Motley Fool Money - Trouble At Tesla

Episode Date: September 28, 2018

The SEC sues Tesla CEO Elon Musk for fraud. Analysts David Kretzmann, Seth Jayson, and Jason Moser talk Tesla, Nike, Vail Resorts, McCormick, Michael Kors, hot IPOs, and Dunkin’s new name. And Bloomberg technology editor and best-selling author Brad Stone talks Uber, Lyft, Facebook, and Amazon. Go to www.Harrys.com/Fool to redeem your offer and let them know we sent you to help support the show!   Learn more about your ad choices. Visit megaphone.fm/adchoices

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The best thing in life are free, but you can give them to the... From Fool. Global Headquarters. This is Motley Fool Money Radio Show. I'm Chris Hill. I'm Chris Hillen, joining me in studio this week. Senior analyst Jason Moser, David Kretzman, and Seth Jason. Good to see you, as always, gentlemen. Hey, hey. We've got the latest headlines from Wall Street. Best-selling author Brad Stone is our guest, and as always, we'll give you an inside

look at the stocks on our radar. But we begin this week with Tesla. On Thursday, the SEC announced it is suing CEO Elon Musk for making false and misleading statements to investors. This came just hours after Musk reportedly backed out of a proposed settlement with the SEC that would have resulted in a fine for both Musk and Tesla, a requirement that Tesla had two new independent directors and a two-year ban on Musk serving as chairman of the board. So, Jason, now, by not taking the settlement deal, Musk is looking at the possibility of being banned from being a CEO of Tesla

or any other public company for a long time. And that's a distinct possibility, which leads me to believe that we will see him change course here. I think he will end up probably accepting some sort of a deal once he realizes the hole he's dug himself into. But I think we have to ask ourselves the question here, investors have to ask, what's worse, Musk staying with the company or leaving the company? And I actually think at this point as CEO, he would be very limited in what he's going to be able to do. I think he's becoming a liability as opposed to the asset that he once was. I think he can still be a part of guiding the company's vision, but clearly he needs an operator who can get in there and focus on running the company without having to maintain that public

presence to keep the stock price propped up. So, I mean, we talk about it a lot with leadership being a big reason to invest in a company, yet also a big risk. And I think Tesla is pretty much playing out to be the textbook example. Seth? Well, the idea that the stock price needs to be up or that there has to be confidence in order for them to get some debt funding. They're probably going to run out of cash soon.

The trouble is that they've got their doodle in a ringer here, right? Because he's kind of, he's sort of the valuation, the personality, right? Now, it's fairly clear if you've been watching this at all. I mean, high-level executives have been leaving. If you read the complaint, you see that the CFO is sort of coutowing and saying, well, I know you've probably already thought about all this, but maybe we should have a blog post that explains this when it's clear that they know he hasn't thought about it at all. And so I think one of the risks for investors is that there really are no grownups there,

and there haven't been grownups for a long time. And they've been flying by the seat of their pants, and it's worked for a while, but they've never met those production goals until they, you know, started building cars in the parking lot in the tent, right? And so it's not an easy fix. And absent an easy fix, what do you do without the person? The shares of Tesla down 11% Friday morning. David, you're a shareholder. What goes through your mind as you're watching all of this play out? This reminds me of the Papa John situation that we've seen earlier this summer, where the company at this point is really between a rock

and a hard place. Elon obviously said things that he shouldn't have, did things he shouldn't have. But in a lot of ways, Elon Musk is the brand of Tesla. He still owns 20% of the company today. So I do agree at this point. I think the board needs to bring in someone new to take over that CEO or operational role. But even if Elon doesn't have that executive title, if he remains as an advisor, or even if he's disconnected entirely from any operational role at the company, how much autonomy would that new executive have? As we know, I was going to say. Elon is not shy to voice his opinion on Twitter or podcasts or anywhere else. I don't think that would necessarily stop if he is taken out of that role at Tesla because he still owns a fifth of the company.

