick of the Delaware Court of Chancery an old Musk's 2018
CEO performance award. Tornetta's lawyers argue that
their substantial effort justifies their proposed
compensation. Initially, they requested a fee
based on 29.4 million Tesla shares, which would equate to
more than $200,000 per hour. And Tesla has contested the fee
request, proposing a much lower fee of $13.6 million for
Tornetta's league team. Now Tesla's position was
supported by Amy Stephens, a long time Tesla shareholder who
also secured legal counsel to oppose the $200,000 hourly fee
suggested by Tornetta's lawyers. In the revised filing,
Tornetta's legal team offered an alternative perspective on the
fee structure while rejecting Tesla's $13.6 million proposal.
They suggested a cash based alternative that would equate to
an hourly rate of $73,948, totaling around $1.44 billion.
This rate is a significant reduction from the initial
proposal, but still reflects their extensive work on the
case. Tornado's lawyers provided a
detailed argument supporting their fee request.
They cited historical precedents such as the Southern Peru case
where $35,000 an hour rate was awarded over a decade ago.
Adjusting for inflation, this rate would be over $55,000 per
hour today, which they argue justifies the revised rate of
$73,948 per hour now. The lawyers argued that even
Tesla's own estimates indicated a significant compensable value
estimated at 2.3 billion. Using these estimates, they
calculated that a low end cash award should be around 1.0842
billion. Based on the affirmed inflation
adjusted southern Peru numbers. They noted that this would still
be lower than what they. Believe is fair compensation.
Now, the attorneys pointed out that the southern Peru case
involved penalties that reduce the final award, and in this
case, the court penalized the plaintiff's counsel by reducing
their fee request by 1/3 due to delays.
And Tornetta's lawyers argued that without such penalties, the
justified rate would indeed be around $73,948 per hour.
Now, Tesla has responded by seeking to delay the July
hearing schedule to determine the legal fees, arguing that a
recent shareholder vote approved Musk's pay package it that
impacts the case, and Tesla's attorneys filed a request to
delay the hearing, citing the June 13th decision by
shareholders as significantly affecting the remaining issues.
Now, Greg Varalo, representing Tornetta, countered that Tesla's
attempt to re litigate the approval process for Musk's pay
package lacks legal basis. It should not delay the
proceedings. He asserted that the shareholder
vote has no legal effect after the court's judgement on the
merits now. Varello emphasized that the
court should move forward with the determining of the fee award
for Tornado's legal team, arguing that they deserve
billions of Tesla stock for the successful challenge.
Delaying the hearing would postpone the final judgement and
potential appeal process now. Judge McCormick previously
annulled Musk's pay package, finding undisclosed conflicts of
interest among Tesla's board members, and Mccormick's
upcoming ruling on the legal fees will finalize the case and
allow Musk to appeal to the Delaware.
Supreme Court. Now, Musk has reacted to the
court's decision by threatening to pull his company's legal
incorporations out of Delaware and calling for a new proxy vote
to move Tesla's corporate home to Texas.
Now, Texas people and Tesla shareholders voted
overwhelmingly in favor of this move.
So Tesla's moving to Texas and Musk's called Relocate Tesla's
corporate home and encourage other businesses to leave
Delaware reflects his dissatisfaction with the state's
legal decisions. Delaware's Chancery Court is
known for its expertise in corporate litigation, housing
more than 70% of Fortune 500 companies.
And despite the shareholder vote approving Musk's pay package,
Elon still faces legal challenges and overturning the
Delaware court's decision. The Court's ruling voided his
2018 pay package, which he must now appeal to secure.
The resolution of this case will have considerable financial
implications for both Musk and the legal teams involved.
The final determination of legal fees will set a precedent for
future corporate litigation and executive compensation cases.
The ongoing legal battle highlights the complexities of
executive compensation and corporate governance,
emphasizing the role of shareholder oversight in
corporate decision making. The outcome will be closely
watched by legal experts and corporate stakeholders.
And if you have any stock in Tesla, be sure to watch this.
See how this turns out. Because if Elon and company move
everything to Texas, it could change everything.
And remember, Elon threatened to pull away.
From. Tesla, if he didn't get his pay
package, he said he'd take his ball and go someplace else and
go play other places and he might not be able to do XAI or
other things because of this pay and the AI for Tesla.
Well. Some of it uses technology from
XAI. So Elon was gonna take that
away. I I don't know, it does it seem
like a bratty move? If you, you know, what do you,
what do you think? It seems like a a move that
almost a threat to shareholders that didn't approve of them
moving to Texas. He just said, hey, I'm going to
take all this money or I'm going to take everything else.
So that's up to you to decide, whatever you think.
And I think he's he should get the money because he did manage
to get through all of the bullet points that he had to do.
He had to achieve certain things, certain milestones and
he achieved them all with flying colors.
So I think he should be getting the award for that money.
How? As the case progresses, the
Delaware court's decisions will influence not only Tesla's
corporate structure but also the broader landscape of executive
compensation disputes. The legal principles established
in this case will guide future shareholder actions and
corporate governance practices. But ultimately, the court's
final judgment will determine the appropriate compensation for
Tornado's legal team and the validity of Musk's 2018 pay
package. The decision will shape the
future of executive compensation litigation for Tesla and Elon
Musk. Tesla and opponents of Elon
Musk's $56 billion compensation package clashed on Friday over
how to resolve the ongoing legal battle surrounding the pay deal
and the substantial legal fees contingent on its outcome.
