Twitter Full of Characters, Auto Intel Reporting, Satellite Internet Heats Up

April 5, 2022
Tuesdays are for Troublemakers. This Tuesday is no exception as we talk about the implications of a car-guy being the largest shareholder in Twitter. We also dive into Steve Greefields April Auto Intel Report and talk about the breaking news of Amazon’s entry into the satellite ISP space (pun intended).
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Elon Musk is now the largest shareholder in…Twitter. 9.2% to be exact.

  1. 2.9B as of Friday’s closing price.
  2. Musk filed a required SEC disclosure for anyone purchasing more than 5% a few days late
  3. Twitter surged over investor sentiment in Musk’s influence in the company
  4. “On March 25, 11 days after becoming the largest shareholder in Twitter, Mr. Musk tweeted a poll, saying, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” He added in a follow-up tweet: “The consequences of this poll will be important. Please vote carefully.””
  5. “Do you want an edit button?  Yse or on 

Steve Greenfield’s April Auto Intel Report is full of insights

  1. Dealer investor group is in full swing, research mode
  2. "We had record front-end margins, over $6,500 a copy in a new car for the quarter...we're pressing very hard for them [OEMs] not to bring inventory levels back to pre-pandemic levels….We should be selling cars at MSRP. I mean this industry needs to get away from doing all the negotiating it's a hell of a lot less complex, much easier, and it brings the right value for the vehicle...I just don't see margins coming back going back topre-pandemic levels ever. the only thing that can screw this up is if they bring the supply back to the 60-, 70-, 80-day levels that we used to see, Ijust don't see that happening."- Jeff Dyke, Sonic Automotive President
  3. "I need to make more money on the sale of the EV because there will be much less long term revenue from service and parts. I need to see a bigger upfront margin to operate a dealership profitably." Anonymous Nissan Dealer

Amazon investing billions on launches to provide satellite internet

  1. Project Kuiper, Amazon’s planned broadband-satellite unit, has purchased up to 83 launches over five years to compete with Starlink
  2. “In 2020, the Federal Communications Commission authorized Project Kuiper to deploy 3,236 broadband satellites, according to a FCC filing. The agency required at least half to be operational by July 2026, or else Project Kuiper could lose the right to send up some satellites”
  3. Starlink currently has over 1900 operating satellites and 250k customers


SPEAKERS

Kyle Mountsier, Paul Daly

Paul Daly  00:24

Yo, Tuesday, April 5 Kyles Playing the air drums we have a lot of awesome stuff to talk about today there's a car guy who is now on the board of Twitter. We were featured in auto ventures report just a lot. Isn't it always a lot though?

Kyle Mountsier  00:41

It is I've ever every morning we're like I think we can get through the show. Not really sure.

Paul Daly  00:48

A lot. Not a lot. And odd. You know how I live in Syracuse, New York. And you know, we're kind of known for having a kind of a disproportionate amount of cloudy days in the in the wintertime. And if you look behind me, you can see that it looks a lot brighter and different than it has since we moved into the new office. And that's because this is the first day the sun's been up.

Kyle Mountsier  01:10

He's like, I've got my lighting all off because Syracuse decided to sun

Paul Daly  01:16

not to plan for sun. I was like, Man, I'm bummed this cloudy today.

Kyle Mountsier  01:21

For the first time in nine days.

Paul Daly  01:23

Sun. Sun Sun. Yeah. Hey, man, that's even exciting. And we have as

Kyle Mountsier  01:29

you said something. Okay, look, coming from a lot coming from a car guy. Okay. And I would consider myself a car guy. I would too, to say a car guy owns 9.2% of Twitter. I just don't know if I can get that phrasing. I don't know if that resonates with me now. Your guy who owns an auto manufacturing company OEM owns 9.2%

Paul Daly  02:01

of I used to route in 

Kyle Mountsier  02:04

car guy. Come on, man, 

Paul Daly  02:06

because I am not a car guy in the sense where like, I really like get into cars. You know, I'm saying like, there's definitely J leno there's a car guy. But he's not a car guy.