So it's a difficult situation, so I would hope that Elon Musk, of his own volition, would recognize that maybe this is a time to take a step back. You can remain an advisor and still be involved in a company, but you need some help at this point. I'm floored that the stock hasn't gotten punished more than it's gotten punished, to be honest with you. I mean, it's still $46 billion company or something like that. And, I mean, it doesn't look like they have any real clear path of profitability anytime soon. And this is only going to hurt their situation. I mean, things just don't really look all that great in the near terms. I'm frankly surprised that the stock is still getting as much credit as it is.

Nike's first quarter revenue came in just shy of $10 billion, but shares of Nike were flat this week. Seth, this is a great company, but this increasingly looks like a pricey stock. Yeah, and it looked. I had a hard time decoding. Why, if you just look at a page on the internet, it's a little bit? It looks like it's trading for like a 65 multiple, which is crazy. And they had a big tax bill in the trailing 12 months, which moved things about a buck and a quarter.

So in a more normalized basis, they're trading at about 35 times earnings, which may not sound like a lot, but you have to consider Nike is already a huge company. It's growing the top line in the sort of 8, 10 percent range. Digital is going quickly, and they have some interesting innovations that might help them a lot on the cost side in shoes. but it's still tough to swallow. On the other hand, their returns on capital are great, and they are doing a super job of connecting directly with consumers through apps.

People can order specialized shoes that way, and so their wholesale shipments have been good. They're doing an amazing job in China, and so there's still a lot of growth left here, and people are willing to pay up for it. Yeah, I agree on the valuation front. Really, no matter which way you slice it, the valuation looks to be on the price or end of the,

spectrum. Another way to look at it is the dividend yield, which right now is under 1%, which is toward the lower end of its historical range over the past five to 10 years. So I'm personally a Nike shareholder built up a position over the past couple years. I'm thinking, yeah, maybe this is a time to lighten that position a bit. And if and when the price does drop or the valuation improves, that's when you look to maybe build up a position again. Yeah, I mean, this is, this company should definitely be on everybody's recession wish list. I don't know if I'd buy it right now, But on the other hand, maybe I would to remind myself to buy some more later if when it drops. They're doing a great job.

They've really fended off Under Armour. Adidas is a strong competitor. And they're just growing like a weed everywhere except North America, which is only about 6% growth. Don't forget about Puma. The Puma. Absolutely. And I think you can certainly argue that the company does deserve a premium valuation. I'd say we're still on the high end of the spectrum here.

But, I mean, the company generated, what, $4 billion in free cash flow of the past year? That continues to increase. So really strong across the board. Vail Resorts wrapped up its fiscal year with a loss in the fourth quarter. Vail Resort's management said the company suffered from historically poor winter conditions. Which, David, when you're in the business of ski resorts, that's got to hurt. It hurts, but the impressive thing about Vail Resorts is the model that they've been shifting to is selling season passes. That's helped really smooth out those resorts.

It's a seasonal business, but especially in the western U.S. I think you had less than 50% the average snowfall over the winter. But over that same period, resort revenue actually increased 2%. So they've really found a way to smooth out the edges there with that business. And they are increasingly diversified across the globe. Whistler, up in British Columbia had strong results. Their new resort, ski resort over in Australia is doing well. Now they have a partnership in Japan, so Europe as well.

So having that diversification across the world, bringing more people into the season passes, trying to increase repeat visits. It's really helped smooth out the business despite that seasonality. A mixed third quarter report for McCormick, the Spice Maker's profits, looked pretty good, but overall revenue was a bit light. Still, Jason, I mean, this is the rare packaged food. company that's doing well. I mean, revenue was a bit light. Let's be very clear here. Just a smidge. I mean, really, if you round up, they hit everything. A couple of shakes. A dash. Exactly. A dash.

