Everyone's Watching NFLX, and Elon Says "Funding Secured"

Kara Swisher: Not all journalism is the same. Take The Guardian. Our coverage has something unique. Fierce independence. Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe. Expose corruption wherever we find it. And give fresh perspective on everything. From wellness and soccer to culture, the climate and more. Read, watch and listen to The Guardian for free at theguardian.com.

Kara Swisher: Avoiding your unfinished home projects because you're not sure where to start? Thumbtack knows homes, so you don't have to. Don't know the difference between matte paint finish and satin? Or what that clunking sound from your dryer is? With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top-rated pros, see price estimates, and read reviews all on the app. Download today.

Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: How was your 420, I guess? That's the question of the day.

Scott Galloway: How was 420? Actually, I haven't been indulging as much recently. I don't know what it is. I think I'm aging out of that stuff. Getting old, Kara.

Kara Swisher: Are you feeling old? You're feeling a little slow there today.

Scott Galloway: I think it's something to do with Easter and the rebirth. What is Easter? No, it's not the birth of Christ. It's the rising. Anyways, my Easter joke. What did the plain egg say to the painted Easter egg?

Kara Swisher: What?

Scott Galloway: You whore.

Kara Swisher: All right. I had dinner with my brother. He had a whole series of dad jokes. And he bests you. At some point, we have them on here. And you can dad joke each other back and forth. I think that the entire show will be dad jokes.

Scott Galloway: Is this the brother we don't talk about, or is this Jeffrey?

Kara Swisher: Jeffrey.

Scott Galloway: Jeffrey. The brother we don't talk about doesn't talk on the air ever. He lives up in northeast Pennsylvania, and he never comes out of his house, essentially.

Kara Swisher: No, he does. He plays golf, and he runs our family's country. He's the one running the family coal business, right?

Scott Galloway: Yeah.

Kara Swisher: Yeah, he just has no time for any of this. Fall to roll, let's just say. Jeffrey Swisher loves it. David Swisher, not so much. Anyway, he's probably the smartest one of all.

Scott Galloway: You didn't ask where I am.

Kara Swisher: Where are you?

Scott Galloway: I was in Los Angeles yesterday visiting my high school, which was fun.

Kara Swisher: Oh, wow.

Scott Galloway: Oh, dear. Yeah, where they had a drum line and cheerleaders. And I got to speak to the leadership class and did an assembly with all these kids asking me questions. It all were basically like, how do I get rich too? And that was really rewarding and strange and emotional at the same time. I know you're concerned about me, but I'm okay.

Kara Swisher: Wow. And now I'm down in San Diego.

Scott Galloway: Oh, we're near each other. I'm in Palm Springs.

Kara Swisher: Really? Yeah. Huh. There you are. Just a hop, skip, and a jump.

Scott Galloway: Yeah. I'm in San Diego. And what are you doing there?

Kara Swisher: I'm going to see my dad, and I'm also going to speak at the meeting of a company called Listrack, which is a cool e-commerce software company.

Scott Galloway: So neat. Here ringing the register, Kara. Here, you know, paying the rent.

Kara Swisher: Good for you. Girls gotta eat. Girls gotta eat. Yeah. Also, I saw George Hahn on your show. That was really good.

Scott Galloway: That was really nice. Did you like my joke? You said that the two of you should get together.

Kara Swisher: Yeah.

Scott Galloway: And I said, oh, my God, I'm being groomed. You're grooming me.

Kara Swisher: God. And it's working. Anyway, what Scott's referring to is this heinous way that people on the right or anyone who opposes their shitty, anti-trans bills are groomers. And they can, as you said, I mean, how can I put this delicately? They can go fuck themselves.

Kara Swisher: Anyway, today we'll talk about Netflix stock slide, what the market may be missing here. Also, Elon's raising funds for his Twitter bid. We'll see who wants to pay for this wild ride, Mr. Toad's wild ride. And we'll hear from a listener with a question about the future of aging. Scott, that's perfect. But first, air travelers can eat stale cookies faster now. A federal judge overturned the CDC's mask mandate on flights and other transit. The reversal prompted cheers among some travelers and flight crews. Of course it did. But it's put the Biden administration in a bind as it weighs an appeal. The Justice Department has appealed the ruling after the CDC said the mandate remains necessary for public health. Fun fact, a Trump-appointed judge who issued the ruling was given a rating of not qualified by the American Bar Association when she was nominated in 2020, but she was confirmed anyway along party lines. So aside from that, the CDC doesn't want this. Some medical people don't want it. Others argue the point. What do you think? And the airlines have wanted this, by the way. This is something the airlines have wanted. So what do you think of this?

