In an earnings call last week, Tesla co-founder Musk criticized so-called “moats” but he wasn’t referring to the sort of moat you’d find around a castle. Instead, he was talking about the term coined by Buffett, referring to a buffer that companies need surrounding them to help them maintain a competitive edge. According to Musk, “the pace of innovation” is more important.
But Buffett shot back on Saturday, arguing that companies with strong, sustainable moats do exist and that technology has not destroyed them in every industry. The billionaire investor and CEO of Berkshire Hathaway quipped: “Elon may turn things upside down in some areas. I don’t think he’d want to take us on in candy.” Berkshire Hathaway owns See’s Candies.
Following Buffett’s comments, Musk said on Twitter that he was “super super serious” about starting his own candy company.
Berkshire Hathaway bought See’s Candies in 1972 and is still the confectioner’s parent company to this day.
Musk’s comment about starting a See’s competitor might not come as a surprise to many. He has previously fulfilled promises, ranging from building the world’s largest lithium ion battery plant to selling flamethrowers via his tunneling firm The Boring Company.
But the billionaire’s pledge to start a candy company comes at a time when intense criticism pours over his management of Tesla. The electric carmaker reported a lower-than-expected loss in the first quarter last week but analysts worry that the amount of money the firm burns through might mean it needs to raise more funds in the near future.
Some were unimpressed by Musk’s handling of a conference call with analysts following Tesla’s financial statement, in which he called a question from one analyst “boring.” Musk ignored one question on the production of the company’s Model 3 cars, instead moving to answer questions from Galileo Russell, a YouTube user and Tesla enthusiast.