There you go. I think McCormick and everybody knows I love this company, but I think that's for good reason. The RB Foods deal that was announced a little bit over a year ago is no longer a question mark. Chris, it was a smart deal. It was well executed. The stock is up 40% since that deal was announced. Franks and Frenches, which is what they got from that deal, contributed about 10% to the 14% revenue growth for the quarter. They've added distribution for those powerhouse brands to 20 new countries year-to-date as well. So what that's playing out in is expanded operating margins. They're seeing some leverage to flow through the model there with a larger global footprint. And I think another thing to remember here is that they can absolutely, in time,

make another meaningful acquisition down the line. And actually, I think they will, because, I mean, you really do have the market leader in the flavors and spices segment, which is very resilient. It's not going away. Technology can't really disrupt it. And the value proposition is strong. So I think that we continue to see good things from McCormick. Shares are around 30 times earnings today adjusted for tax benefit, not unreasonable for a high-quality business like this. It's dividend aristocrat. What's their app, their direct sales, or direct sales looking like these days. I don't know, man.

Don't you just buy your spices in the grocery store? You know what? If they start talking about that, that's probably the time to run. Yeah, direct-to-consumer, that's what I start wondering. They can have a subscription box. You don't know what you're going to get. There you go. The Netflix of Spices.

I can see it. Amazon is taking notes right now. Your Alexa is sending this to them. Coming up, if you're going to rename your company, you might want to give a heads up to whoever is in charge of your website details next. You're listening to Motley Fool Money. All right, quick word about home buying because of rising interest rates, and they are rising. There's a lot of unpredictability when it comes to buying a home, and it's causing a lot of anxiety

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Rocketmortgage.com slash fool. Rate shield approval only valid on certain 30-year purchase transactions. Additional conditions or exclusions may apply based on Quicken Loans data in comparison to public data records, equal housing lender licensed in all 50 states, not 47 states, all 50. NMLS Consumer Access.org, number 3030. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, David Kretzman, and Seth Jason. And busy week from Michael Coors, the handbag maker is buying luxury brand Gianni Versace for $2.1 billion.

After the deal closes, Michael Coors is changing its name to Capri Holdings. Capri Holdings. I think we've seen this movie before with Coach and Tapestry. Yeah, and it's a thing in Europe, too. A lot of the actually even larger brands are sort of conglomerated together into a few big names. The last I remember of Michael Coors is back when they were struggling a little, and they seemed to have recovered a bit from that, not growing like gangbusters anymore, but at least not kind of squeezing down. And so the Versace deal looks like it makes decent sense. It pains me to say that because Versace clothes are just horrific.

Oh, here come the email. But, you know, Versace does about 850 million bucks, but the investor did. deck. If I'd seen the investor deck first, I would have been horrified because it's just one of these things that's got magical thinking. So here you see, you know, somebody wearing their Baroque slash rock and roll. You know this is a radio show, though, right? Exactly. I'm holding that up. But it's for you guys here. You just see like the current revenues are $850 million. Then there's just a line up to $2 billion. And underneath that one, it says, future. I'm not cool. Is that like South Park and the underpants known? It is a little bit. It's like step one, collect underpants, step two, step three, profit. They have more of them where they just say, hey, here's what we'll do. But the fact is, Cores is doing okay, and they could use a little bit more exposure in Europe,

and this will get them there. And I think the businesses are close enough, and there probably will be some synergies they can squeeze out of this. So it actually looks like it makes pretty good sense. Another week, another hot IPO. SurveyMonkey went public on Wednesday, and shares popped more than 40. David, I get that Survey Monkey is the world leader in digital surveys, but this enthusiasm, is it warranted? Nothing sexier than survey software, right, Chris?

They're really going after a few different markets. They're going after talent management, customer experience management, and market research. So essentially trying to help organizations learn more from employees and customers. And those are multi-billion dollar markets worldwide. They operate both domestically here in the U.S. but internationally as well. It makes up a good chunk of the revenue. There are some things that are attractive about the company. They are cash flow positive. They have 600,000 paying users and a lot more registered users. But the company's not growing all that quickly. Revenue only grew 6% in 2017. So

far this year, sales are up 14%. And after that pop with the IPO this week, they're trading for about 10 times revenue, which seems like a really generous multiple for a company that isn't growing all that quickly. So I'm definitely not rushing in to get into this IPO. It's, yeah, we do survey monkey stuff here, but we're the kind of company where, you know, we, we have Octa because we all have 15 different logins. I just wonder, how long can that last and you have companies like ServiceNow, kind of, or Paycom, sort of lumping in an awful lot of HR and related systems all in one. Even Google or just something free from Google. Yeah, it's hard to compete with, you would think, but maybe it's not. Maybe I don't know what I'm talking about.