Tesla contends that a recent shareholder vote to reinstate
Musk's compensation plan should overturn a prior court decision
that nullified the package. The company has filed documents
urging the Delaware judge to consider this vote and reverse
her previous ruling. The dispute began when Tesla
shareholders voted on June 13th to reinstate Musk's pay package,
initially approved in 2018. However, this decision is
pending while the lawsuit remains unresolved.
The shareholder vote occurred after Delaware Chancery Court
Chancellor Kathleen McCormick voided the pay package in
January, finding that the board's process was influenced
by Musk's personal relationships with board members and
inadequate disclosure of information about the deal.
Richard Tornetta, the shareholder who sued to
invalidate Musk's pay package, argues that the recent
shareholder vote should not impact the court's earlier
decision. Tornetta's legal team insists
that Tesla must appeal to the Delaware Supreme Court to
reverse the January ruling. Additionally, they argue that
before any appeal, Chancellor McCormick must determine the
legal fees Tesla owes for winning the case.
Tornetta's attorneys previously demanded 29 million shares of
Tesla stock, valued at over $5 billion, as their legal fee.
On Friday, they suggested Tesla could alternatively pay $1.1
billion, a figure based on precedent in the Delaware Court
of Chancery, though they described this amount as
unfairly low. Tesla, on the other hand, urged
the judge to address the implications of the shareholder
vote first, which could potentially reduce the legal
fees. Tesla maintains that the pay
package was re approved by shareholders and reviewed by an
independent board member, addressing the judge's concerns
about Musk's undue influence over the board.
The company plans to file a motion to reverse the January
ruling, arguing that the shareholder vote resolves the
issues raised by the court. Tornetta's legal team disputes
Tesla's position, asserting that the process for proposing the
ratification vote was flawed. They claim the shareholder vote
was influenced by Musk's threats to shift his focus to artificial
intelligence investments if he'd not gain more control over
Tesla. This coercion, they argue,
invalidates the vote's legitimacy.
Musk's pay package, structured with performance based targets
leading to stock option awards, was valued at $56 billion when
the last milestone was achieved. According to Tesla, the
compensation plan requires Musk to hold the stock options for
five years before exercising them.
This intricate structure is now under legal scrutiny as Tesla
seeks to uphold the agreement. The legal battle put significant
financial stakes for Tesla. If the courts rule in favor of
Tesla, the company can maintain Musk's pay plan and a $2.5
billion accounting charge recorded in 2018.
Conversely, a negative ruling could force Tesla to hold
another shareholder vote on the compensation plan and
potentially book a charge of at least $25 billion, threatening
future earnings. Kevin Murphy, an executive
compensation expert and finance professor at the University of
Southern California, testified for Tesla during the trial.
He emphasized the unprecedented nature of this dispute,
indicating that it's resolution could set new legal precedents.
The outcome hinges on complex legal interpretations and the
judge's decision making process. The spotlight now returns to
Delaware Judge Kathleen McCormick, who ruled that
Tesla's board did not act in the best interests of shareholders
when approving Musk's pay package.
Corporate law professor Anne Lipton from Tulane School of Law
noted that McCormick must decide whether the new shareholder vote
reinstates Musk's pay plan. This could involve considering
written and oral arguments or requesting additional
information and discovery. Tesla has requested an expedited
schedule for submitting court documents to present further
rationale for their positions. The company aims for a final
judgement from McCormick before taking further legal steps.
Tesla's legal team describes the recent shareholder vote as one
of the most well informed in recent history.
Citing support from major investors like BlackRock and
Vanguard, Tesla reported that 72% of votes cast by
shareholders, excluding Musk and his brother Kimball, favored the
compensation package. The upcoming hearing before
McCormick on July 8th will address unresolved matters,
including the request for $6 billion in legal fees by
Tornetta's lawyers, which Tesla disputes.
Should McCormick validate Musk's compensation, she might also
determine whether the shareholder vote retroactively
reinstates the agreement. As of 2018, Tesla claims this
could save the company at least $25 billion, making the court's
decision Making the court's decision even more crucial for
the company's financial outlook. Kevin Murphy suggests that if
McCormick acknowledges the shareholder vote, she might
decide not to interfere further in the contract between
consenting parties. However, Murphy doubts this
outcome, predicting that an appeal will follow with
McCormick rules against Tesla And Lipton also anticipates that
the losing side will appeal to the Delaware Supreme Court,
indicating that Mccormick's decision may not be the final
word on the matter. The case's resolution will
likely involve multiple legal maneuvers and further judicial
scrutiny. The broader implications of this
case extend beyond Tesla potentially influencing
corporate governance and executive compensation
practices. Legal experts are closely
monitoring the proceedings given their potential to set new
precedents in shareholder rights and board responsibilities.
As the legal battle continues, Tesla's ability to sustain
Musk's compensation package and navigate the associated
financial challenges remains uncertain.
The company's strategy and legal arguments will be critical in
shaping the final outcome and its impact on Tesla's future.
The upcoming court hearing and subsequent legal proceedings
will determine the fate of Musk's $56 billion pay package
and the financial consequences for Tesla.
The case underscores the complexities of executive
compensation and corporate governance in today's business
landscape. Tesla CEO Elon Musk has
confirmed that the company plans to spend between 3 billion and
four billion on NVIDIA AI chips this year.
This revelation came on Tuesday when Musk addressed the
reallocation of NVIDIA H 100 Graphics Processing units, GPUs
originally intended for Tesla, to his other ventures, X and
XAI. According to CNBC, Musk diverted
approximately 12,000 NVIDIA H100 GPUs from Tesla to these other
companies. This shift was confirmed by Musk
in a post on X, where he stated that Tesla had no immediate use
for the chips which would have otherwise remained in storage.