Scott Galloway: I think that the pandemic and viruses are incredibly complex. I think I came out of the gates one of these people that figured, oh, I'm smart, which makes me a junior epidemiologist. I find with things like advertising and food, people think, well, if I watch TV and I eat, I'm somewhat of an expert on advertising or branding or logos. And it feels if we all sort of think, oh, I get sick and I've read an article from The Economist forwarded to me two years ago, I sort of understand epidemiology. What I came to realize is that viruses in this pandemic are so incredibly complex. And so I defer to the CDC and I like the CDC. I like Dr. Fauci. I think he's been a great public servant. So my default, my go-to is to do what they suggest. At the same time, I feel with vaccinations, I'm now double boosted. I feel if people don't want to be boosted and take those kinds of risks, God be with you. And at some point, I do think we have to absorb some of the risks. Now, planes, what's interesting about planes is it feels like it would be the perfect environment for transmission. And what they have found, I believe, is that flight attendants have not contracted the virus at a greater rate than any other workers. Meaning that actually airplanes circulate air pretty quickly. It's airports. Is that right?

Kara Swisher: That makes sense. Yeah, that makes sense. I think airports are the danger. I think, at this point, there's such a tiredness on the behalf of the public that they've decided that the risk is worth it. And if they're vaccinated, especially if they're vaccinated, my heart goes out to immunocompromised people or people who really are worried. I'm flying and two people are like, you can take that off. And I said, you know what? I have a bad mom. I don't need a second one. Like, I'll do what I want. It's interesting. People are really saying to you, you can take that off?

Scott Galloway: Yeah, they always tell.

Kara Swisher: Well, I'm a lady. I don't know what to say. They really do tell me things. It's really weird. And I'm like, everyone do what they want, okay? Everyone do what they want here. That's what you really believe. I think a lot of people are going to be worried there's going to be an upsurge. This is an anecdotal thing, but they were wearing masks in my kid's school. Took them off, and the teacher got sick. And then 10 out of 12 kids got sick without masks. It was instant. It was fascinating. And they hadn't had incidents the entire year. So, who knows if that's the causation, but it's certainly immediately after they demasked, everybody got sick. Now, all the kids are fine. They got sick and it was inconvenient. And there was no serious thing, even though most of these kids were not vaccinated. The numbers for young kids are low. But anyway, it's just going to, we're moving toward the end of this. And I think that some people are very nervous. And wear your masks if you want to. I'm tired of arguing with people who don't want to wear them. And eventually some people get sick and some won't. But if you're vaccinated, you're in a much safer position. This is sort of the Jared Polis way of living from Colorado.

Kara Swisher: Anyway, in another thing that irks me more, Ron DeSantis wants to overthrow the Magic Kingdom. The Florida governor is still angry over Disney's opposition to the Don't Say Gay bill. He asked lawmakers to consider revoking the special tax district where Disney's theme parks live. The district allows Disney to oversee land use and environmental protections. It has its own board of supervisors and fire department. It's very old. It's back to the 1960s. This has always been sort of an interesting story that reporters dig into every now and then of Disney running its own country, essentially, inside of a country. But this is just silly on behalf of Ron DeSantis. He's just doing it for virtue signaling to his constituency. Disney's Florida's largest private employer. I'm not quite clear why poking them is a particularly good idea. And so the religious conservatives, of course, are pushing this imagined support of pedophilia. It's a canard. It's such nonsense. But I don't know. Is it hurtful to Disney's brand? They've been through this before.

Scott Galloway: Yeah, it is. And everything's been politicized. And I mean, what's next for DeSantis? He's going to weigh in on the Twitter Musk controversy. Oh, wait, he did.

Kara Swisher: He did. What did he say?

Scott Galloway: He thinks that Twitter shareholders are scared of free speech. It's like, oh, good. Everyone, I really want to know what Ron DeSantis thinks about Twitter, said no one. These individuals think. No one. I just think Trump has done so much lasting damage to the Commonwealth because everybody has decided just be incendiary and get in the news. And there will be some whack jobs who will pull out an envelope and send you money. And just the key is to be in the news, regardless of how ridiculous or off-profile or inappropriate it is for whatever it is, whatever the reason has landed you in the news. And DeSantis is just saying, hey, look at me. Now I'm going to go after Disney. Disney, I do feel, I quite frankly feel bad for Disney. Bob Chapek, quite frankly, he fucked up. And he's paying, in my opinion, a greater price relative to the offense. He screwed up. He apologized. He walked it back. And now everyone's decided to go after Disney. Now, there's bigger issues here, and that is large corporations are especially deft at extracting wealth from the Commonwealth in the form of the fact they don't pay taxes, where small businesses can't do the same, which puts them at a disadvantage. That's a longer conversation.