I mean, look, they're earning a bunch of revenue already. So it just seems like the kind of thing that I don't understand how it could stay long term. They also have a pretty catchy name in SurveyMonkey. Survey Monkey. Well, that's the thing that the company actually was founded in 1999. So you have to take a step back and wonder, why now for the IPO, when they aren't really growing all that quickly? They are known for having a strong employee culture. And leadership at the company is impressive.

Cheryl Sandberg is on the board of directors. She owns 10% of the company. her late husband used to run the company. Serena Williams, the tennis star is on there, Intuit CEO. So they do have heavy hitters there. So some of the qualitative stuff you got to like, but the numbers, I just don't think, back up the generous valuation. Shares of Bed Bath and Beyond hit an 18-year low this week after a dreadful second quarter report. And Jason, for all of its struggles, Bedbass and Beyond is still a much bigger retailer than Sears.

Yeah, I mean, that's the Beyond, right? We can't really quantify it. and that's probably what's getting into a little bit of credit today. And I think, unfortunately, the bottom line, though, there is really no magic bullet for these guys. I mean, there's no obvious catalyst that turns this story around. I mean, when was the last time you went to a bed, bad thing? Years. Yeah, right.

I mean, I can't remember either. And I don't even know where one is at this point, but... It's in strip mall somewhere. Exactly. Can the concept continue to exist? Of course it will. What I invest in it? Never, never, never, never.

I mean, I think we're going to continue to see sales remain challenged. We'll see a stagnating store base. They'll start shutting down stores in order to streamline. It feels like management is chasing their own falling knife here, too, which is just confounding. Since 2012, he spent around $7.5 billion on share repurchases. And throughout that entire time, it's like that Price is Right game where the guy climbs up to the mountain and gets up to the very top and the person overbids and the guy falls off the mountain. That's what their stock prices look like since. since around then, too. So, I mean, the balance sheet being in a net debt position, there's

really not a lot to like about this situation right now. So perhaps one day will have something positive to discuss with these guys, but I don't think this quarter is it. And the worst part of all is that they actually went into debt to fund those share repurchases. And what baffles me is the company is actually producing a decent amount of free cash flow, but they aren't using any of that to pay back debt. I think you see so many retailers, even like Toys R Us, it wasn't operational issues that caused Toys R Us to go banking. It was the massive amount of debt that the company amassed. So I think if you are a retailer generating free cash flow, you've got to pay down the

debt so you do have more flexibility down the road. Are they just getting killed by online sales? And what's their response to this? I haven't looked at these folks for 10 years, probably. They actually have tried to develop an Amazon Prime-like subscription. It's, as I understand, still in beta form. And I just can't imagine at this point they can make a whole lot of inroads there, given the popularity with Amazon's Prime, not to mention Ways.

and what it's done in such a short amount of time. This week, Weight Watchers announced it is changing its name to WW as part of its focus on overall health and wellness. And Duncan Donuts is dropping the donuts. Starting in January, the company will officially be called Duncan. I'm not sure how to feel about any of us. Are you kidding me? I love Duncan, guy.

Duncan sounds good. WW is hard to say. The URL sounds terrible. www. www. www.com? See, that actually works, whereas duncan.com belongs to a small consulting firm in San Jose, California. Not for long, right? And by, probably not a coincidence, Duncan just opened their first location in San Jose in July. What if they just went with W squared?

I mean, maybe that's a bit more catchy. W2. It would look like. It would look like W2. Yeah, but then everybody gets all bummed at because no one likes taxes. And by the way, to go back to Michael Coors, Capriholdings.com does not not to appear to be a working URL either. They need to get on that.