The GP US are integral to Tesla's ambitions in developing
its self driving technology. Tesla is constructing a
substantial supercomputing infrastructure to support this,
with the Giga, Texas facility nearing completion and slated to
house 50,000 H 100 GP US dedicated to full self driving
FSD training. Musk's actions have sparked
discussions among shareholders and analysts about the potential
delays this could cause for Tesla's supercomputing projects.
This reallocation might lead to months long delays in setting up
the necessary infrastructure, a critical component for advancing
Tesla's AI capabilities. The delays could add fuel to
ongoing criticism from Tesla shareholders, who are concerned
about Musk's attention being divided across multiple
companies. These concerns come at a time
when shareholders are voting on Musk's $56 billion compensation
package at the upcoming annual meeting.
The financial markets reacted to the news, with Tesla's shares
dipping nearly 1% on Tuesday, reflecting broader investor
concerns. Meanwhile, Nvidia's stocks saw a
1.3% increase, continuing its upward trajectory with 135% gain
year to date in 2024, driven by high demand for its GPUs.
Despite the reallocations, Musk remains optimistic about Tesla's
chip procurement, estimating significant investments in
NVIDIA hardware. He has stated that Tesla's AI
related expenditures for the year will total around $10
billion, with about half dedicated to the company's
internally designed AI systems and the Dojo supercomputer.
The Giga, Texas facilities development is a focal point for
Tesla's future. Musk highlighted that the
supercomputing center will initially require around 130
megawatts of power and cooling, with plans to expand to over 500
megawatts within 18 months. The facility's infrastructure
includes massive cooling systems, underground water
lines, and four large water tanks.
Musk confirm these developments in a recent post on X,
describing the center as a super dense, water cooled
supercomputer cluster. The facility is expected to play
a crucial role in enhancing Tesla's self driving technology
and AI capabilities. The diversion of GP US to X has
potential implications for Tesla's timeline in achieving
its AI goals. Musk's statement on X explained
that Tesla's Austin factory is not yet ready to utilize the
NVIDIA chips, justifying the temporary reallocation to
prevent the chips from sitting idle.
This decision may raise questions among Tesla investors
about Musk's focus and priorities, especially given the
company's ambitious targets for autonomous driving technology.
Tesla is set to unveil its first robot taxi vehicle in August.
Tesla's self driving technology, particularly its Autopilot and
Full Self Driving features, has faced scrutiny following
multiple crashes and fatalities. These incidents have put
additional pressure on the company to demonstrate progress
and reliability in its autonomous systems.
Meanwhile, Musk's AI startup XAI is positioning itself as a
competitor to giants like Open AI and Google.
Last month, XAI announced a $6 billion funding round aimed at
advancing its AI capabilities and developing new applications
for generative AI. NVIDIA, a critical supplier in
the AI industry, has seen substantial growth driven by the
demand for its GPUs. CEO Jensen Huang highlighted
during a recent earnings call that the company's products are
in high demand, contributing to a 200% increase in revenue last
quarter. Nvidia's success is tied to its
ability to supply essential hardware for AI advancements
across various industries. The company has become the third
most valuable in the world, reflecting its pivotal role in
powering AI research and applications.
Musk's confirmation of Tesla's substantial investment in NVIDIA
chips underscores the ongoing collaboration between the two
companies. This partnership is expected to
bolster Tesla's efforts in AI and autonomous driving.
Despite the temporary reallocation of resources, the
developments at Tesla's Giga Texas facility and the
integration of NVIDIA hardware are crucial for the company's
future AI endeavors. Elon Musk's strategic decisions
regarding NVIDIA chips are indicative of his broader vision
for AI across his various enterprises.
While the immediate reallocation may pose challenges for Tesla,
the long term prospects for AI advancements remain strong,
driven by significant investments and ongoing
developments in supercomputing capabilities.
Blue Origin has called upon the Federal Aviation Administration
to impose restrictions on the number of Spacex's Starship
launches from Kennedy Space Center.
This recent move is part of the ongoing rivalry between Jeff
Bezos and Elon Musk. Blue Origins complaint aims to
limit Spacex's Starship operations at Launch Complex 39
A currently the site for Falcon 9 and Falcon Heavy rockets.
SpaceX plans to use this complex for its Starship launches,
proposing up to 44 launches annually.
The FAA in May released Spacex's proposal for these high
frequency Starship operations at Kennedy, including the necessary
infrastructure to support such a launch schedule.
The public comment from Blue Origin is the latest chapter in
a long standing feud between Bezos and Musk.
The two have frequently engaged in public and legal disputes
over Space Flight supremacy, with both aiming to pioneer
space tourism. Musk, known for his sharp
retorts, responded to Blue Origins filing on social media
platform X, which he owns, with the comment Sioux Origin.
He further accused Blue Origin of using legal maneuvers to slow
down Spacex's progress. Although Blue Origins comment
holds no legal power, it will be considered by the FAA as they
decide on the restrictions for Starship's operations at
Kennedy. SpaceX is in the process of
obtaining a Commercial Launch Vehicle Operator license for
Starship at Launch Complex 39 A. This process includes preparing
an Environmental Impact Statement EIS under FAA
supervision to assess potential environmental impacts.
The maiden voyage of Starship ended in an explosion, causing
significant damage and prompting an FAA investigation.
The blast from the launchpad in Boca Chica, Texas, damaged
property up to six miles away, leading to legal action from
environmental groups against the FAA.
