Musk's asset accrual and paying for Mars

[Slarty1080]

Musk said somewhere that he was accruing assets on Earth to help pay for his Mars plans. Is this just a matter of building Tesla up to a Trillion dollar company and then selling some of his share to finance or part finance Mars or has he some other revenue streams planned that would pay for it?

I know Starlink is a part of it but I think that is a separate issue from Musk himself, no doubt he will need serious amounts of cash going forward as the capital cost of a lot of Starships plus thousands of launches etc etc is going to mount up with no big pay back at least initially.

zubenelgenubi: corrected thread title spelling and grammar

[jstrotha0975]

I look for Elon's The Boring Company to take off in the middle of this decade. Boring tunnels have way more uses than underground traveling, can be used for utilities such as sewers and water.  The BoCo is cheaper and faster than other tunnel companies. Also, would like to see Elon create a city of the future with solar/battery power, BoCo transportation and utilities, and driverless cars and AI.

[Slarty1080]

I look for Elon's The Boring Company to take off in the middle of this decade. Boring tunnels have way more uses than underground traveling, can be used for utilities such as sewers and water.  The BoCo is cheaper and faster than other tunnel companies. Also, would like to see Elon create a city of the future with solar/battery power, BoCo transportation and utilities, and driverless cars and AI.

Does Elon own TBC?

[ChrisWilson68]

I look for Elon's The Boring Company to take off in the middle of this decade. Boring tunnels have way more uses than underground traveling, can be used for utilities such as sewers and water.  The BoCo is cheaper and faster than other tunnel companies. Also, would like to see Elon create a city of the future with solar/battery power, BoCo transportation and utilities, and driverless cars and AI.

Does Elon own TBC?

You might want to spend 10 seconds checking for yourself before you ask lots of people on NSF to answer your question.

https://en.wikipedia.org/wiki/The_Boring_Company

The Boring Company was initially formed in 2017 as a subsidiary of SpaceX, becoming a separate and fully independent company in 2018. As of December 2018, 90% of the equity was owned by Musk,[5] with 6% held by SpaceX as return for the use of SpaceX resources during the initial startup of the company.[6] Outside investments during 2019 have changed the equity split.

[Tulse]

I very much doubt that TBC will be a big money-maker in the near future. Most applicable uses involve extensive political negotiations with municipalities and regions, and highly dependent on other partners, which is not the road to quick riches. In any case, I'm not sure that tunnel digging is likely to be a high-margin enterprise -- creating local transit infrastructure rarely is.

Starlink is much more likely to be Musk's cash cow.

[ChrisWilson68]

I very much doubt that TBC will be a big money-maker in the near future. Most applicable uses involve extensive political negotiations with municipalities and regions, and highly dependent on other partners, which is not the road to quick riches. In any case, I'm not sure that tunnel digging is likely to be a high-margin enterprise -- creating local transit infrastructure rarely is.

Starlink is much more likely to be Musk's cash cow.

I agree that Starlink and Tesla are more likely to be cash cows for Musk.

But I don't agree that businesses involving deals with political bodies aren't a road to quick riches.  On the contrary, many people have made easy money this way.  Among the many examples are cable monopolies granted by local governments, non-competed bulk buys of national security launches, and SLS.

[FutureSpaceTourist]

Musk said somewhere that he was accruing assets on Earth to help pay for his Mars plans.

https://twitter.com/elonmusk/status/1217995711196778497

Helping to pay for this is why I’m accumulating assets on Earth.

[Ludus]

Musk isn’t an investor. His only assets are the companies he starts and controls so paying for Mars is about what he plans to do with Tesla and SpaceX (with TBC and Neuralink more hobby scale currently).

Tesla has plans that are influencing it’s stock price even now (It’s got the second highest market cap of any auto company after Toyota) It can be a multi Trillion dollar market cap company if it succeeds with Tesla Network robotaxis.