Let's go to our man behind the glass, Steve, Broido. Steve, of these three rebrandings, is there one you're particularly excited about? I don't think so. No, I mean, Duncan, I guess, moving away from donuts probably makes sense because they do sell more than just donuts. So I guess that makes the most sense. I don't know. Duncan just sounds very royal. I mean, to that point with Duncan, though, remember Domino's was very successful with that transition, right?

went from Domino's Pizza to simply Domino's, and that's worked out pretty well for him. Not to mention that Papa John's just continues to step in it on a daily basis. All right, guys, we'll see you later in the show. Up next, we're heading to Silicon Valley for a conversation with best-selling author, Brad Stone. Stay right here. This is Motley Fool Money. Welcome back to Motley Full Money. I'm Chris Hill.

Brad Stone is the senior executive editor of Bloomberg Technology and the best-selling author of The Everything Store and the Upstarts. and he joins me now from Bloomberg's offices in San Francisco. Brad, welcome back. Hi, Chris. Thank you. Let's start with upstarts. The news this week that J.P. Morgan looks like they're going to be running point on Lyft's IPO, and both Lyft and Uber are expected to IPO next year. How do you see that race right now?

I mean, is it a race? You know, one thing that we've learned about this market, the ride share, market in a variety of, you know, cities around the world is that there are room for, for more than one player. You know, I just actually came from a trip in India, you know, where OLA, you know, the local startup is leading the market, but, you know, happily and successfully took Uber's around as well. So it's not winner take all, and the companies are on very different timelines. You know, Lyft, according to some reports that came out this week, is looking at more the beginning of the year, March or April. You mentioned like JP,

Morgan and Credit Suisse, investment banks who are already talking to lift about that role of lead underwriter. And then, you know, Uber seems like it's on a slower track. Darra, the CEO, has talked about late 2019. Of course, Uber has raised a lot more capital, probably got a higher burn rate. But, you know, he has set about now in his tenure, you know, reducing that burn rate, getting out of markets like, you know, where they just weren't competing like Southeast Asia and Russia, you know, trying to write the show. in terms of company culture and the driverless car initiative. So I don't know.

I mean, it's going to be an interesting year if they both go public. But at this point, even though the companies, particularly Uber, have had bumps in the road, I don't think you can dismiss the fact that this is a big market that both companies are doing very well in. We've seen recently the IPO market get a little frothy with companies like SurveyMonkey and Eventbrite having these big opening days. Does any of that cause any of the people that you've talked to at Uber and Lyft to want to move up the timeline a little bit? I haven't heard that. I mean, I think there is a sense that, you know, these management teams had their kind of work cut out for them in getting the numbers, making the numbers palatable, filling out the management teams. You know, and here's where I'm sort of losing track of things.

but like this Uber, has Uber hired a CFO? I can't quite recall where they did. They did earlier in the year. That's right. But, you know, but that's relatively recent. That's 2018. Like, they had a lot of work to do, and they still do. And so, no, I don't think that's the current environment.

And look, the economy is doing very well. These companies have raised a lot of money. Nothing, you know, sources of private capital have not dried up in Silicon Valley. You know, Masa Yoshi's son from SoftBank just told my colleagues at Bloomberg today that he's hoping to raise a kind of vision fund every few years. And so I think there's probably faith that the market will remain receptive as receptive next year as this year. Let's move over to Facebook and one of the crown jewels of the business being Instagram. This week, the founders of Instagram, Kevin Sistram and Mike Krieger left Facebook. and they had reportedly grown frustrated with Mark Zuckerberg's increased involvement in the overall direction of Facebook's brand.

And I'm curious what you make of two pretty high-profile departures. Yeah. Well, first of all, you know, let me just say that it's really unusual for startup founders to remain at their companies as long as Sistram and Krieger have at Facebook. You know, Instagram was acquired by Facebook in 2012. So the fact that we're still talking about this six years later is kind of amazing to me. I know that's maybe a little too soft on Facebook because it was a terrible time for this to happen. It kind of an unexpected way that it did. I think, look, I think it's a blow for Facebook because what the founders of a company like Instagram do is they preserve the spirit of it.