Kyle Mountsier  02:18

No, no. Right. J Leno's a car enthusiast.

Paul Daly  02:21

But he would say he's a car guy. Ah, I know what you mean. You know, it's funny the first time the first time I've ever contextualized either. We're talking about Elon Musk. If you didn't know, the first time I contextualize Elon Musk is a car guy is when Brian benstock did it. And I was like,

Kyle Mountsier  02:38

a car. A car guy is the richest man in the world. And we're like, yeah, we own him.

Paul Daly  02:44

Come on right now.

Kyle Mountsier  02:45

This is like, I don't know. This is little crude. But if you ever saw like Chappelle Show, back in the day, the it was it was absolutely ridiculous. And he was the only one that could pull it off. But there was a racial draft. And it's like, when when you didn't when you didn't want to associate with that person. All of a sudden they did something. And it's like, yep, we associate with him. It's like, Elon became the richest man in the world. Car guy owns Twitter car guy check.

Paul Daly  03:10

It's a really funny point. Oh, what do we have? We have anything to talk about? Oh, let's let's do some post notes. They'll get into the story that broke not just about Twitter, but also some additional news that broke and we're getting some cart like car industry news. And, and we'll go but, Kyle, you got a message yesterday? Yes.

Kyle Mountsier  03:28

Yeah, I'm so excited because I think it was just over a week ago, I told the story about the chipotle experience and me calling the customer service rep. If you haven't heard about

Paul Daly  03:38

it really quickly, Kyle had a breakdown. Chipotle delivery, he called national customer service, the rep took really great care of him. And at the end, he said, Have you ever considered working in automotive? Right, because we're actively recruiting to the automotive industry. So he was like, hit me up on LinkedIn, if you're interested in getting into an awesome industry. And last night, you got the message,

Kyle Mountsier  03:59

I got the message now. Okay. There's a couple like idiosyncrasies to this whole deal, that are a part of the story that it's some someday maybe we'll write a book about this particular little thing. Maybe I'm hoping this young lady becomes like a dealer in eight years, right? Like the story writes itself. It's a Netflix original series and all that type of stuff. High Hopes, but yes, she reached out and we're going to connect today. She's really interested in getting into the auto industry. So again, if you're in the Rochester Buffalo, Syracuse area, and we reach out to you, we would love to be able to place this young lady into an auto dealership and change your career trajectory. But here's the interesting thing. So she reached out to me on LinkedIn, and I was looking around and the company that she currently works for is not actually Chipotle, which a lot of people know this. Right? But she works for what's that?

Paul Daly  04:54

Is it Sutherland?

Kyle Mountsier  04:55

No, it's not. It's another large like National remote work Call Center Service, which is really crazy because she had to take ownership of the chipotle experience

Paul Daly  05:08

and the brand, she said

Kyle Mountsier  05:11

and she said things like our store, right? She took full ownership of it. She probably just got off a call for like Applebee's. Right? Right before it maybe she's maybe not maybe she's

Paul Daly  05:22

like a Chipotle. I'm thinking Chipotle might have some dedicated she,

Kyle Mountsier  05:27

they might, but for them to utilize a secondary BDC have the systems correct all in line, you know, all the work, all the word tracks all the capacity to refund and all that and give you a better experience. Like I'm even I'm elevated now. I'm like, this was unbelievable, because it's not just the person. It's all the technology that enabled her to be able to do that. So Whoo, lots of

Paul Daly  05:49

learn. We'll see. We'll definitely keep you keep you apprised of this story because it is not over. I have some phone calls today from Rochester is not that far from you have some friends? Yes. We're gonna call next next step. What does she need to make? Right? Because that's gonna take where we can plug her in. So we're gonna work on this, we're gonna work on this. Other quick notes. Yo, we have referral rewards. If you tell people about the email that we have at asoto comm you can sign up there. If you get the email forwarded to some friends, right? It'll automatically track it if they just click on the link, sign up from the forwarded email. And like we want to hook you up with some great swag, bracelet. Stickers, hats, shirts, crew necks all where's my Oh, I forgot to put my pin on. Oh, no. A lot of the pins are great. Because like if I just wear like a regular black basic, I can just like throw the pin on there. And I feel like I'm dressed up.

