Musk and Neumann are extreme narcissists and spoiled brats

Whitney Tilson’s email to investors discussing Patrick Byrne is a looney toon; Elon Musk and Adam Neumann are extreme narcissists and spoiled brats; Musk tries to defend “pedo guy” tweet; Ludicrous: the unvarnished story of Tesla Motors; how Adam Neumann’s over-the-top style built WeWork; what…

1) Patrick Byrne, who until recently was the longtime CEO of Overstock (OSTK), disclosed yesterday that he sold all of his stock.

Q2 hedge fund letters, conference, scoops etc

To reassure his followers and Overstock shareholders, he released on his Deep Capture website – where he identifies himself as "a concerned citizen who has been hunting the oligarchy since 2004 and the Deep State since 2006" – the single most bizarre letter I've ever read. It's a mixture of paranoia, self-pity, delusion, and aggression. You can read it here: A Message to My Former Colleagues at Overstock. Excerpt:

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For these reasons it may give you some comfort to know what I am doing with the capital generated by the sale of my stock: after paying tens of millions in taxes (after all, "We didn't build that," right?) by Friday the rest will be in investments that are counter-cyclical to the economy: Gold, silver, and two flavors of crypto. The gold and silver are stored outside of the United States, in Switzerland, and within two weeks, will be scattered in other locations that are even more outside of the reach of the Deep State, but are places that are safe for me. The crypto is stored in the place where all crypto is stored: in mathematical mist, behind long keys held only in the memory of someone who is quite good at storing such things in memory (with paper backups in the hands of a priest I met 35 years ago who never sits foot in the West).

These acts accomplish two objectives:

1. 1. It provides a hedge for Overstock. If the economy craters and thus Overstock runs into tough times, those investments will soar (that's the "hedge") and you will have access to capital if needed. In fact, you will have not just access to capital, you will have access to the friendliest capital imaginable: my own. I have to wait six months for it to be legal, but anytime after March 17, 2020 I can provide a capital injection if needed by buying back into Overstock. Please remember that as you watch the global chaos. If you see the U.S. economy cratering please do not lose the sleep you otherwise might: you will have a friend who has sunk (almost) his entire fortune into investments that will soar if a crisis occurs, and who knows your business well, and who appreciates you.

Well, phew, it's good to know that Overstock is the stock I'll want to own "if the economy craters" because Byrne, having vanquished the Deep State, "hedge fund choagies," and "agitprop press," will come to the rescue!

This isn't a clinical diagnosis, but he is a true looney toon. He makes Tesla (TSLA) CEO Elon Musk and WeWork CEO Adam Neumann look like paragons of reason...

To be clear, I don't think Musk and Neumann are nuts. In fact, in many ways, they're both inspiring, brilliant entrepreneurs. But as the next two stories demonstrate, they're both extreme narcissists and spoiled brats, which leads to all sorts of erratic behavior...

2) Let's start with Musk...

Recall that in the summer of 2018, the world's attention was focused on a team of young soccer players trapped in a cave in Thailand. As the weekslong rescue effort unfolded, Musk tried to help by designing and sending out a mini-submarine.

After the successful rescue, a British cave diver on the scene, Vernon Unsworth, publicly mocked the impracticality of Musk's sub. Most people would ignore such an insignificant slight (or be smart enough not to draw attention to it), but not Egomaniac Elon! Continuing a long pattern of attacking anyone who questions him, he called Unsworth a "pedo guy" in a tweet to his 28 million followers. Musk then continued to investigate, harass, mock, and bully him, which led Unsworth to sue him.

Now, under oath, Musk is lying like a central banker on the eve of a devaluation: Elon Musk says 'pedo guy' tweet did not suggest British cave diver was a pedophile. Excerpt:

Elon Musk on Monday said he did not intend to accuse a British diver of pedophilia by branding him a "pedo guy" on Twitter, as the Tesla Inc chief executive sought to dismiss a defamation lawsuit...

Musk, 48, said "pedo guy" was "a common insult used in South Africa when I was growing up."

This sounds 1% plausible – until this came out (darn those off-the-record e-mails!):

Musk also said his "off the record" August 2018 e-mail to a BuzzFeed News reporter to "stop defending child rapists" was based on an aide's summary of a private investigator's report on Unsworth, and that he did not then know the statement was false.

Here's my friend Glenn Tongue's take on it:

I have read everything posted from the court. Musk is the worst witness ever – he can't stop talking and is totally tied up in knots.

Here's a 43-tweet thread that summarizes his deposition (scroll down to the first tweet and read upward; #27-43 are here).

The thread highlights what a terrible human being Musk is. Not only a pathological liar, but angry, thin-skinned, and vengeful...

I find this sad because there's so much to admire about him. What he's built at both Tesla and SpaceX boggle my mind. (For more on these companies, I highly recommend Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future.)

Speaking of good books about Musk, I just finished Ludicrous: The Unvarnished Story of Tesla Motors. Author Edward Niedermeyer has long been a Musk and Tesla skeptic, which certainly comes through in the book. But it's not as one-sided as I expected... Tesla is an incredible entrepreneurial story, and this book covers it well. Here is a review from the WSJ: 'Ludicrous' Review: A Revolutionary Old Product.

(If you'd like to be added to my Tesla e-mail list – roughly one e-mail per day – simply send a blank e-mail to: [email protected].)

3) After reading this devastating story on the front page of today's WSJ detailing the We Company's co-founder and CEO Adam Neumann's frequent drug use and love of tequila shots, I'm renaming it the Whee Company! It's an excellent piece of investigative journalism and reveals all sorts of shenanigans... How Adam Neumann's Over-the-Top Style Built WeWork. Excerpt:

Adam Neumann was flying high. Literally.

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Since Mr. Neumann co-founded WeWork – recently renamed We Co. – with Miguel McKelvey nine years ago, he has led with unusual exuberance and excess. His combination of entrepreneurial vision, personal charisma and brash risk-taking helped the company surpass $2 billion in annual revenue, and made it the country's most valuable startup.

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Like some high-profile CEOs in tech, he hopes to live forever, according to three people who heard him say this, and has invested in life-extension startup Life Biosciences LLC.

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He relishes trips in private jets. Last year, We bought one for more than $60 million, people familiar with the sale said. Mr. Neumann has borrowed more than $740 million against his stock and has sold multiple hundred million dollars of shares, people familiar with those sales say, eliciting widespread criticism from analysts and Silicon Valley investors. These share sales weren't disclosed in the IPO prospectus...

Here's what I predict is going to happen...

1. Whee never goes public.
2. As the company tries to reduce its catastrophic $1.6 billion annual burn rate to survive, it ceases growth, lays off huge numbers of employees, and tries to sell assets.
3. Existing investors, led by SoftBank, wanting to avoid a total wipeout, will throw good money after bad and invest $1 billion or $2 billion in a distressed round that values the company at $5 billion.
4. As part of the capital raise, investors will demand that Neumann step down and throw him out.
5. None of this makes any difference, and the company files for bankruptcy a year from now.

Mark my words...

Best regards,

Whitney