4 ms·

There's also the obvious conflict of interest. How does that get resolved?

djbusby 2y ago
Maybe compare the spend to other channels? If it's significant difference then it's a problem? If all online channels are 200k and Twitter is one of 12 well, NBD.
- jojobas 2y ago
  Spend in other channels would be irrelevant. Fair pricing is the only thing I can think of.
uhohspaghetti 2y ago
[dead]
rapsey 2y ago
Is this a moral or legal code that is being broken somehow? Because he owns both companies it is somehow immoral to do business between them?
- tayo42 2y ago
  no, but there is potential so its probably better off not doing it. but this sounds pretty low for a major company's advertising budget and pretty low in relative amounts to be worth risking doing corrupt things.
- ipv6ipv4 2y ago
  Tesla is a publicly traded company with shareholders. Twitter is Musk’s private plaything. Tesla using Twitter services could be a conflict of interest because Musk is CEO of both and could be using his position at Tesla to funnel public shareholder money into Twitter, aka his pocket.
- nrb 2y ago
  Other shareholders of the companies might bring up conflict of interest concerns, if the deal is lopsided one way or the other. Theoretically it is a way to siphon funds from one company to the other if he forced one of his companies to take a raw deal from the other. If both sides got a fair deal, it’s probably not much to worry about though.
- fblp 2y ago
  He actually doesn't own both companies. He largely owns X which is a private entity. He owns ~20% of Tesla, and the rest is owned by other shareholders. As a company officer he has a fiduciary duty to act in the interests of all Tesla shareholders, and any sales or deals to other entities he has in an interest in pose a conflict. That conflict can often be mitigated by oversight or deferral of decision making to parties that don't hold the conflict such as other board members or corporate officers.
- hackerlight 2y ago
  He owns a fraction of Tesla and a much larger fraction of X, so there's a financial incentive to pump money and reputation from the former to the latter.
lylejantzi3rd 2y ago
There is no conflict of interest. Companies do this all the time. It's even considered a good thing in business circles. If you want preferential treatment, pricing, or scheduling, then buying the company is a great way to get it. Businesses call it "synergy."
- nmfisher 2y ago
  Tesla doesn't own X/Twitter though. Elon does. If I were a Tesla shareholder, I'd be mildly[0] irritated that Elon feels it's OK to take money out of "our" company to spend it on "his" company, even if there is some nominal benefit. [0] the amounts are so tiny, I wouldn't really care. I'd be more angry that he thinks he can reasonably function as a full-time CEO for Tesla while gallivanting about with his other ventures.
  - lylejantzi3rd 2y ago
    Have you ever worked for a company that bought a software package that was so bad, you thought "who on earth would actually choose to buy this?" Chances are, the decision maker owns part of that company. It's considered a value-add because that said decision maker can put pressure on that company to make changes they want made, where if they went with another company they wouldn't have that inside leverage.
    - pjerem 2y ago
      TIL that I must know a lot of people owning ATLASSIAN stocks.
    - datascienced 2y ago
      To what extent is marketing via shareholders viable. Let’s say company does $1bn a year, and my decision adds $1m/y revenue (0.1%) and my share holding is 0.1% and worth $10m. This has made me $10k. Not insignificant but a person making that decision $10k bribe to make a suboptimal decision is bad value. Especially when it is not clear it happened due to volatility. The real reason they may do it is favour for favours.
  - 2y ago
devjab 2y ago
It’s a pretty common practice. Microsoft spend 10 billion on OpenAI, but how much of that do you think makes it back into Microsoft through the Azure compute time OpenAI buys? I think a lot of people who haven’t been involved with business laws (not sure what the correct English term would be) would genuinely be surprised with just how much you can do. I work in an investment bank, we manage around 1100 companies which are in reality investment projects. A couple of these are tied directly to ourself, so that we have a top shell company which owns the actual companies. One is an employee shell company which allows our employees to spend 14,5% of their yearly income on company shares, before taxes. Up to a certain amount of these can be sold at a 25% tax rate, it’s around $9000 a year that can be earned at a tax rate which is around 20% lower than the normal income tax rate ours employees pay. It also deducts from the amount of money they can earn before every thing they earn above that rate is taxed at almost 60%. On top of this, if they are married they can also use the $9000 of their spouse (if their spouse isn’t doing similar) and another $9000 for their household, because well, because the people who write/lobby these things are good at what they do. Anyway… it’s perfectly legal, even here in Scandinavia, and it’s maybe something 99% of our population has no idea exists. And that’s just for employee benefits. You wouldn’t believe the stuff we do with our investment projects. I’m not going to tell you any of the current things, but at one point our government wanted to promote small businesses and made <=10 owner companies almost tax-exempt. Meaning that a good deal of our still running projects pay almost no tax on the revenue they generate. Including when a project is eventually sold, even though the law has since been rectified so that it’s impossible to do this for new companies and there is a grace period for when it ends for existing companies. I square it with my personal morals because every project is either a solar park that was build or a solar park that was bought and renovated to be capable of running another 25-50 years instead of being scrapped. But on a whole… it’s just so ridiculous compared to what “regular” people do. Like… a Danish Nurse in the public sector (and honestly in virtually every private hospital/company) has none of these benefits. Often because even business owners outside of finance (or companies large enough to have big legal departments) has no clues these things exist. But in terms of income, our legal department sometimes generate almost as much revenue as our sales department now that we have as many projects as we do around the globe.

