Musk and Moats-A Brief Update

You may have seen my article earlier this week about the war of words between Warren Buffett and Elon Musk over disparate business philosophies. In that article I alluded to the fact that Musk’s investments have “bled cash to the extent that he has experienced multi-billion-dollar negative cash flows over a five-year period.”

Well, last week CNBC announced that George Soros’ investment firm, Soros Fund Management, bought $35 million worth of Tesla convertible notes in the first quarter of 2018. Last year, Tesla raised $1.8 billion in its first high-yield “junk” bond offering. This was $300 million more than was expected.

Now, in the grand scheme of things, $35 million may not seem like a lot of money, but it does indicated that Soros is bullish on Musk and Tesla. And Tesla seems to be in good company. Soros also loaded up on Amazon, Alphabet (Google) and Netflix stock, while dumping Facebook and Twitter.

In the spirit of technological disruption, all of these companies have successfully disrupted their respective spaces, although Facebook, and social networking sites in general, have faced challenges recently, for reasons that have been well-covered by the press.

What are your thoughts? Please reach out and share them.

And don’t forget to subscribe to my weekly newsletter, Something To Sleep On, which will arrive in your Inbox every Sunday. Each issue focuses on a particular theme and includes a quote, a thought-provoking question, a short article written by me and a link to an supporting article.

All of these elements will work to reinforce the weekly theme and give you something to sleep on as you get ready to begin your workweek.

mike cobb