They preserve the sanctity of the user experience. clearly the tensions were around, you know, Mark wanting to bring it closer into the Facebook portfolio to monetize it more to make the mechanics of photo sharing more viral. These are things that Krieger and Sistram tried to resist and probably ultimately got frustrated with. And look, it's just a terrible time for Facebook. You know, all the criticism about their stewardship of user data, you know, the slowdown in parts of the business, the issue of fake news and Facebook, you know, doing a poor job of safeguarding against extremist or hateful content in countries around the world. It's another blow in a year for Mark Zuckerberg. It's been pretty unrelenting.

Do you think that narrative, and I'm speaking of the narrative of Facebook makes an acquisition and at some point the people involved in the acquisition leave and they leave in a way that's not very close? quiet. Do you think that narrative hurts Facebook's chances for future acquisitions? Because if I was involved in acquisitions at a company like Alphabet, I would absolutely be using this narrative against Facebook. Well, I mean, I think Google doesn't have a much better record. I mean, you know, you look at you, and this is the point I was making earlier. You know, you look at companies like Double Click or YouTube. Those founders left fairly early on. So, I mean, if anything, you know, Facebook's done a better job of hanging on entrepreneurial talent. But then you've got, in the same week that the Instagram guys left,

you've got Jan Coom, the founder of WhatsApp, talking to Forbes about, you know, the basically with some enmity about leaving Facebook and feeling like it was a poor steward for WhatsApp's principles. At the same time, all these entrepreneurs got extremely wealthy Facebook's acquisition. So I don't know that hurt their potential for M&A in the future. You know, the thing that probably hurts the potential for M&A is not a reputation as a bad acquire. It's the fact that big tech right now is so scrutinized and being regarded so skeptically that, you know, a lot of people think that Facebook couldn't go out and buy an Instagram today, that, you know,

regulatory authorities wouldn't allow it. I think that's the bigger issue facing these companies, you know, if they were to go out and to buy a, you know, big, big company, it might not pass through antitrust scrutiny. Amazon continues to innovate, and amazingly enough, the recent coverage of Amazon's innovations are about actually retail, because a lot of the innovations have very little to do with retail. But let's start with Thursday, Amazon opening Amazon 4-star, which is a physical store in the Soho section of New York City. do you think that portends a wave of similar stores across the company or across the country? Or do you think that that's just an interesting test for that? Well, I mean, let's, you know, we can joke, but does Amazon ever do just one of anything?

Does it ever do anything small? I mean, I think it's clearly a format that they are trying out here in Soho, probably with a mind toward expanding it. as they are expanding the bookstores, the ghost stores, the different supermarket formats, and of course, Whole Foods. So, no, I mean, I think there was a realization a few years ago at Amazon that to continue to grow as fast as it has, they would need to tap that percentage of shoppers that aren't comfortable transacting only online. They probably also realize through experimenting with things like pop-up stores, you know,

that these stores, they might profess to sell books or, you know, four-star rated colory, but what they're really doing is advertising Amazon. These are, these are, you know, big, bold billboards for Amazon Prime, for, you know, for all of Amazon devices, fire TV sticks and fire tablets and Alexa devices. You know, you can almost joke that a lot of the four-star reviewed stuff is kind of window dressing, and what Amazon is really selling in that store in Soho is Amazon. And yes, I expect they're going to have a lot more over the next months and years. So the recent Bloomberg story about Amazon considering opening up 3,000 stores, cashierless stores, by the way, in the next three years, do you think that's what we're going to be seeing?