SpaceX has since improved the launchpad at Boca Chica to
better contain debris and mitigate environmental impact.
Despite these improvements, Blue Origin is leveraging the
incident in its plea to the FAA. Blue Origins public comment
cites the environmental scrutiny Starship operations have faced,
including the lawsuit against the FAA, as a reason for the FAA
to limit Starship launches at Kennedy.
Blue Origin also has operations at Kennedy Leasing Space Launch
Complex 36 and other facilities at Cape Canaveral Space Force
Station. The company employs over 2700
people in Florida with significant investments in
infrastructure at the site. The filing expresses concern
about the safety of Blue Origins property and personnel in case
of a Starship launch anomaly, such as explosions or debris.
It also mentions potential interference with shared
infrastructure and limited resources.
Blue Origin pointed out the massive fuel capacity of
Starship Super Heavy Booster, highlighting the potential for
significant environmental impact and safety hazards that could
affect other operations at Kennedy.
The company urged the FAA to cap the number of Starship launches,
limit launch times, and invest in infrastructure to make
Kennedy safer for other launch providers.
Blue Origin also called for compensation for commercial
activities impacted by Starship and penalties for SpaceX if it
violates its EIS or license. Blue Origin is developing its
own heavy lift rocket, New Glen, which has faced delays and has
not yet flown. The rocket has secured several
contracts, including one with NASA for a Mars mission, but the
rivalry with SpaceX remains fierce.
The rivalry has been especially public, with legal battles and
public taunts. After losing a court case
against NASA in 2021 over the Artemis Human Landing System
contract, Blue Origin later secured a separate contract as a
second provider in the military sector.
Blue Origin recently won a significant contract with the US
Space Force for 30 launches worth up to $5.6 billion,
following previous losses to SpaceX and United Launch
Alliance. Musk's public responses continue
to reflect his contentious relationship with Bezos with
accusations of legal obstruction rather than direct competition.
Blue Origins latest filing underscores the intense
competition and ongoing disputes between the two space companies.
The FA as decision on the requested restrictions for
Spacex's Starship launches will be an important move for the
company as it will need hundreds of launches from Kennedy Space
Center for the lead up to launch astronauts to the moon for the
Artemis missions. Can we for one second?
Think about SpaceX launching hundreds of Starships every
single year, both from Boca Chica, Starbase Texas, and
Kennedy Space Center in Florida. Now there are two companies that
made it very apparent that they don't want this to happen.
They did this the other day. And this is a thing that we have
to talk about as a community and as people that want to see
humans go to space, live on the moon, live on Mars.
And these two companies want SpaceX to be halted from sending
anybody to the moon for the Artemis program or in the future
to live on Mars. They made this very apparent in
some posts the other day. And Christian Davenport on X
posted this and A finally with the FAA regarding Spacex's
proposed use of Pad 39 A for Starship.
Blue. Origin, Jeff Bezos's company,
asked for a cap on the rate of Starship Super Heavy launch,
landing and other operations, including but not limited to
test firings, transport operations and fueling.
Blue Origin also says there should be mandatory penalties
for SpaceX for conducting operations not included in an
EIS or other environmental restrictions, violating a launch
license or any other laws, regulations, or other rules for
operating. OK, let's take a look at this.
So this reads, super heavy operations are expected to have
a greater environmental impact. Remember that part, The
environmental impact part is extremely important here than
any other launch vehicle currently operating at KSC Super
Heavy can hold up to an unprecedented 5200 metric tons
of liquid methane for propulsion, resulting in
qualified distances for safety margins that potentially overlap
the operational sites of other companies, the government and
the public. Now Blue Origin is talking about
their own facilities at Kennedy Space Center here.
Also the government, they pull them into this too, and the
public which does regular people doing regular jobs, which is
just people landscaping or doing whatever, you know, whatever
they do. Now the scary part is they
included environmental impact with this and this is where it
gets a. Little.
Bit dirty now. The data qualified quantifying
these qualified operations operation distances has not been
published, but given the anticipated super heavy launch
rate and vehicle impact, the impact of super heavy operations
at Kennedy Space Center maybe even greater than at Starbase.
Now let's go on a little bit further.
According the EIS should thoroughly evaluate the
considerable risks, alternatives, mitigations and
resources listed below. The issues raised herein are
reasonably foreseeable. OK.
Capping the rate of Super Heavy launches, landings, and
operations. Capping basically cutting off
SpaceX at the kneecaps so they can't do any launches or very
few launches from Kennedy Space Center.
Also no test firings. Transport operations, fueling to
a number that has a minimal impact on local environment.
Locally operating personnel and the local community.
They're just talking about the locals in consideration of all
risks and impacts, including but not limited to anomaly risk, air
toxin and hazardous materials dispersion, Rd. closures, and
heat and noise generation. They're basically calling out
SpaceX here. It's making them seem like
monsters. Government investment in
additional launch infrastructure that would make more launch pads
available to other entities in a manner that de conflicts the
Super heavy operations. From other launch providers
basically saying, hey, give us the.
Opportunity to continue doing our own launches while SpaceX is
doing their Starship stuff. It's a pretty big document and
it seems pretty sketchy in my opinion and I'm going to get
into. That a little bit later.
Why it's sketchy? What they want to do is put a
public perception of SpaceX into the zeitgeist.
The SpaceX is bad and Blue Origin is good.
Jeff Bezos, Oh, he's such a good guy.
Elon's unhinged. He's crazy.
Look at this guy. He does all sorts of wacky
stuff. He's a Wildman.