Kara Swisher: You are, in fact, a brand expert. What about the brand of Disney or the brand of DeSantis? Who wins here?

Scott Galloway: Oh, who wins here? No doubt is DeSantis. As much as you'd like to see him pay a price for being this political and short-term minded, everything he's doing, all he's doing is he's staring again at a mid-60s white evangelical person in Iowa who's going to show up with a straw for the Republican primary in Iowa. That is the only person he has his eyes on. But the Disney brand, yeah, in the short term, it's bad for them. But the Disney brand is arguably, when you look at assets, including its characters, when you look at its awareness, when you look at the execution around quality and focus on family fun, when you look at their ability to not only put out animation, the Mandalorian, great merchandise, and by the way the most incredible experience is for tourists that put you in the Matterhorn or in Cinderella Castle, I mean this is arguably one of the strongest, most multidimensional brands in the history of the consumer world. So this does not hurt them long term.

Kara Swisher: One thing that I think this is all going to pass, because there's a spate of Marvel movies coming out soon, and everyone's going to be focused on those. And Ron DeSantis will use it as a technique, as you said. But Disney has a lot of stuff coming up. I think their big challenge always is the streaming issues and growth. But these movies are coming out and they sound like they're pretty good. The Thor poster just went up. Natalie Portman looks fantastic with a hammer in her hand. There's all kinds of things. Ron DeSantis is whatever, Ron. Whatever, Ron. Good luck. Good luck in Iowa.

Kara Swisher: Let's get to our first big story. Netflix stock is scrolling down like it's looking for something to watch. That's funny from our producers. Its share price dropped more than 30% this week on the news that the service lost 200,000 subscribers in the first quarter. That's the first drop in global users in more than a decade. The war in Ukraine is partly to blame. Netflix says it's lost 700,000 users when it pulled out of Russia. But the company also predicts it will lose 2 million more subscribers this quarter. Reed Hastings said that a cheaper ad-supported plan is in the works, which he's never said. And it was also likely cracking down on password sharing, which people made fun of, but that's a good idea. So what's going wrong for Netflix? The competition plus inflation means consumers pay for fewer streaming services. A study in the UK found that over 1.5 million people canceled streaming subscriptions in the last quarter. HBO and HBO Max added 3 million subscribers last quarter. But there's all sorts of things going on. Scott, and people are going out again as COVID fears wane. People are traveling. People are everywhere. So what do you think of this?

Scott Galloway: It's really striking. Netflix was probably everyone's bet for who would join big tech in terms of market cap and dominance. And year to date, their stock is off two thirds. It's off 62%. I mean, that is really dramatic for a company like this. And a couple of things. You talked about brand and then we'll come back to the business. Sharing passwords, cracking down on that, that is low hanging fruit. They should absolutely do that. Great brands protect their IP. If they enforce that, it feels like it's, they used to do it for purposeful leakage to increase kind of almost like advertising and new business. They crack down on that. It makes sense. It's probably a 5, 10, maybe even a 15% revenue increase. The part that really puts the brand at risk and sort of a new Coke kind of brand risk complexion is advertising. And that is, I think core to Netflix's strategy and brand is that if, for example, if you only let your kids watch Netflix, they save, no joke, 11 days a year in advertising. And I think it's so core to their brand that you're going to get uninterrupted storytelling and you're never going to have to think, oh, wait, I'm being sold to, or how do I skip this? That I think it's a pretty big risk for them to actually introduce advertising in terms of what their brand means to people. People, when they think of Netflix, they think of a theater experience. They think of a storytelling experience. And I think key to that is I'm not going to be pelted with people telling me to get a reverse mortgage or a light beer or a South Korean car company or basically telling me all day long how it sucks to get old and I need to, these people doing the tango that have some terrible disease. So I think that when you're talking about brand risk, I think introducing advertising is something they need. I would test it in a small market and see what the perception of the brand is.