Yeah, I mean, I think that we're already seeing a kind of rapid rollout here, or an increasingly fast rollout of the Go concept. You know, I don't know about 3,000, you know, that seems pretty aggressive, but, you know, when you let your mind wander, you know, when Amazon really starts to kind of accelerate on this thing, you know, do we see standalone lunch stores downtown? Do we see whole food stores that, you know, two-thirds of the store are conventional with cashiers? But then there's a separate entrance for the kind of a prepared food section, and Amazon Go technology allows you to grab something quickly and walk out. you know, maybe there's a Go component to these four-star stores or Amazon bookstores. So, you know, I said at the end of my book, the everything store, I said the answer to every possible question with Amazon is always yes. You know, until like the narrative changes and investors, you know, demand that the successor to Jeff Bezos one day far in the future, it's showing more of a profit, I think the company is going to keep like doing these things, tweaking them, experimenting with them, and then rolling them out pretty rapidly. So, yeah, I mean, I think,

I think 3,000 stores, Amazon stores of some kind, is probably a pretty good bit. It's the second company to hit $1 trillion in market cap. What, if anything, has surprised you about Amazon's growth? I mean, the rate of acceleration is certainly extraordinary, like a 4x or a 5x over the past few years. And I think, you know, just sort of like dawning awareness that this company is set up to succeed far in the future, maybe a little bit of over exuberance because that multiple is pretty high. But what surprised me, what's something I couldn't anticipate when I finished the book now

almost five years ago is that Amazon would invent a new computing platform in Alexa, you know, that they would, even after kind of limping along with groceries, that they would invest so heavily and acquire whole foods. And in countries like India, where, you know, there isn't really an apparent path to profitability. It's like misery and losses. As far as the I can see, they continue to like push ahead for the long term because they believe, they look at the numbers and they believe like this is, you know, a billion people online at some point in the future and they just want to be there when that happened. So, you know, they're losing a lot of money in countries like India, but, you know, the extent to which Bezos has just like, you know, just determined and

views all these things on a long-term time horizon, you know, is surprising. I mean, it's something I guess I understood, but now we're seeing it really. played out in the marketplace. On last week's show, I talked with Ashley Vance. He said the possibility of Elon Musk leaving Tesla to run SpaceX full-time is a story that really doesn't get enough attention. And he went on to make the point that Tesla was foisted upon Musk, whereas SpaceX is his baby. Jeff Bezos founded Blue Origin, the Space Exploration Company, back in 2000.

And how do you think Bezos balances Blue Origin and Amazon from this point on? Is Amazon always going to be his primary focus? Yeah, let me just say, you know, we're talking on a day when the SEC just sued Elon Musk charging him with fraud over the funding secured tweets. So that might be a kind of clarifying moment for Elon as he has to contest with this, that, you know, he's taken on too much. He's pressed himself to the limit, and it ended up being destructive. at least in the way he has managed Tesla over the last few months.

You know, Jeff is someone who seems to have balanced it a lot better. First of all, unlike Elon, who these are like kind of twin children that he had the portion of his time on, Amazon has always been, you know, the first child for Jeff. He's at least four days a week there. You know, I see him there for many years, of not decades. and Blue Origin is a cross between a sort of philanthropic initiative and a hobby and a passion project. He's not an active leader there.

He's got a management team. And it's something where he thinks he's one of the ways he's making a really big long-term contribution because he sees it as the future of humanity. But I don't see it. I don't think it's as likely him doing what Ashley predicted for Elon, which is stepping away from Amazon to do Blue Origin. I think he views his work at Amazon is not done and is as actively involved there, according to what I hear, as he has always been. Last question, and then I'll let you go. Your most recent book is about upstart companies.

What is one upstart company that's on your radar right now that a lot of people haven't really heard of? Yeah, so yeah, the upstarts was throughout that generation of companies that emerged in the late 2000s. along with Uber and Airbnb and Lyft to kind of change transportation. You know, the one that I get, I feel like the transportation revolution is still happening right now, and there's just a lot of exciting things going on in areas like autonomous cars. My geeky passion, something that Ashley and I have written a little bit about are these autonomous personal aircraft projects, and Larry Page has one. He's actually invested in three, but there's one called,

it's actually called Kitty Hawk that I just love following the progress of. It's developing not only like a personal recreational flyer that you kind of take out over a lake, but I think it's a two or four-seat aircraft that revokes sci-fi fantasies like Blade Runner, but these are electric, you know, bypass congestion. It really with the potential to revolutionize transportation,

and not just in the U.S., but in third world countries, they're testing it in New Zealand. I don't know. I mean, some people think that's pretty far out, and a lot of needs to happen in terms of airline infrastructure, airports, you know, regulation. But, you know, it's like, you know, these entrepreneurs, like Larry Page, are still dreaming big, and I think that's inspiring. You can pick up a copy of the upstarts or the Everything Store wherever books are sold.