Jeff Bezos secretly undercover builds this massive rocket
that's in direct competition with SpaceX.
Direct competition was super heavy.
So by softening the blow with a greater environmental impact
statement on the 1st sentence, they make people think.
They make the government think, oh, this is going to be bad.
It's bad for the environment. Nobody wants to mess up the
environment. I don't I, I mean, you don't
want the water to get polluted. You don't want all of that
wildlife to die. Oh my God, what could happen if
SpaceX, if something happens, if SpaceX is super heavy rocket at
Kennedy Space Center, That's what they that's what they say.
This is a direct attack against SpaceX.
Now, mind you, the second sentence, unprecedented 5200
metric tons of liquid methane for propulsion resulting in
qualified distances for safety margins.
I understand this part that potentially overlap the
operational sites of other companies, the government and
the public. OK, so this part is true.
When Starship launches, the safety precautions that will be
needed for people, planes, boats, other companies, it's a
big kind of blast radius for this thing.
They have to be 7 miles away. And some of these companies,
including Blue Origin, aren't in that.
They are inside that blast radius.
They're not in the safe zone. So Blue Origin during these
launches, if there's going to be hundreds of launches per year,
that could be 100 days that SpaceX takes over Kennedy Space
Center. So this part of it totally
understand Bezos totally get it. Dude you look like a super
villain. OK, you have your giant yacht.
You. Have all the money in the world
and you also don't want this to stop your giant rocket from
launching and for your from your company from making money which
totally get it. Bezos is a savage businessman
and he will go after anybody that impedes his companies in
any single way. So SpaceX here, if Blue Origin
is in the blast radius of Starship super heavy, the keep
out zone from launches and of test flights, SpaceX, Elon
actually said they're not going to do test flights from Kennedy
Space Center, but they have to, right?
They have to get the the Starship ready to go at Boca
Chica, Starbase, Texas. But the first flight that they
do from Kennedy Space Center, it's not not a test.
They're going to be testing all the systems the first time.
Sure, it might be a successful launch and landing of the Super
heavy Starship, but it also could be, you know, a, a test of
sorts because they've never flown from that position before
from that spot. So from the Kennedy Space Center
launch tower that isn't even built yet, it's kind of a test.
So Bezos and company over here at Blue Origin, they kind of
have a point. I mean, that part of it, yeah.
But the whole environmental impact thing, that's.
Just a cover up. For what they really want, and
that's for SpaceX to get sued, they want legal precautions put
in place, mitigations if you will, for SpaceX.
So they can't launch from Kennedy's Space Center.
They want to hold them within red tape, strangle them for
years to come for within a environmental assessment,
environmental impact studies possibly could take years to
complete. Environmental impact studies,
you know they say here. Accordingly, the EIS
Environmental Impact Study should thoroughly evaluate the
considerable risks, alternatives, mitigations, and
resources listed below. Issues raised herein are
reasonably foreseeable. Now, here we go.
This is the part that gets a little bit wonky.
They're way ahead of everybody else.
So why would SpaceX not want to keep going forward here?
Elon and company, they're gonna keep working no matter what.
They're going to keep doing whatever they whatever they do
at Boca Chica, they're gonna make that second tower.
They're in the process right now on everyday Astronauts channel,
he interviewed Elon and Elon said they're building a brand
new tower. Everything's brand new.
The tower that we see now, it's going to be garbage compared to
this new tower apparently. And they're going to upgrade
everything, a new water system, new flame trench type system, he
said. Elon said the engineers are
going ham on this thing and building a a better tower.
So bigger tower, better tower. And in here they say the
government investment in additional launch infrastructure
that would make more launch pads available to other entities.
So basically, hey, we won't have the ability to launch when
SpaceX has Super Heavy ready to launch.
We won't be able to do any of our operations.
We need. We need the room, we need the
space, we need the time. So build us another pad, get us
all the other stuff that we need, the the roads, whatever we
need. We need like some other ways to
do our job. Totally get it.
And is Elon and SpaceX pushing the boundaries of Space Flight?
Yes. But is he pushing back on people
that are slow? Yes.
You know, if if Blue Origin can't keep up with them, then
what is what is Blue Origin supposed to do?
They're going to sue them. They're going to sue you.
Sue the hell out of them. And the FAA is gonna go along
with it. You know the FAA isn't gonna go
along with it, but the FAA. This is a letter to the FAA, by
the way. This isn't just something they
put out there. So here's another second
company. So not only was it bad that Blue
Origin was doing this, but also the ula has entered the chat.
What is up? Tori, Tori Bruno, You have a
cool cowboy hat. You have a cool mustache.
When you grow it out, you ride a horse, you have a giant rocket
company that's worth billions of dollars, but yet you joined up
with Blue Origin to also attack SpaceX, and it seems kind of
sketchy. I'm not going to lie here.
I want everybody to get along. I want all these rocket
companies to work together so people can work and live on the
moon and go to Mars. Why would you want to stop that?
The reason is it's Monday. Moolah Big green.
Now this is what Ula had to say. As a threshold matter, the EIS
must acknowledge that Starship is still in experimental stages.
SpaceX plant operations at LC39A Kennedy Space Center have
evolved and continue to evolve. We know it's a test vehicle
right now the FAA knows Starship is the largest rocket ever built
and is currently tested at Spacex's private base in Boca
Chica, Texas and in prior test results test flights SpaceX Now
this is the scary part people has experim experienced several
technical accidents. In addition, SpaceX has
acknowledged that the vehicle is not meeting anticipated
performance levels, and as a result, SpaceX has indicated
that it plans to increase the size and thrust level of the
vehicle stages to address this performance shortfall.