Kara Swisher: I'm going to go the opposite way on that one. I think it's fine. I think it's fine. I think he's signaling Wall Street and a lot of people can't afford Netflix and it's a way to do it. I think it makes them bigger. I have it on Hulu. I sometimes shift between my ad. I think I have ad on Hulu or not. Maybe my kids asked me to remove it. But I think it's fine. I don't think it's as big a deal as I think lots of other people do it. People are used to it. I would keep the non-advertising product because of that, because I'm used to it. But I think in gaining new users, I think it's fine. I don't feel like people are going to go crazy. Depending on the ads, if they're creative and interesting, they certainly have to care about it, they can't have shitty ads, that's for sure. But I don't know. One of the things that's interesting, if they hadn't exited Russia, it would have added subscribers, though it's far below the gains. And they're also doing really well overseas in Asia Pacific. They added a ton in India, which has tiered plans. And one of the things that's interesting is Parrot Analytics, the firm that measures entertainment demand, says Netflix is the single most dominant player in the streaming industry, especially in demand for original content. It also has big hits coming out this year, like A New Stranger Things, Knives Out 2, a new season of Squid Game is in the works. So again, I'm not that worried for them, but they definitely are now in a more competitive environment and have to do new, fresh things. And that's what I like about Reed Hastings. He's willing to change as he has over the many years.

Scott Galloway: Well, so the lesson here is that, what's wrong? Is it execution? No, Disney continues to just punch the lights out. I mean, they're just fantastic at what they do. They have built these huge entertainment complexes or content production complexes overseas that customize or regionalize content. They continue. They are amazing. This is just a straight lesson in economics, and that is $230 billion is going to pour into streaming video this year. And at some point, if everybody begins pouring capital into a sector, the returns drive down. If everyone is buying Florida real estate, at some point, it gets so overvalued that it's hard to get a return on it. And you have the mother of all .com Florida real estate overinvestment in streaming right now with $230 billion. So the competition here, I mean, basically Netflix had the field to themselves, and now the field is so crowded, you can barely move with capital. So it's just overinvested. But if there's one player that's going to kind of run through the tape or grow through the problems, it's Netflix. So it's actually becoming sort of interesting. If you look at it, it's still growing, still profitable, and the stock is off 62%. That's striking.

Kara Swisher: Yeah, it is. It is. One thing is that their big competitors are getting quite good, whether it's HBO Max, and that's going to be consolidating all their brands under one roof, I suspect. That's one of the things that David Zaslav has talked about a lot. So he's going to do it. And you've seen the stories about CNN Plus and the rest of them, the rest of the Warner Discovery. And Disney is obviously, they're not going to go whole hog, but they're real. And Hulu is going to be sucked up by someone. And as we talked about last year, consolidation is the name of the game. I think Netflix's problem is it doesn't have as much IP. They have some, but they don't have a lot. In fact, my son, who loves Netflix, Louis, was saying, oh, there's not really much on Netflix. And so he was going to Disney, right? Because there's a lot of stuff he can look at. And so he has a perception of that now. And I was like, well, look, there's Bridgerton. There's Anatomy of a Scandal, which was great. There's this. There's that. And he has that perception there's not a lot there, even though he didn't want to watch Bridgerton with his mother, obviously. But nonetheless, it was an interesting thing he said because he does love Netflix. But now he has choices. It's an amazing company. This space is overinvested. And the stock is paying the price right now.

Kara Swisher: All right. Scott, let's go on a quick break. When we come back, Elon Musk is fundraising. And we'll take a listener mail question about America's aging population.

Kara Swisher: Mint is still $15 a month for premium wireless. And if you haven't made the switch yet, here are 15 reasons why you should. One, it's $15 a month. Two, seriously, it's $15 a month. Three, no big contracts. Four, I use it. Five, my mom uses it. Are you playing me off? That's what's happening, right? Okay. Give it a try at mintmobile.com slash switch. Upfront payment of $45 for three-month plan, $15 per month equivalent required. New customer offer first three months only. Then full price plan options available. Taxes and fees extra. See mintmobile.com.

Kara Swisher: Support for Pivot comes from LinkedIn. From talking about sports, discussing the latest movies, everyone is looking for a real connection to the people around them. But it's not just person to person. It's the same connection that's needed in business. And it can be the hardest part about B2B marketing, finding the right people, making the right connections. But instead of spending hours and hours scavenging social media feeds, you can just tap LinkedIn ads to reach the right professionals. According to LinkedIn, they have grown to a network of over 1 billion professionals, making it stand apart from other ad buys. You can target your buyers by job title, industry, company roles, seniority, skills, and company revenue, giving you all the professionals you need to reach in one place. So you can stop wasting budget on the wrong audience and start targeting the right professionals only on LinkedIn ads. LinkedIn will even give you $100 credit on your next campaign so you can try it for yourself. Just go to linkedin.com slash pivotpod. That's linkedin.com slash pivotpod. Terms and conditions apply, only on LinkedIn ads.