Kyle Mountsier  06:39

Yes. Yeah. All right. I love it. I'm surprised that more people haven't taken advantage of it. Because we literally send you this stuff for free. It's ridiculous. We've gone out of our way to send you free stuff. Let's go. Okay, forget

Paul Daly  06:52

the mugs too. I've been other mugs on the B cam. I love these things. And actually seems like people really love the mug. Right? Because the mug it's a good day to make trouble or early mornings or for troublemakers. You see it on the screen right now. Like there's something about like reading it on the bug in the morning as you're pouring the coffee and you're like, it's a good day to make some trouble. We got to get Clint Eastwood to say that.

Kyle Mountsier  07:13

To make some trouble will be so good. So good.

Paul Daly  07:17

All right. So a big news yesterday, Elon Musk acquired a majority or not a majority stake. We're not there yet. We're getting there. He is the largest shareholder now in Twitter after purchasing a 9.2% stake spent about it cost about $2.9 billion to do so. And he's a little hot water with the SEC No surprise there because you have to apparently file a disclosure. When you do that require more than a 5% stake in the company. You have to fire disclosure saying that you did it and he found it late, which is I guess kind of on brand for Elon Musk. So but

Kyle Mountsier  07:53

he's like, come at me, bro.

Paul Daly  07:57

What up 28%. And, and, you know, this is like he's been leading up to this right with a bunch of tweets talking about free speech being essentially a functioning democracy. And then you know, he does his Twitter polls and is great. But his great tweet, I thought it was the best one. It says the consequences of no. He said Do you want an edit button on Twitter? So now he's influencing the brand experience via his just personal account poll. Do you want an edit button? And actually, it auto corrected? Because I typed it in right to the show notes is y se or o n?

Kyle Mountsier  08:35

So Oh, that's so smart. Yeah, that's so smart. Golly, that's just oh my goodness. Okay, so

Paul Daly  08:44

and then let me let him finish that and then we'll we'll jam on. I just broke the news just broke this morning. That Twitter announced that it will appoint Elon to its board of directors. How did that even happen? Were they like, okay, like we can just ask them to be on the board. Right? I don't mind pre planned. He's like, Hey, I'm gonna buy this and that no, I think he's just literally forcing the hand and Twitter's like, we know I'm on the board. You know what's gonna happen to the stock price?

Kyle Mountsier  09:11

Without it they're like 28% Today 40 tomorrow.

Paul Daly  09:16

So So tell me in your opinion, is this a good thing? Or a bad thing?

Kyle Mountsier  09:22

Oh, man, I want

Paul Daly  09:23

to start maybe maybe have to contextualize that a little bit. Is it a good thing or a bad thing for Twitter?

Kyle Mountsier  09:28

For Twitter? Absolutely great thing I think you know, they they have come up against this because their text only primarily and that's their you know, the move on tick tock tick tock, Instagram, Facebook. The primary movers is to a lot of video is to store you know, last week Twitter announced sorry, tick tock and out stories. So you've got just a lot of movement to real time video and on a platform that is, you know, words only and obviously You can share videos and all that type of stuff, but the algorithm throttles it. And it you know, they've worked on the spaces thing, but clubhouse really still owns a lot of that space. You know, I think there's going to be a certain impetus toward innovation for the platform, which is going to be necessary because in the in reality, like you think about the platform, they've added Twitter spaces, and they added more characters. That's basically all they've done in 15 years. Right. Yeah. I