This would result in environmental and safety issues
greater than those witnessed at Boca Chica.
Let's scare the pants off everybody.
Let's just scare them, OK? They have a big rocket.
We know that it's gonna have more thrust than anything.
Everybody knows that the FEA works completely hand in hand
with SpaceX. So it's not like the FEA doesn't
know this stuff. And I can't believe they did
this on the same day as Blue Origin, within the within 24
hours of each other. Come on, Tori.
You know what, Tori? I'm not mad about this.
I'm just disappointed in you. You could have taken the High
Road. You could have done the right
thing. You could have competed with
SpaceX directly. You could have spent money
building reliable reusable rockets that could be launched
from an American launch provider with such a heritage and
prestige. Like ula you could have just
fought them hand to hand combat. But instead you're using sneaky
tactics. You're being a little sketchy
here. You're talking at the side of
your mouth. You should be talking
straightforward instead of saying this environmental stuff,
these rockets, they're going to hurt things.
Yeah, it's in a it's, it's a deal, right?
The FAA, SpaceX, it's a big deal.
It's a big rocket. But instead you took the low Rd.
Tory Ula and Blue Origin. If you think they're not working
together on this, they're both posted within the same 24 hours.
There's some stuff going on here between these two companies.
People talk, they're in the same industry, they work right down
the road from each other. So of course, somebody wrote an
e-mail, hey, we're going to release this thing or ula.
Saw. What Blue Origin did and said,
hey, we can do the same thing. Let's get on, Let's get them
guys, make a better rocket that can compete with the Super
Heavy. You wouldn't have to worry about
this. OK, so there's other parts to
this that we can go through, and Blue Origin covered most of it.
But they're disguising this as an environmental issue when in
all actuality, this is about money, baby.
Billions of dollars that they could be getting from the
government and from other sources.
Department of Defense, private contractors flying satellites
into orbit, whatever it is ula Blue Origin.
See the writing on the wall? They're scared.
They're backed up into a corner. SpaceX is eating their lunch.
Now these two are trying to fight back.
They're trying to be the bullies.
But what they're doing here is they're being sneaky, and
they're being, let's just say, a little bit underhanded.
They're using the system, the FAA and the government to their
advantage, and they're coming directly at SpaceX for this.
Now, remember, if SpaceX gets tangled up in this red tape,
they could be stuck in it for years to come.
And we couldn't see a SpaceX Starship launch from Kennedy
Space Center for two, maybe three years because of this.
What happens to the Artemis program because these two petty
companies are attacking SpaceX? I understand where they're
coming from. If they're in the blast radius
of a Starship, figure it out. The FAA, SpaceX, Kennedy Space
Center, they'll all figure it out.
And because these two bigger companies, these two big
companies, massive rocket companies are working with the
government and they're working with NASA, Kennedy Space Center,
etcetera, they have some pull. So I get it.
I totally get it, but just do it the right way.
Let them handle their business. I understand where you're like
where you're airing this out right now, but it's pretty
sketchy. It's pretty like obviously you
work together on this. No matter Like show us, show us,
show us that you didn't show us that you didn't work together.
How about that? OK, that's pretty.
It's very funny though, that like they didn't, they didn't
expect us to get that. Do you do it right?
Let them go through the proper channels.
The FAA. Let them do their thing.
If the FAA says they're ready to go, then they're ready to go.
SpaceX intends to launch a larger model at LC39A than it is
currently testing in Boca Chica. SpaceX reveal plans to at
minimum quadruple payload size to make up for shortfalls.
I'd like this the shortfalls in predicted performance.
Starship will. Eventually be 400 and. 92 feet
tall, by the way, That's freaking huge. 500 feet tall. 50
story building what? In the world.
Is going on super. Every booster is expected to
hold up to 4100 metric tons of propellant, the Starship up to
2600 metric tons. The maximum liftoff thrust is
anticipated of 103 mega Mega Newtons, resulting in launch
impacts would far exceed current impacts seen during current Boca
Chica launches. Yeah, it's a bigger rocket.
We know additional growth of the Starship.
Launch vehicle may be planned if performance continues to fall
below expectations. Given these changes, EIS must
perform a comparative analysis between current usage impacts
and the proposed operations, with a rocket proposed to be
more than double the size of any current licensed launch vehicle
and with increased frequency of launches.
So hundreds of launches per year, hundreds of launches say
100 launches say even 50 launches per year, 50.
Launches that's. 50 days that some of these engineers and
workers in the office anywhere, any driving a truck, who knows
what you're doing out there. You could just be like watering
the lawn, doing landscaping at Kennedy Space Center, but you
couldn't do it. Because.
SpaceX is launching a Starship. I get it.
Tori. I I.
Understand where you're coming. From.
SpaceX and the FAA work like this.
They work like this. They also do this.
That's a magic trick, by the way, children, this, that's a
trick my dad taught me anyway, not to be a little bit weird,
but that's a cool thing you can do, by the way, and show people
that you have magic fingers. And if you do it to a little 3
year old, they're going to be like what has happened?
SpaceX knows what they're doing. They've been working with the
FAA since inception, and the FAA is very knowledgeable about
what's going on in Boca Chica. They have to be because they're
operating with SpaceX. They're authorizing SpaceX to
launch these rockets from Boca Chica, so they know exactly
what's going on. They did damage reports for the
first second. 3rd. And upcoming launches, they're
doing all that stuff with SpaceX and they know what SpaceX is
planning. So anything they do here,
anything that Blue Origin or ula does, it's just them beating
their chest and shoving SpaceX to the side and saying, hey,
let's wrap you up in some red tape.