Kara Swisher: Scott, we're back with our second big story. Elon Musk says he has funding secured in his bid for Twitter, something he said before. In the SEC filing revealed Thursday morning, Musk says he has more than $46 billion in financing. He's reportedly willing to put $15 billion of his own fortune at risk. Over $20 billion will come from Morgan Stanley. On Twitter, Musk has dropped ham-fisted hints he'll pursue a tender offer, love me tender. So this is the filing. He says he's done it. I assume his bankers would not say he didn't. But it's from Morgan Stanley, and some financiers have already told him no, Blackstone, Brookfield, Vista Equity. He could borrow against Tesla shares. Tesla stock dropped, though. I think the market does not love it. There's some things he could do with $15 billion. He could start his own social network, simply bribe the existing board members to vote his way. Bankroll politicians who will enact tech regulation he'd like to see and maybe even start a lithium mining company to help lower the price of electric car batteries. He's always tweeted about the price of lithium going up. Or buy No Mercy, No Malice and make a 22-minute Tesla ad every week with host Scott Galloway. That'll happen. That's definitely going to happen. So what do you think? He says he has the money and I would assume Morgan Stanley wouldn't back him in this way if he didn't, but it's not any big hedge funds yet.

Scott Galloway: So first off, you need to acknowledge, I don't know if you saw, I mean this is already bad for Tesla shareholders because it overshadowed what was just an incredible quarter for Tesla. They continue to defy gravity. They continue to deliver. They continue to figure out a way around supply chain issues that are plaguing the rest of the auto industry. Tesla is just the gift that keeps on giving and it's one of the few stocks he would describe as kind of this growthy crazy multiple stocks that hasn't been hit, it's at its near 52 week high. It's just his core business could not be stronger. I think all of this is going to be really bad for Twitter and I still don't believe the deal gets done. The poison pill is in place which means he has to do a tender now. A tender if he actually gets, if he were to actually buy more than 15%, even via tender, would trigger the poison pill. However, if he does a tender, which is he goes out to the shareholders and says, vote to say whether or not you would tender or offer up your shares at $54.50, if more than 50% say yes, then even though the board can technically block that transaction from taking place, they're essentially saying we know better than shareholders and they'll likely be swept out at the next annual meeting. It's too late to file for directors at this meeting in May, but it sends a very strong signal that this is what shareholders want. And as Bill Cohen deftly pointed out, a poison pill slows you down, but doesn't get in the way of an offer that shareholders want. What I think people are going to start doing the math around is what does it mean for Tesla shares when this guy has margined them, if Tesla were to take a big Netflix-like dump, if you will? And two, that $20 billion in financing from Morgan Stanley which is probably some sort of preferred or pick based construct where they don't pay cash out, they pay in shares or the debt continues to rack up. I would bet the interest rate on this debt is 10 or 12, meaning that any EBITDA, which wasn't a lot, gets soaked up and you have a private company where there's no vision. I think the employees are at risk. And this is a company that has to come up with $2 or $3 billion a year in debt payments. I think what this process has demonstrated to the market, Kara, is that this should be a public company because there isn't a source of financing that is cheap enough to match the public markets. And quite frankly, I think it sort of demonstrated to all of us, maybe Twitter's overvalued. That if no one can justify these prices in the private market with all the money in private equity, with all the money in hedge funds, maybe it really isn't a company that is worth this much. Anyways, what are your thoughts?

Kara Swisher: It's interesting. I'm sort of trying to digest this one. I'm wondering where the other money is, OPM, other people's money is here besides Morgan Stanley. And so it's all sort of, this is the quiet part of it, even though this has been a super loud situation. And so the question is who steps up with him in some way. You're right. The debt is enormous on this company. And so they've really got to turn it around. And one of the things, it's interesting because all these hedge fund people over the years have called me, right? Oh, what do you think about Twitter? Should I go for Twitter? That kind of thing. They're always a little more deft than that, but that's what they're saying. And I'm always like, it's kind of a shitty business as far as I can tell. And I don't know why. I write about it, but nobody's been able to make anything of it. Some very talented people and it's too small. And it's not like Facebook. And so I don't know if it's as good a business and it's fine to have it, I guess, but it's quite expensive. It's a quite expensive jewel for him to purchase for himself. And if he puts his really good company, which is Tesla, at risk, you have to wonder what's going on, right?

Kara Swisher: That's sort of interesting. He may lose interest. I don't, I honestly don't know. This must be tiresome for him, I would suspect, that is harder than he thought, probably. Maybe not. I don't know.

Scott Galloway: I think it's more tiresome for us.