Paul Daly  10:27

mean, which is pretty, which is actually impressive. It is impressive. Then live streaming to that it? Yes, Periscope. I happen to think that more than the technology, I think is going to impact Twitter in a positive way, but in a in I think, a tumultuous way. Because, in my opinion, Twitter's very inconsistent, quote unquote, commitment to free speech. And Elon Musk is very straightforward with his commitment, right? Even when Starlink you know, he was putting the satellites over in Russia, in Ukraine, he's like, Hey, we're not going to block any of the Russian news outlets, which you know, are like the propaganda outlets. He's like, Look, I'm a free strong, purist, right. Like, I can't I can, once I start stopping information from going out, all of a sudden, I'm the arbiter and curator and I shouldn't be. So I think I think Twitter success is going to come from figuring out what they're going to do with this free speech thing, because they no longer have a blank check. What are they going to cancel musk? Right. So his account? And so and he's on the board now? So I think I think

Kyle Mountsier  11:29

it is important. Yeah, that's, that's a big piece. I think of this because, you know, we talked about the algorithm, the, you know, the, the throttling of certain accounts and things like that on social media platforms. And in the, in the last year and a half, we've seen a lot of news, a lot of legal debates around the the algorithms and throttling of speech and all that. And so I think I think it is, it's going to be an interesting move to watch what Twitter is expected to do based on his seat in the board.

Paul Daly  11:58

Absolutely. So and Elon Musk, you know, is he a car guy? Is he not a car guy, we'll let you decide for yourself. But speaking of car, guys, stop segway. One of my favorite car guys, analysts, thinker, operator, Steve Greenfield, who co founder of automotive Ventures has his monthly auto Intel report, which we have talked about for a really long time on the show, I feel like there was a rite of passage that happened. And I never, if you had asked me six months ago, I wouldn't even seen a path for Hollywood end up in some way in his monthly Intel report. But April came out, and he was awesome enough to include us in one of his little checks. So great, a seed round of funding. It was it made me feel really good. I just never thought I'd have the space in that.

Kyle Mountsier  12:45

I know. Right? It's that's a that's a really fun kind of call out and shout out and to kind of put us in the the same realm of all the other stuff that he talks about from a tech perspective and an automotive perspective. And, you know, we're actually having a conversation with one of our investors Liza yesterday, just about the energy around what what this community what the asoto community and the asoto community, even though a lot of the face is Paul and I right now, it's more than that. It's a community that's that's pushing back together, you know, that the energy around it is really, it is a center point of automotive. And so, you know, for him to include that is a shout out to that,

Paul Daly  13:23

for sure. And you know, it's nice that there's like no other motion in the space. And that's one of the things you're like, no one's doing anything. And this. And Liza yesterday on that call. She was just like the timing of this, like, this is the right time. And we started talking about that a little bit like, yeah, if it was five years ago, this couldn't have happened. And I think if it's five years from now, this couldn't happen. Like the timing of this is right now. The the serendipity of it, the even like, like what happened in COVID. And like how this even was birthed it was from this DNA of auto dealers were like, hey, when dealers band together, no crisis can win. And with all the shifting sands of technology, and culture and manufacturing, right, like, well, that is when things happen, right? It just is you look at like when, when things can disproportionately gain traction, it's right now. So it was good to see that, in his report, we'll probably get him on the show last week to talk about this, he's going to start contributing a little more. He also formed or he formed a group, a dealer Investment Fund, where he got a bunch of dealer investors and they are going to invest in trucks to you know, move technology forward and advance things. And one coolest things about this fund to me is the fact that they didn't, you know, build the fun with anything in mind. You know, traveling all over the country, you follow on social media right now you travel, you know, they're traveling all over for dealer investor meetings, and they're actually trying to uncover what the biggest problem they need to solve are and then they are going to actively look for companies they can invest in that solve those problems. Doesn't that make a little bit of sense?

