Tesla’s Elon Musk & Cathie Wood Spoke on X. 3 Things We Learned.

Musk also suggested that passive investing vehicles, such as index funds, have grown too large and amplify gains and declines in stock prices. The growth of index investing isn’t something that can be managed or fixed, per se, but investors should be aware that the stock market today isn’t like that of the past when a larger percentage of assets under management were actively managed.

Don’t Count on a SpaceX IPO

We’ve been believers in the possibility that SpaceX could be headed for an IPO, but that might not be the case based on the conversation, which turned from the pros and cons of indexation to the benefits of being a public or private company. Public markets can be too focused on today’s cash flow, said Wood. Musk added that privately held companies can take more risks, adding that car companies such as Tesla are capital-intensive, and public markets have more capital available than private markets.

“I don’t think it’s worth going public until you have an extremely stable and predictable revenue stream,” said Musk.

That might disappoint investors who want to invest in his space company, SpaceX, which has a growing Wi-Fi business called Starlink, but its growing revenue base might not be “extremely stable and predictable” yet.

Self-Driving Cars Are Still the Future

As for Tesla, Wood and Musk hit on Tesla’s autonomous-driving technology. “The cars are incredibly good at driving themselves,” said Musk. Self-driving cars represent a huge opportunity for the company, Musk said for the umpteenth time.

As for regulatory hurdles, Musk praised the National Highway Traffic Administration as sensible, even after recent actions. “I think it will be fine from a regulatory standpoint” when the tech is ready, he said.

Miscellany

Most of the early conversation dealt with X, a privately held company, but the platform matters for Tesla investors. For example, losses at X could lead to stock sales by Musk. Large stock sales by any CEO always matter to investors.

Wood’s ARK Invest, though, hasn’t been selling Tesla stock. It bought about 111,000 Tesla shares in two funds on Wednesday. Wood is a longtime bull for Tesla, which is the second-largest position in the

ARK Innovation
exchange-traded fund.
Coinbase
is the ETF’s biggest holding.

Tesla stock was down 0.4% in midday trading Friday, while the S&P 500 and the
Nasdaq Composite
were both up about 0.2%. Through midday trading, Tesla stock was up about 107% year to date. It’s been a big rebound from a 65% decline in 2022.

Write to Al Root at [email protected]