Kara Swisher: Yeah, I know. It's good for us. It's always good for us when Elon's making trouble. But I think he's making some very good points about some of the product stuff. I think he's making a good point about the board. The board, people not owning the company. It's ridiculous. Not using the product, by the way. He didn't point that out yet, but I looked and they don't. It makes a lot of money for very little skin in the game. I think Jack Dorsey probably shouldn't have said this publicly, but he should have said it in the meeting. They don't have any, like, it's a dysfunctional board if it doesn't, if it's not moving in the same direction as the product in the company. So that's a little bit, that's a good point. And of course, that's a PR thing he's doing. But it's, I assume he's going to get this if he's going to pay this much, but it's certainly a fair price, even elevated. Even though it's sort of a lowball, everyone has this thing in their mind that this company should be worth more, and it's not. So I'm not sure how to square that circle.

Scott Galloway: I would bet. I mean, he's obviously a brilliant man. I would just bet after really kicking the tires on this thing and what was required, if in fact he does have the funding secured and how expensive that debt is going to be. So I disagree. I agree that I think the point he's made around the board not having a vested interest or being, it's difficult to be a true fiduciary for someone when you don't empathize with them. And the only way a board really empathizes with shareholders is to be shareholders. That's a great point. I don't think he's been able to articulate anything resembling any sort of product vision. I don't even think he's been able to articulate how he would be able to unlock value. I don't, there's nothing here as far as I can tell, other than this ridiculous notion that it needs to be, there needs to be less moderation. I would argue the reason that Twitter thrives because of moderation, not despite it. So I don't think there's, usually when you see an activist come in, when you see a Loeb or an Ackman come in, they put together very thoughtful presentations and 80 slide decks on, this is what needs to be done. And this is why it would unlock shareholder value here. He's even stated, which just amazes me, that's why the terms on this debt are probably so onerous. He said this isn't about money for me and it's like well it is about money for us boss so you've got to you've got we've got to be first in line.

Kara Swisher: Yeah, and also I just got to think this is going to put real, this is really going to make him tied around the collar by margining Tesla stock. We don't know how much stock is in pledge for other misadventures. And then the thing that gets scary here. And this could happen. If Netflix can go down 62%, Tesla can go down 80%. And if Tesla goes down 80% and he owes or he's margin 10, 20, 30 billion of his stock, he might start getting calls from these folks saying you need to sell. And then when he files, because he has to, because he's a CEO and it says, I have to sell Tesla stock, Tesla stock, which would mean it was already on a downward trajectory, that would just be, that would, that would be Tesla, lose Tesla stock really starting to plummet to the ground. He has an anti-gravity device around Tesla and all his stocks. This may not, this may pull him earthbound. I have to say this may, this doesn't have the same, you know, people really do believe in Tesla. They believe, you know, it's a, it's one of those, like, I believe stocks and you want it to work, right? Everybody sort of has a whole, and, and, And you can see the future in it. Twitter, I don't know. It feels like it's a dead weight in some ways. Even though I love it, you love it. In terms of a business, it feels like it's going to pull this guy down to earth. And this is not where this guy lives. So I don't know.

Scott Galloway: Oh, I don't know. You know what? Always bet on gravity over the long term. I think people would have said the same thing about Netflix's stock. I think just a year ago, I think Netflix was one of those stocks where it's like, well, if you want to invest in something safe, invest in Netflix. Just the same way they said, everybody said in 99 when things started getting scary, oh, invest in Cisco. Cisco's just bulletproof. And Cisco went down 80 or 90%. I mean, this really sends a chill through the market, the Netflix thing, because Netflix was sort of seen as pretty bulletproof, a leader. And if you looked at the business right now, you wouldn't see an obvious reason for why the stock would lose two thirds of its value. But I would think, and again, it's impossible to put yourself in his head, I would think after seeing what is required, how expensive it's going to be to support this debt, he would thinking, I would love an excuse or a reason that this thing does not happen. Because he really is, if he's got the funding here, I can't imagine how expensive and onerous that debt's going to be on the day that it closes. I can't imagine how difficult it is going to be to rally all the employees and say, this is my vision, please stick with me. He is literally the definition right now, if this thing closes, of the dog that caught the car. Now what? Now what? Now what? I think that's the way. And then, by the way, there's a now what if it doesn't work out. This stock is going to go down. Twitter is in a real bind here. And then maybe there'll be an interesting buyer, right, if it goes way down. Anyway, this is a high wire act for Elon, who is always in the sky. And so, good luck, astronaut Elon. We'll see if you can stay up or be sucked down to Earth because of Twitter. Thanks for the downloads. Thanks for the downloads. We appreciate it. Most downloaded. And do some other crazy thing.

Kara Swisher: Yeah, seriously. We are there for you, Elon. Do anything you want. Call Scott. By the way, he called you a name again this week, I assume. Did I miss that?