SpaceX Starlink has lot’s of paths to generating vast wealth too. Consider Financial Data & Analytics - dominated by Bloomberg and Thompson-Reuters. Bloomberg bills about $2000/month to over 325,000 users. Reuters a bit less to about 200,000.  Suppose Elon went after their market with a Starlink subsidiary. Many startups have tried and failed. It’s not that hard however for Elon to duplicate the Bloomberg terminal functionality and Starlink gives his version a killer advantage. It’s faster. If you don’t subscribe your competition will get critical information before you do. Other FD&A  platforms can’t match it because Starlink has it’s own end to end internet and light travels faster in a vacuum than in fiber even if there was fiber in the direct path you need (which there isn’t). It’s an offer they can’t refuse. FOMO would let them take over the global market for FD&A.

FD&A doesn’t need much of Starlink’s capacity, it’s just alphanumeric data, it just needs to have routing priority for the lowest latency. In return it would yield billions in steady income for SpaceX to invest elsewhere. What’s it called? Elon has X.com sitting around doing nothing but returning a lowercase x. That would work as well as being a reference to his return to global finance that he got forced out of a couple decades ago.

Probably all wrong but an example of possible paths.

[M.E.T.]

Musk’s shares in Tesla will max out at around $200bn in the 10-15 year timespan we are looking at, assuming it gets to around a trillion dollar market cap.

His shares in SpaceX have the potential to go further. Starlink can take SpaceX to maybe a $200bn value, approximately half of which is owned by Musk.

If they move into asteroid mining thereafter, the sky is the limit.

[FutureSpaceTourist]

Elon Musk May Bank The Biggest Payday Of His Life During Global Pandemic
Alan Ohnsman  Forbes Staff
Transportation

Elon Musk has achieved remarkable and unexpected things with Tesla TSLA  in the 16 years since his electric-car maker debuted its first prototype. Add to that list the likelihood the billionaire entrepreneur is closing in on the last requirements to win a stock jackpot worth $600 million or more–in the middle of what’s shaping up to be the worst economic slump since the Great Depression.

https://www.forbes.com/sites/alanohnsman/2020/04/27/elon-musk-may-bank-the-biggest-payday-of-his-life-during-global-pandemic/

[wannamoonbase]

Musk’s shares in Tesla will max out at around $200bn in the 10-15 year timespan we are looking at, assuming it gets to around a trillion dollar market cap.

His shares in SpaceX have the potential to go further. Starlink can take SpaceX to maybe a $200bn value, approximately half of which is owned by Musk.

If they move into asteroid mining thereafter, the sky is the limit.

With his pending Tesla payday, I thought, that if it is urgently needed that he might sell Tesla shares to get more shares of SpaceX and fund SH/SS and Starlink.  Once both of those projects are generating revenue then they should be able to fund themselves.

But with the hype and EM's connections if SpaceX needs money I'm sure they'll be able to raise it.

[guckyfan]

Musk’s shares in Tesla will max out at around $200bn in the 10-15 year timespan we are looking at, assuming it gets to around a trillion dollar market cap.

His shares in SpaceX have the potential to go further. Starlink can take SpaceX to maybe a $200bn value, approximately half of which is owned by Musk.

If they move into asteroid mining thereafter, the sky is the limit.

With his pending Tesla payday, I thought, that if it is urgently needed that he might sell Tesla shares to get more shares of SpaceX and fund SH/SS and Starlink.  Once both of those projects are generating revenue then they should be able to fund themselves.

But with the hype and EM's connections if SpaceX needs money I'm sure they'll be able to raise it.

No doubt they can raise needed money. But Elon Musk may want to regain 50% of all shares.

[RedLineTrain]

Regarding Musk's pending payday, perhaps it will be a while longer before the first tranche is accrued.  In response to the coronavirus, Tesla suspended stock compensation as well as gave salary haircuts between 10%-30%.  It is unclear whether Musk's stock compensation also falls under that delay, but it would make sense that it does.

[M.E.T.]

There is of course an argument for Musk to sell his shares in Tesla and invest the approximately $25 billion proceeds into SpaceX immediately. That could certainly guarantee maximum funding for the completion of both Starship and Starlink in rapid speed, with plenty to spare.

That could create a scenario where in perhaps 2 years time Starship is fully operational, and Starlink is fully rolled out, with SpaceX dominating both the launch and satellite internet industries - perhaps generating $30 billion a year in revenue with plenty of cash in the bank left over.

