Elon Musk's "Getting into Politics" Again

A lot of people are asking me about,

"Hey Kevin, what do you think about this

new SpaceX risk disclosure that Elon may

have uh potential involvement with

politics in the future?" Okay, this is

something that you have to know about

risk disclosures with this whole SpaceX

Elon Musk thing is first of all, I think

the media is totally misleading people

on this. Like the headline here is

SpaceX warns investor Elon Musk could

return to US politics. Bloomberg reports

this is total fear-mongering to suggest

that oh Elon's going to come back

somehow like he's going to you know run

for president or whatever is the

implication here right we know he was

born in South Africa uh with uh with

Obama I mean um with with others and uh

what's what's I guess was Kenya actually

the joke didn't work anyway um but um

what what we ought to know here is any

company that you look at any company

that you look at a 10K form is going to

have an extreme list of risk factors and

they are designed to be CYA. I've worked

with attorneys for a long time on

crafting risk disclosures and what to

mention what you pretty much the way you

have to look at it is anything that

possibly could happen you want to be

able to point to and say we told you

that's the whole point of risk

disclosures. So this update to risk

disclosures that hey you know Elon's

exposed to things like department of

governmental efficiency that means some

of his time could be spent over there

which could be a distraction. The whole

point is really for them to say like if

you sue us in the future because you're

mad that Elon is somewhat you know even

talking to somebody related to politics

and all of a sudden that led us to lose

a contract. We told you you know

politics could lead that to happen.

That's what it is. I see it more as a

CYA than I see it as a an indicator.

Like I don't think a risk disclosure is

a leading indicator that somebody's

going to do something. In fact, if you

look at, for example, like the House

hack, uh risk disclosures, they say

things like, uh, hey, Kevin ran for

governor in the past, he could run

again. Politics could positively or

negatively affect a company. This is a

risk. Like those are things you put in

there. And so somebody like this this

same headline would be just like

somebody making an article going Kevin

put in the house hack risk disclosures

that that he could run for governor and

then they run the headline. Kevin's

running for governor. It's like no

we're we're not. That's not the plan. Uh

and uh uh yeah. Is that a risk

disclosure? Of course. Because you know

what if you wake up in three weeks and

you change your mind, right? So that the

point of this is really just to say

though a risk disclosure is a really bad

leading indicator of what a company

wants to do and it's much more of a CYA

tool uh than anything else. And again

you could look at this at any company.

So go to like investor relations. Let's

just pick a big one. Go to investor

relations Nvidia. Go to uh you need to

get an annual report. So, let's grab an

annual here for I just grabbed their

last annual report, their fiscal 25. You

got to get past all their marketing

and then you got to get to uh it's

usually under Oh, okay. Well, here's

more of their business overview

marketing, proposals, and all this good

stuff. There's a whole section for risk

factors. My goodness, this is all

information about the company. But

anyway, once you get into the risk

factors, some of the things you'll see

are just like crazy and and like silly.

Uh but it's very very normal. Uh again,

attorneys crafting this stuff. These are

all proposals for voting. Fine. Here we

go. Here's the business. This is where

they make money, how they make money,

what their goals are. Usually, right

after that, you have risk factors. Here

you go. Risk factors. So, they give them

to you in two ways. First they give you

a summary of risk factors and then they

actually go into them in detail and so

you'll see a whole variety of things

here. Let's just look at them. Uh

adversarial economic conditions uh

business disruptions that Okay, these

summaries are just such catch alls.

Let's just scroll to one over here.

Let's go to what do we got over here?

Um,

uh, Delaware law and certificate

incorporation agreement with Microsoft

could delay like what is this?

Anti-takeover provisions of the Delaware

general corporate law may discourage,

delay, or prevent change of control. The

most random stuff you get into some of

these. We have exposure to tax

liabilities. No freaking duh. We're

subject to stringent and changing

privacy and security laws. Okay.

actions to adequately protect our IP

could result in substantial costs. Like

if we sue somebody because somebody's

leaking our stuff, that could cost us a

lot of money. Duh. But they have to say

that because what if some shareholder

gets pissed that they spent a bunch of

money on legal expenses, right?

Uh so here, what's uh what is this? This

looks these are all export controls. Uh

whatever. So you kind of get the idea.

Look at this. Climate change may have a

long-term impact to our business.

Climate change may increasingly have an

adverse impact on our business and our

customers. Water and energy availability

and reliability where we conduct

business is critical. Climate change.

Okay. Stakeholder groups may find us

insufficiently responsive to implication

to the implications of climate change.

So, in other words, people might sue us

because of like our involvement in

affecting the environment or our ability

to respond to changes. Even this some of

this stuff is just so crazy. Like, who

reads this stuff? Nobody.

Like, again, it's it's there for these

companies to go, "Told you so." Uh, and

I think as a result of us having now

appropriately covered this, the cues are

now rocketing.

Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Pra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.