Let's do another environmental impact study.
They putting up pressure on the FAA.
It could. Happen.
And SpaceX could be stuck in that red.
Tape. For two years while they do an
environmental impact study to see if anything is gonna happen
with the Starship. If.
Anything goes wrong? Do you think this is right?
Ula and Blue Origin, do you think this is the right way to
do it or do you think that, you know, making this public and
posting these things on the same day, You don't think this is an
attack, direct attack on Space X2?
Two of the biggest. Space Flight companies in
existence just just so. Happened to have the.
Same idea on the same day. It's so cute, so cute.
June 25th. Hey, I got this idea.
I think I'm going to post something on my account about
the FAA. This is pretty cool.
And then that was Blue Origin, by the way.
And then ula goes, I got an idea.
You got this really great idea. I think I too am going to post
something that I don't know anything about Blue Origin, but
I'm going to do it myself. Let me just post this.
And nobody, nobody knew that this was going to happen.
Whatever, dude. These companies, they're talking
to each other. There's some background stuff
going on. They're both like, yo, what are
you going to post today? Hey, let's post this up, dude.
There's like two people, you know, there's.
There's like this. Scheme.
You know how you always think like those people that are like,
oh, there's like a dark whatever.
In the background. That's controlling things.
It's just people, right? But these people are weird.
Like these two entities ula and Blue Origin, they're like, let's
make the maximum impact against SpaceX.
Let's do it together, let's fight SpaceX.
And if we do it and there's two of us.
SpaceX can't. Fight us, because we're gonna.
Get the FAA involved, we're gonna wrap him up in this red
tape and they'll never get out. And then me being Blue Origin,
I'll be able to launch my giant rocket from Kennedy Space Center
before SpaceX launches their rocket from Kennedy Space
Center. You get a little bragging
rights. You might get some contracts
that SpaceX doesn't get because you have a flight proven.
Rocket. SpaceX doesn't have that yet.
You might get big. Contracts you might.
Get government contracts. You might get Department of
Defense contracts that are only awarded to.
Rockets that have. Made it to orbit or have done
other certain things. And if Blue Origin can push
SpaceX back from doing that from Kennedy Space Center, who knows
what kind of contracts they could get.
Millions of dollars, billions of dollars worth of contracts the
SpaceX might not get because Jeff Bezos and company ula
included Tori calling you out. Cowboy hat looks cool.
That big mustache you had look cool.
But you know what? You're a punk.
Stop it. Stop it, Jeff Bezos.
Stop it, Tori. You're being babies about this.
SpaceX is going to work with the FAA.
You didn't have to do. This this.
Is such a bitch move, dude, come on.
Come on. I know my channel's like for
fun, but this is a real bitchy thing to do, so come on.
That's all I'm saying. Christian, Thanks.
For posting this. Washington Post Christian
Davenport Good, good tweets but. If you like this kind of.
Commentary and you want to be part of this community, please.
I urge you to hit the thumbs up and the subscribe button if
you're on YouTube. If you're on your podcast
platform, please hit the follow button because it does help out
the channel tremendously. Now, if you are on YouTube and
you do a thumbs up and you do the subscribe and you do a
comment too, that'll be great too.
If you don't have anything to really say to add to the
commentary there, please just post a rocket emoji.
That'd be great because we all like Space Flight, but the
algorithm's going to pick that up for you.
Not just for me, but for you. And they'll start sending you
more spaceflight content, not just from this channel, but from
other spaceflight creators that you might not have heard about.
I do it all the time. I get random spaceflight people.
I'm like, oh. They have a different
perspective. This is cool.
So that's what the algorithm does for you.
Some podcast players do that too, but on YouTube, that's
exactly what it does. So please, like, comment,
subscribe, and if you really like this stuff, please become a
member of the channel because it helps me out and helps me
continue to do these shows every single week and bring you all
the news and commentary about all this weird stuff that
happens in Space Flight, like this weird thing that happened
today. Let me know in the comments what
you think. All right, that's it for today.
Everybody please take care of yourselves and each other, and I
will see you in the next one. Tesla shareholders have.
Recently voted to ratify Elon Musk's 2018 stock options
package, appearing to defy a previous court ruling that
voided the pay plan. Now, this vote comes after a
January ruling by Delaware Judge Kathleen McCormick, which
rescinded Musk's compensation package due to concerns over
undue influence and misleading information provided to
shareholders. Now, Tesla attends of the
shareholder vote nullifies the court's decision, thus making a
new development in the ongoing legal battle over Musk's $56
billion pay package. Now, in January, Chancellor
Kathleen McCormick of Delaware's Court of Chancery invalidated
Musk's pay plan. The judge determined that Musk's
close relationships with some Tesla board members unduly
influenced the negotiation process.
Moreover, the company was found to have inadequately informed
shareholders about Tesla's progress toward meeting
performance based targets. This ruling posed a significant
challenge to Musk, who had been instrumental in Tesla's
emergence as a leader in the electric vehicle market.
Now the recent. Shareholder vote.
Which took place two weeks ago approved the 2018 stock options
package. Tesla argues that this approval
signals strong support from Musk's leadership and
compensation plan, effectively indicating the January court
ruling. According to Tesla's filing, the
final court order should state judgment is entered for the
defendants, indicating that the company and Musk have prevailed
in this legal contest. However, the legal team
representing the shareholders is contesting this outcome.