Scott Galloway: I miss that. He called me another one? Yeah, yeah. I didn't send it. I didn't think you'd want to see it. It was a response.

Kara Swisher: Did he call me hot or delicious?

Scott Galloway: No, no. You saw my tweet in response to him, didn't you?

Kara Swisher: No. What did you say? Hot or delicious? You didn't use those words together, did you?

Scott Galloway: I don't know. He said something critical about me, which got several million likes, of course, which made me feel nice. And then I just wrote back, let's call out the elephant in the room. The sexual tension between the two of us is palpable. That got a couple thousand likes. A lot of the Tesla Taliban weighed in and said, God admit, that's funny. That was funny.

Kara Swisher: That is funny, Scott. I hope for the best for you and your husband, Elon. It's time he got in touch with his emotions.

Scott Galloway: I think we could get pretty dirty together. I think we could transplant his transplanted hair onto my chest and he could run his fingers through it. Let's just imagine it. Just imagine it.

Kara Swisher: All right. Enough with the Tesla porn. Okay, Scott, let's pivot to a listener question and get out of this Elon porn erotica situation. You've got, you've got.

Scott Galloway: I can't believe I'm going to be a mailman. You've got mail.

[Listener question plays]

Tiffany: Hey, Karen Scott. I'm Tiffany, a 46-year-old fashion lawyer here in New York City. My question is about aging. I do not have kids, and I'm not married, and I don't expect either of those things to change. I am currently helping my mom in the final stages of her life after losing my father several years ago and it really got me thinking. Beyond just planning for my own old age financially, I actually really excited about the future of aging. You know, we see things like Margaritaville and the villages. Those seem bespoke to boomers. And on the conservative side, I'm really curious about what's going to happen. I think the millennials are going to be the ones to do it, so Gen Xers like me will hopefully benefit. I think they're going to turn the whole thing on its head. Like people aren't getting married. People aren't having kids. Like the nuclear family option for aging just isn't going to be viable. So I'm curious to hear your thoughts on what you think might be coming and specifically how we should think about investing, you know, beyond our own futures, but commercially investing in this, what I think is going to be an enormous cultural sea change that's coming. Thanks for any thoughts you have. Love the show.

Kara Swisher: Wow. Wow. Well, Scott, what do you think of this? We're not the people here. The reason I had children is in order to take care of me when I'm an old lady and carry me around on their backs. That was my goal for all the children I'm having. But this is interesting. What do you think?

Scott Galloway: The demographics around the explosion in seniors, there used to be, I think, 10,000 people over the age of 100 in the U.S., and they think there's going to be something like 10 million in the next 50 years. Our aging population, and not only that, there's just so much wealth across seniors. So not only will the complexion stay, I mean the first thing that's happening now in these seniors communities and one of the first things is that STDs become a problem, so seniors are having a lot of fun. These communities are really active. They have a really good time. They have money. And it's a fantastic place to invest, whether it's, I think cruise lines are a great place to invest, and then senior housing, these active living communities. My mom lived in the Del Webb Active Living Community in Summerlin, Nevada, and I used to go visit her, and it was fantastic. They do a great job. I think one of the nicest things about our society is that I think Social Security, although it's a transfer of wealth from the young to the old, I would argue has been one of the most successful social programs in the world. You've had a massive run-up in stocks. So, I mean, she's still so young. I don't even, I mean, 46 as a kid. But there's just no doubt about it. I think that investment strategy around the gray wave or whatever you want to call it is a great investment strategy. What are your thoughts, Kara?

Kara Swisher: Well, for people who don't know, by 2034, there will be more people over the age of 65 in the U.S. than under 18, according to AARP. That's a first for America. Obviously, Japan has been leading the way with an aging population. It's made a greater reliance on robots, another area of possible investment. We had talked about Disney's efforts in this area and this story, living communities, and this is planned communities that will have areas for senior residents. I think, with my mom and everything else, I think about it a lot, like how do you create these places where people will live and be able to function in a way that's most efficient? It's a super local business, but there's a huge opportunity for a brand here, like a Disney or others where you could, even, I don't know, you could think of a lot of companies getting into this, in terms of creating standards and making it easy. Just like, whether you're someone who doesn't have as much money and you're going to a Holiday Inn or you're a rich person that goes to Four Seasons because you know what it looks like, I feel like there's a possibility of a national brand doing something really strong here where people have a real demand for it. This seems like a great idea. I don't know. This is where I'd invest. Robots and golf carts and this.