Kyle Mountsier  14:53

Yeah, without a doubt, and yeah, yet, this will come out but I have a lot of passion for it. a very similar way of going to market so yeah, yeah.

Paul Daly  15:04

Yeah, I love I love the part of the report where he says it's called Face set it right and he just quotes some people. So I have quotes, I'd like to read this one from Jack Jeff Dyck, the CEO or Sonic automotive president, the third largest dealer group, at this point, publicly traded, he says we had record friend margins over 6500, a copy and new cars for the quarter are pressing very hard for them the OEMs not to bring inventory levels back to pre pandemic levels, we should be selling cars at MSRP. I mean, this industry needs to get away from doing all the negotiating, it's a hell of a lot less complex, much easier and brings the right value for the vehicle. I just don't see margins ever coming back to pre pandemic levels. The only thing that can screw this up is if they bring supply back the OEMs back to 60 7080 de levels that we used to see, and I just don't see it happening. So he's like, oh, yeah, this is your game to lose right now.

Kyle Mountsier  15:58

It absolutely is in for them. The margins are there, too. They haven't had to have rebates. I mean, come on where it is. We talked about the rebate thing last week, and it you know, if you constantly have to have rebates, the value of the vehicle isn't the route value of the vehicle. Now, everybody gets used

Paul Daly  16:17

to that. Yeah. And so everyone's ready to negotiate.

Kyle Mountsier  16:19

Exactly, yeah, they got rebates in negotiation, which, which lengthens the time of the sale? Right? In decreases trust in the dealer and the OEM. And so like, what are the things that we're trying to combat? Long sale times and, and lack of trust in the auto dealer

Paul Daly  16:39

and hold off the barbarians at the gate? Who we just talked about in our first story? Yes, right. Like this is the chance to equalize that playing field like this is the price of the vehicle. Do you want red, white, black? Like Which color do you want? Which package Do you want? Buy it? Yep, exactly. So yeah, there's one other quote from an anonymous Nissan dealer. I like this. I've never seen an anonymous quote. But it's basically the dealer said I need to make more money on the sale of EVs because there'll be much less long term revenue for service and parts. I need to see a bigger upfront margin to operate a dealership profitably valid.

Kyle Mountsier  17:18

We don't have any more time but I've got a lot of a lot of thoughts on that. So maybe we just bring that back tomorrow. Because there's truth. And there's there's a really short side of this to that as well. So there's a lot of truth but there's a lot of short sightedness in overall business revenue and to meet the customer where where they are at find new revenue opportunities.

Paul Daly  17:39

Well, I write I mean, obviously, the point is that if you run your dealership tomorrow, when EVs are the norm, the same way you run your dealership today, yes, you need more money up front. Of course. Of course, that does work. But guess what? That's also not how the free market is going to work. Exactly. Because you can't just say to somebody like you're responsible for boosting my profits in the front end just because the world has shifted so little a little

Kyle Mountsier  18:09

bit of coffee shop in that dealership put 18 charge stations out front and make revenue on the coffee and the charging station. Oh, he's

Paul Daly  18:16

gone. Oh, food service.

Kyle Mountsier  18:18

Come on, man. So many opportunities. He said Come on, man.

Paul Daly  18:26

Come on, man. Come on, man. Come on, man. Oh, man, we can't even get to our third story but because we've already had been here for 18 minutes, but you can check it out in the show notes. It's about Amazon launching satellites to compete with Starlink the satellite internet service provider I think racing to be the ISP internet service provider is probably the next frontier of control of everybody's wallets and pocketbooks cuz the shopping experience, you get free internet, guess what? You're gonna buy stuff from them. So I'm thinking we took you on a little tour this morning of everything going on and culture in automotive. Check out the show notes for the links, sign up for the email, a soda calm, we have a lot more coming. It is only Tuesday. So go get some