And if you want the latest in technology, Brad Stone is a great point. person to follow on Twitter. Brad, always great talking with you. All right. Thank you. Bye. Up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. All right, before we get the stocks on our radar, quick thanks to Harry's. I love Harry's. I've been a customer of Harry's for years. Long before they started sponsoring Motley Fool Money, I was a customer of Harry's. Harry stands behind the quality of their blades, but they know. Switching razors, not an easy decision. So that's why Harry's created a try-and- offer, and you can claim yours by going to harries.com slash fool. You got one face, guys. You got one

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buy ourselves stocks based solely on what you're here. Welcome back to Motley Fool Money, Chris Hill, here in studio with Jason Moser, David Kretzman, and Seth Jason. You can check out past episodes of this show and all of the Motley Fool's podcast. Just go to podcast.com. And next week, yes, we will be celebrating our 500th episode of this show. Nice. Getting up there in years. All right, let's get to the stocks on our radar and our man behind the glass. Steve Brodo is going to hit you with a question. Jason Moser, you're up first. What are looking at? Yeah, taking a look at Sirius X-M, ticker S-I-R-I, the news out this week that they are going to acquire Pandora. I really wouldn't have looked at even one of these companies

individually. But the acquisition here, the two together, seems a bit more. more compelling. It's going to give them the opportunity to develop a few different things here. Number one, really an ad-based serious product to take advantage of what they see as a fleet of around 200 million vehicles in the coming decade that's going to have that serious interface. Given they've already got the satellites in there, this could be sort of the terrestrial radio of the 21st century, really. I like the idea here, the 4A into podcast. I think they're going to hit them with the hind. Steve Brodo, question about Sirius XM? So I'm a shareholder. Does this replace the app, you think, Jason?

No, I don't think it replaces the app. I think it really gives them the opportunity to reach out of the vehicle, certainly with Pandora. But I think the most compelling part of it is the ad-based series product that sounds like it's in the works. Seth, Jason, what are you looking at this week? Stock on my radar, I'm worried is going to crash, actually. It's been on the way down for a while. Thor Industries, RV maker, Airstream, all sorts of different products. we had a huge, long upcycle in RV sales. Millennials were buying them. Everyone was buying them.

And now suddenly the sales are slowing down, and it's allegedly just an inventory adjustment at dealers. We've had a couple of quarters of this. I wonder if it's not something worse. And I think next quarter is the make or break for not only Thor, but peers like Winnebago and retailers like camping world. And the ticker symbol? THO for Thor.

Steve? Is there a movement you think with people living full-time in their RVs. You see more about that these days. I don't know if there's such a movement of that, but there's definitely a lot of the recent growth was selling cheaper units to younger people. David Krenzman, what are you looking at this week? I'm looking at Stance.com, ticker STMP. They are a provider of multiple software solutions for mailing and shipping. So they're benefiting from the rise of e-commerce and the subsequent increase in the number of packages that are being shipped. They're a multi-carrier solution, so you can select postage from USPS, FedEx, UPS, DHS, and all sorts of different providers.

Growing revenue at a 20% plus clip, and they're in the early stages of expanding internationally in Canada and Europe. And the valuation looks pretty compelling as well for a company growing this fast and this profitably. Steve, question about stamps.com? We were talking about URLs earlier. Do you think they should win just because they bought stamps.com? It seems like success right there. Early winner from the 90s. Absolutely. I think they deserve props for that.

Steve, three very different stocks. You've got one you want to add to your watch list? Well, I love Sirius. I'm a shareholder, so I'm going with Sirius. All right. Jason Moser, Seth, Jason, David Cresman. Guys, thanks for being here. Thank you. That's going to do it for this week's edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Mack Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.