Scott Galloway: It's great from a product standpoint, from a brand standpoint. Old people don't want to associate with brands that are strongly linked to them. Everybody wants to pretend they're younger than they are. So even if you look at bank commercials that are supposed to be catering to people who are retiring, they take two 35-year-old models and spray gray hair on their sideburns and pretend they're 60. Youth is still very in vogue from a branding standpoint. There's this weird phenomenon that happens that you cement your vision of yourself physically at the age of 39. From that point on, every time you look in the mirror, you're like, oh my God, I look like shit. Because for some reason, at least our brain decides we've stopped aging aesthetically at the age of 39. And from a brand standpoint, all of these seniors' products still basically say, oh, they show a 40-year-old instead of an 18-year-old. But there isn't really senior branding. There's senior products that have what I call youthful feel to them. I mean, look at these pharmaceutical commercials that are catering to people with very serious disease. It's young people doing the tango and blowing bubbles with their grandkids and running around and spontaneously breaking into dance. From a product standpoint, yeah. From a brand standpoint, we're all still very obsessed with youth.

Kara Swisher: We should go into this. You and I should become senior living potentates. That's what I think. After our Twitter DAO? After our Twitter DAO and your relationship with Elon.

Scott Galloway: I'm thinking about a neck lift. I'm thinking about a neck lift.

Kara Swisher: You should get that. If you want to be attractive to Elon, that's the way it has to go.

Scott Galloway: Oh, he's so hot for daddy. He is so hot for the dog.

Kara Swisher: Okay. All right. That guy wants the dog. Look at his Twitter. He clearly wants me. I'm just saying, he clearly wants me. But, you know, George Hahn's going to get pissed. We're going to move out of this strange, strange situation where I'm in. I find myself trying to explain to Scott that Elon does not want him. If you've got – thank you, Tiffany. If you've got a question of your own you'd like answered, send it our way. Go to nymag.com slash pivot to submit the question for the show or call 855-51-PIVOT. Scott, one more quick break and we'll be back for wins and fails because I got to catch a plane.

[Ad break]

Kara Swisher: Okay, Scott, let's hear some wins or fails. I'm going to do the first win, Snickers on Twitter, with its thing around the penis vein on the thing. I think they're hysterical. They make me laugh. I love them.

Scott Galloway: That was pretty good.

Kara Swisher: Yeah, that's your win. Do you know about this? About penis veins?

Scott Galloway: Yeah, I know about it very well, actually.

Kara Swisher: Yeah, okay, but I'm talking about on the candy bars. Those things are on the top of Snickers. They found one without one. It's very disturbing not to have the penis veins on your Snickers. Yeah. That is my win. Also, I have one more win. I think Peloton raising rates is a good idea. I think the CEO should get some time to run. I know the activists are on his ass, but it makes sense to do that and make the bikes cheaper. Anyway, go ahead. Your wins and fails.

Scott Galloway: I don't have a fail. My win today is University High School Charter. And I went to my high school expecting, you know, I would see the world is glass half empty. And I walked, I spent the full day at the high school. I want to thank Principal Middleton and the kids there. They were really generous with their time with me. And I met with a college counselor, a really impressive woman named Paula Van Doren. And I was expecting to go in and hear all these awful statistics about they're homeless, and they have no support at home, and none of them are going to college. And here are some stats at university high school where they speak 47 languages. I mean, this is really full stack, about 85% kids of color, I believe, and kids from all, the entire income spectrum, and probably leaning towards middle and lower income. 97% graduation rate, and 92% of these kids, Kara, are going on to college. And I just walked away from this day inspired that America, California, the Los Angeles Unified school district. I spent some time with Alberto Carvalho, the new superintendent who was called the LeBron of the Miami school system. And you meet all these teachers, Mr. Ackerman, I met in the leadership class. They are just such good people doing such meaningful work and it's paying off. These kids, these kids are playing instruments. They're doing math. They're getting leadership skills and they're going on. Nine in 10 of these kids, and they are not from backgrounds. They are not from the quote unquote privileged background that a lot of people talk about when they think about college. These kids are in this school. It really does reflect, it is a rallying point for the community. And I walked away and I thought, this is exactly what good government in America is supposed to be. And that is giving good kids great opportunities. So my win is LAUSD and University High School charter that is sending 92% of its kids to college this year. I was really inspired. They're doing a great job.

Kara Swisher: I like it, Scott. That's a very hopeful vision of the future, of your future, too, with you and Mrs. Musk. Okay, Scott, that's the show. We'll be back on Tuesday with more Pivot. Can you read us out?

Scott Galloway: Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Intertot engineered this episode. Thanks also to Drew Burrows and Miel Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. Elon, let's get together and split a Snickers. I think you know what I mean.