Disney's Lost Magic, Kotick's Dilemma, and the Box Office Champion of 2021
Good afternoon and welcome back to The Daily Courant, highlighting all of latest and most noteworthy journalism being produced across Puck. Today, we draw your attention to William D. Cohan’s latest reporting on the real insider conversations that have transfixed Wall Street: Has Elon Musk exposed the Tesla confidence game? Should Apple buy Peloton? And what’s really behind Larry Culp’s plan to vivisect GE?
Plus, below the fold, Dylan Byers reveals the board room drama surrounding Bobby Kotick’s embattled tenure at Activision, and Matt Belloni crowns the box office champion of 2021.
The inside conversation about Elon Musk's ongoing stock sale, the folly of John Foley, a dire warning from Janet Yellen, and the remarkable financial incentives behind Larry Culp's new plan for GE. Each week, I receive feedback from readers and sources about Wall Street’s biggest characters and concerns. I’ll be engaging with some of those questions here—in addition to a few observations of my own.
Bill, do you think Elon will keep selling? And that the Tesla stock will remain steady?
He’s playing with house money, so it’s doubtful Elon Musk cares very much what happens to the stock price if he happens to sell some shares from time to time. He’s worth around $290 billion at the moment. And, let’s face it, Tesla is a meme stock, completely untethered from the company’s financial performance. If Tesla’s price action were the slightest bit correlated to its income statements, then as my friend Scott Galloway told me recently, one could expect Tesla stock to fall 80 percent or more “pretty crisply” given its momentum-driven, 16-fold increase over the past two years.
All of which is to say, I think Elon Musk could shoot someone on Fifth Avenue and it would have no effect on the Tesla stock price. He’ll be able to sell as much stock as he wants, as often as he wants, for as long as he wants, and he’ll still have all the money he could possibly want and much, much more. Now, as for the morons who bought Tesla stock after Elon’s November 6 tweet about selling stock, only to see the stock retreat (and who have now lost 10 percent of their money in a week), well I guess I do feel sorry for them. But by now, most people know, or should know, that Tesla is a confidence game.
You wrote an extensive article on Sunday about the rise and fall of GE. What’s your impression of the current C.E.O., Larry Culp? Do you think his plan to trisect GE will unlock more value for shareholders?
Larry is all about Larry, let’s make no mistake about that. Culp is not only the first outsider to lead GE, he is also the first GE C.E.O. to have an employment contract. And what a doozy it is! Just compare his original contract, from when he was hired three years ago, with how that contract was recut in August 2020, in the midst of the pandemic, in a way that vastly increased the odds of a massive payout for him...
FOUR STORIES WE'RE TALKING ABOUT 
It’s a win with a big asterisk, but still notable, given the audience for the franchise. MATTHEW BELLONI 
Backlashes against racial progress are as American as genetically-modified apple pie. But C.R.T. has unleashed a new torrent of grievances. BARATUNDE THURSTON 
The media has called for a blood sacrifice, as Logan Roy might say. But the Sun Valley crowd thinks Kotick isn’t going anywhere—yet. DYLAN BYERS 
Disney+ badly needs to grow beyond families with kids and Star Wars or Marvel fanatics. Can Disney+ recreate its Hamilton magic? JULIA ALEXANDER 
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