Maybe compare the spend to other channels? If it's significant difference then it's a problem? If all online channels are 200k and Twitter is one of 12 well, NBD.

jojobas 2y ago
Spend in other channels would be irrelevant. Fair pricing is the only thing I can think of.

uhohspaghetti 2y ago

[dead]

rapsey 2y ago

Is this a moral or legal code that is being broken somehow? Because he owns both companies it is somehow immoral to do business between them?

tayo42 2y ago
no, but there is potential so its probably better off not doing it. but this sounds pretty low for a major company's advertising budget and pretty low in relative amounts to be worth risking doing corrupt things.
ipv6ipv4 2y ago
Tesla is a publicly traded company with shareholders. Twitter is Musk’s private plaything. Tesla using Twitter services could be a conflict of interest because Musk is CEO of both and could be using his position at Tesla to funnel public shareholder money into Twitter, aka his pocket.
nrb 2y ago
Other shareholders of the companies might bring up conflict of interest concerns, if the deal is lopsided one way or the other. Theoretically it is a way to siphon funds from one company to the other if he forced one of his companies to take a raw deal from the other. If both sides got a fair deal, it’s probably not much to worry about though.
fblp 2y ago
He actually doesn't own both companies. He largely owns X which is a private entity. He owns ~20% of Tesla, and the rest is owned by other shareholders. As a company officer he has a fiduciary duty to act in the interests of all Tesla shareholders, and any sales or deals to other entities he has in an interest in pose a conflict. That conflict can often be mitigated by oversight or deferral of decision making to parties that don't hold the conflict such as other board members or corporate officers.
hackerlight 2y ago
He owns a fraction of Tesla and a much larger fraction of X, so there's a financial incentive to pump money and reputation from the former to the latter.

lylejantzi3rd 2y ago

There is no conflict of interest. Companies do this all the time. It's even considered a good thing in business circles. If you want preferential treatment, pricing, or scheduling, then buying the company is a great way to get it. Businesses call it "synergy."

nmfisher 2y ago
Tesla doesn't own X/Twitter though. Elon does. If I were a Tesla shareholder, I'd be mildly[0] irritated that Elon feels it's OK to take money out of "our" company to spend it on "his" company, even if there is some nominal benefit. [0] the amounts are so tiny, I wouldn't really care. I'd be more angry that he thinks he can reasonably function as a full-time CEO for Tesla while gallivanting about with his other ventures.
- lylejantzi3rd 2y ago
  Have you ever worked for a company that bought a software package that was so bad, you thought "who on earth would actually choose to buy this?" Chances are, the decision maker owns part of that company. It's considered a value-add because that said decision maker can put pressure on that company to make changes they want made, where if they went with another company they wouldn't have that inside leverage.
  - pjerem 2y ago
    TIL that I must know a lot of people owning ATLASSIAN stocks.
  - datascienced 2y ago
    To what extent is marketing via shareholders viable. Let’s say company does $1bn a year, and my decision adds $1m/y revenue (0.1%) and my share holding is 0.1% and worth $10m. This has made me $10k. Not insignificant but a person making that decision $10k bribe to make a suboptimal decision is bad value. Especially when it is not clear it happened due to volatility. The real reason they may do it is favour for favours.
- 2y ago

devjab 2y ago

It’s a pretty common practice. Microsoft spend 10 billion on OpenAI, but how much of that do you think makes it back into Microsoft through the Azure compute time OpenAI buys? I think a lot of people who haven’t been involved with business laws (not sure what the correct English term would be) would genuinely be surprised with just how much you can do. I work in an investment bank, we manage around 1100 companies which are in reality investment projects. A couple of these are tied directly to ourself, so that we have a top shell company which owns the actual companies. One is an employee shell company which allows our employees to spend 14,5% of their yearly income on company shares, before taxes. Up to a certain amount of these can be sold at a 25% tax rate, it’s around $9000 a year that can be earned at a tax rate which is around 20% lower than the normal income tax rate ours employees pay. It also deducts from the amount of money they can earn before every thing they earn above that rate is taxed at almost 60%. On top of this, if they are married they can also use the $9000 of their spouse (if their spouse isn’t doing similar) and another $9000 for their household, because well, because the people who write/lobby these things are good at what they do. Anyway… it’s perfectly legal, even here in Scandinavia, and it’s maybe something 99% of our population has no idea exists. And that’s just for employee benefits. You wouldn’t believe the stuff we do with our investment projects. I’m not going to tell you any of the current things, but at one point our government wanted to promote small businesses and made <=10 owner companies almost tax-exempt. Meaning that a good deal of our still running projects pay almost no tax on the revenue they generate. Including when a project is eventually sold, even though the law has since been rectified so that it’s impossible to do this for new companies and there is a grace period for when it ends for existing companies. I square it with my personal morals because every project is either a solar park that was build or a solar park that was bought and renovated to be capable of running another 25-50 years instead of being scrapped. But on a whole… it’s just so ridiculous compared to what “regular” people do. Like… a Danish Nurse in the public sector (and honestly in virtually every private hospital/company) has none of these benefits. Often because even business owners outside of finance (or companies large enough to have big legal departments) has no clues these things exist. But in terms of income, our legal department sometimes generate almost as much revenue as our sales department now that we have as many projects as we do around the globe.