Galileo Russell, magnifico finance nerd who upstaged analysts on call with Elon Musk
The until-then little-known small-time investor lobbed tech and future products questions that Musk deemed ‘great’
San Francisco — Galileo Russell is still coming down from the rush of his 23 minutes of fame.
That’s how long he was in the spotlight during the bizarre Tesla earnings call last week, when a petulant Elon Musk cut off "boring" Wall Street analysts asking about the cash-burning company’s finances and declared: "We’re going to go to YouTube."
Cue Russell, the 25-year-old host of a millennial-focused channel called HyperChange TV. The until-then little-known small-time investor lobbed roughly a dozen questions, many about technology and future products, that Musk deemed "great". It gave Russell such a thrill, he barely slept that night.
"Basically, the entire Wall Street model just got disrupted," the self-described finance nerd said in a phone interview. His unlikely turn on the call began with HyperChange subscribers lobbying Tesla’s investor relations department and was sealed when Musk told Russell, via Twitter, that he could.
It's our usual Tesla earnings recap/analysis video with a twist! HyperChange heisted the conference call and was able to ask ~10 questions directly to Elon & Tesla management. It was unreal!
"Elon just opened a Pandora’s box, and it’s a super interesting development," Russell said. "The analysts are pissed. But analysts better step up to the plate and ask better questions or be prepared that more people like me will be on these calls."
The time that Tesla’s chairman and CEO spent with the young man did irk some of the regulars who were, after all, posing legitimate questions about Tesla, which hasn’t earned an annual profit in its 15-year history. Musk dismissed what he said were "dry" and "bonehead" queries, punctuating his put-downs by saying "they’re killing me".
Then it was dream-come-true time for Russell. Growing up as a teenager in Seattle, he read "The Snowball," a biography of Warren Buffett, and traded options and penny stocks. He graduated from New York University’s Stern School of Business in 2015. After that, he got a gig managing $500,000 for a private investor who now follows HyperChange.
The channel was launched in 2017 and has more than 13,000 subscribers. (A pumped-up Russell thanked them in a video, saying he was "basically still in complete shock" and "processing this entire epic situation".) He writes an affiliated newsletter about finance, economics, sustainability and more.
His 68-page book HyperChange: A Scheme of Consciousness, is about his view of "the modern economic era of perpetually accelerating disruption". The view being, basically, that disruption is where it’s at.
While the YouTube channel brings in money from adverts, it’s not profitable so far. Russell said that $20,000 he made selling bitcoin has largely funded the operation. "It’s really just me in my apartment, but I have a friend who helps me make videos."
They’re shot in his rental on Manhattan’s Lower East Side, without many bells or whistles and often with the window-unit air-conditioner as part of the backdrop.
Russell is a fan of Tesla; he owns 54 shares, which he bought in 2016 when the stock was at about $200. But HyperChange ventures into other areas. One recent episode explored cryptocurrencies and another is titled "Snapchat’s Q1 Trainwreck". Russell won some cred, too, by devoting a video in March 2017 to outlining why Amazon.com should buy Whole Foods Market. Amazon announced the acquisition about three months later.
On the Tesla call, Russell uttered a few lines of encouragement, including "awesome, great stuff," and "keep up the awesome work". His questions ran the gamut, such as autonomous driving, supercharging and battery projects with utilities. He wondered about plans for the Model Y, one of the next vehicles in the lineup; Musk responded that production would be likely to begin in 2020, a later date than the CEO had communicated previously, which was mentioned in analysts’ notes the next day.
Nobody seems to believe Tesla will be profitable in 2018. So we crunched some numbers.
The themes were more product-and technology-focused than those broached by the analysts, who bored in on the Model 3 production ramp, gross margins, capital expenditures and whether Musk needed, or wanted, to raise money. Investors were alarmed by Musk’s handling of the call and drove the stock down, but some liked what Russell brought to the table.
"More managements should cut off analysts who are asking the same questions over and over again, missing the forest for the trees," Cathie Wood, founder and CEO of ARK Investment Management, which holds Tesla shares, wrote in a tweet. "The line of questioning improved dramatically."
In retrospect, Russell said he wished he had squeezed in one or two nitty-gritty questions about the balance sheet. "I should have asked more about the trajectory of operating expenses and the path to profitability."
Then again, that might have made him as boring as everyone else on the line. Next time.