They're urging the judge to uphold her original ruling and
mandate that Tesla pay them potentially billions of dollars
in Tesla stock as legal fees. Richard Tornetta, the
shareholder who initiated the lawsuit, has requested 29
million shares of Tesla stock that's at around $5 billion as
their fee. Alternatively, they have
proposed a $1.1 billion payment, which they argue is based on
precedent but still unfairly low in their view.
Now Judge McCormick. Has ordered both parties to
prepare briefs addressing the impact of the shareholder vote
on the case. She has also scheduled oral
arguments on this issue for late July or early August.
On July 8th, McCormick will hear arguments specifically about the
legal fees, with a ruling expected a few weeks later.
Even if she does not reverse her January ruling, she might
consider the shareholder vote as an indication that Tesla
shareholders support Musk's compensation, potentially
undermining the fee request from the shareholders legal team.
Now Tesla. 'S assertion in the court.
Filing that Musk won the legal battle over his pay package
because of the shareholder votes reflects the company's belief
that this approval overrides the previous court decision.
Tesla's filing, made public on Thursday, argues that the
shareholder vote should lead to a final order favoring the
defendants, effectively siding with Tesla and Elon Musk.
And the legal team for the shareholders maintains that the
judge should adhere to her initial ruling invalidating
Musk's pay package. They're seeing seeking a
substantial legal fee award from Tesla, which they argue is
justified by the value they provided to the company by
having the pay package rescinded.
Tesla, however, contends that a fair fee might be as low as
$13.6 million now. On Thursday, Judge McCormick
directed both sides to begin preparing briefs outlining their
positions on how this shareholder vote affects the
case. She also instructed them to.
Argue. On a date for oral arguments in
July or early August and the judge will hear arguments about
the legal fees on July 8th and may take several weeks to issue
her ruling. Now, even if Judge McCormick
does not reverse her January decision, she might consider
that the shareholder vote demonstrated a lack of value in
winning the case between Tesla shareholders evidently support
Musk's record-breaking compensation.
This could significantly weaken the shareholders legal team's
argument for a large fee based on the purported benefit they
provided by rescinding the pay package and Musk's pay package,
which is 56. Billion dollars.
Consists of performance based targets that trigger stock
option awards. He must hold for five years
before exercising when the last target was achieved.
Now, the value of the package fluctuates with Tesla stock
prices of course, which has declined by over 20% this year
due to weaker consumer demand for E VS.
Tesla's defense team, in a motion fell down June 20th,
argued that the shareholder ratification vote vindicates
Musk's stock options award. They asserted that the
consequences of the ratification change the litigations course,
in effect any potential relief and attorney fees that might be
awarded to the plaintiff's council.
Chancellor McCormick, in response to Tesla's motion,
wrote that she wants to conduct the hearing on the legal fees
without considering the shareholder vote, as a separate
meeting will be held to address the votes impact, she said.
Given that, we will hold a separate oral argument devoted
solely to the questions raised by the stockholder vote.
For the purposes of the July 8th hearing, the parties are
instructed to argue the points at issue without regard to the
stockholder vote. All arguments.
Concerning the. Stockholder vote will be deemed
preserved now. James Park, a securities
regulation expert at the University of California, Los
Angeles, said there's an importance of considering the
shareholder votes impact on the litigation's overall value.
He said. My only thought.
Is that the? Defendant is correct that it
would be difficult to evaluate the benefit of the litigation,
which is necessary to evaluate the fee request, without
considering the impact of the shareholder ratification vote.
He added that McCormick. 'S response.
Likely indicates that she is preserving her options.
Attorneys for both Tesla and Tornetta, the plaintiff, have
not responded to requests for our comments here, and the case
outcome remains uncertain, with significant implications for
both Musk's compensation and the shareholders legal fees.
Somebody's going to be paid billions of dollars here now.
The ongoing legal battle over Musk's $56 billion pay package
continues to generate considerable attention, and
Tesla's contention that the shareholder vote nullifies the
earlier court ruling adds a kind of weird dimension to this
dispute. The final outcome will depend on
the judge, of course, and. How they interpret?
The shareholders vote impact and her ruling on illegal fees.
But despite these challenges, Musk has continued to lead Tesla
forward. It's challenging right now.
The EV market is dwindling and the companies face slower sales
and increased competition in their sales.
Musk is hinted at developing some new products outside Tesla
if he doesn't secure a large ownership stake.
This is a high stakes thing going on right now, and the
resolution of this case will likely have broader
repercussions for corporate governance in executive
compensation practices going forward.
The involvement of Tesla shareholders and ratifying
Musk's pay package shows that this is a complex matter.
They have to balance this between shareholders, investors
and the board and Elon Musk and also the courts and as the legal
proceedings. Progress.
The implications of the shareholder vote in the final
ruling on legal fees will be in everybody's mind, and it may
disrupt Tesla's stock going forward.
So be careful out there. This isn't stock advice, this
isn't investment advice, but just be careful with what you
buy in the near term if you. Plan on buying.
Tesla 'cause this could have a could have a negative or
positive impact depending on how this goes.
So just take heed there. Hey, thank you so much for
listening today. I really do appreciate your
support. If you could take a second and
hit the subscribe or the follow button on whatever podcast
platform that you're listening on right now, I greatly
appreciate it. It helps out the show
tremendously and you'll never miss an episode.
And each episode is about 10 minutes or less to get you
caught up quickly. And please, if you want to
support the show even more, go to patreon.com/stage Zero.
And please take care of yourselves and each other.
And I'll see you tomorrow.