That’s if Musk realises - as Zubrin said recently - that he doesn’t have forever and has to choose between Tesla and Mars in his lifetime. Focusing all his time and resources on SpaceX would be the best way to achieve that.

[ChrisWilson68]

There is of course an argument for Musk to sell his shares in Tesla and invest the approximately $25 billion proceeds into SpaceX immediately. That could certainly guarantee maximum funding for the completion of both Starship and Starlink in rapid speed, with plenty to spare.

That could create a scenario where in perhaps 2 years time Starship is fully operational, and Starlink is fully rolled out, with SpaceX dominating both the launch and satellite internet industries - perhaps generating $30 billion a year in revenue with plenty of cash in the bank left over.

That’s if Musk realises - as Zubrin said recently - that he doesn’t have forever and has to choose between Tesla and Mars in his lifetime. Focusing all his time and resources on SpaceX would be the best way to achieve that.

Musk could not get $25 billion by selling all his shares of Tesla now, because as soon as he started selling the stock price of Tesla would tank, for two reasons:

  1. A flood of new supply of shares on the market always causes prices to go down.

  2. A lot of people would lose confidence in the future of Tesla if they thought that either Musk might not believe the future of Tesla was bright or he was stepping away from involvement in the company, because a lot of confidence in Tesla comes from confidence in Musk as an exceptional leader.

To get value out of Tesla, Musk has to sell shares slowly, over a long period of time.

Reason 2 above applies even if Musk doesn't sell Tesla shares at all but just cuts back on his involvement in the company to focus more on SpaceX.

Musk has been splitting his time between SpaceX and Tesla for many years now and it has worked out well for both companies.  If he cares most about colonizing Mars, his best course is to continue doing that.

[M.E.T.]

There is of course an argument for Musk to sell his shares in Tesla and invest the approximately $25 billion proceeds into SpaceX immediately. That could certainly guarantee maximum funding for the completion of both Starship and Starlink in rapid speed, with plenty to spare.

That could create a scenario where in perhaps 2 years time Starship is fully operational, and Starlink is fully rolled out, with SpaceX dominating both the launch and satellite internet industries - perhaps generating $30 billion a year in revenue with plenty of cash in the bank left over.

That’s if Musk realises - as Zubrin said recently - that he doesn’t have forever and has to choose between Tesla and Mars in his lifetime. Focusing all his time and resources on SpaceX would be the best way to achieve that.

Musk could not get $25 billion by selling all his shares of Tesla now, because as soon as he started selling the stock price of Tesla would tank, for two reasons:

  1. A flood of new supply of shares on the market always causes prices to go down.

  2. A lot of people would lose confidence in the future of Tesla if they thought that either Musk might not believe the future of Tesla was bright or he was stepping away from involvement in the company, because a lot of confidence in Tesla comes from confidence in Musk as an exceptional leader.

To get value out of Tesla, Musk has to sell shares slowly, over a long period of time.

Reason 2 above applies even if Musk doesn't sell Tesla shares at all but just cuts back on his involvement in the company to focus more on SpaceX.

Musk has been splitting his time between SpaceX and Tesla for many years now and it has worked out well for both companies.  If he cares most about colonizing Mars, his best course is to continue doing that.

Selling a billion dollars of shares a year like Bezos does would be more than sufficient and would retain a stake in Tesla for a good 20 years or so.

[RedLineTrain]

Not happening, since Musk has said that he's the last capital out of Tesla.  Nowadays, we have borrowing on your equity, which preserves this investment, is tax efficient, and cheap.

[M.E.T.]

Not happening, since Musk has said that he's the last capital out of Tesla.  Nowadays, we have borrowing on your equity, which preserves this investment, is tax efficient, and cheap.

He’s also said the reason he is accumulating assets on earth is to fund Mars. So at some point he will have to extract that capital. You can’t borrow against 100% of it. More like 50% max.

[laszlo]

This all assumes that a traditional car company that produces in two weeks what it takes Tesla all year to make doesn't eat Tesla's lunch with a cheaper model that can be driven home off the lot on the same day. Or that the SEC doesn't get tired of Musk's antics and give him an extended time out this time.

[M.E.T.]

This all assumes that a traditional car company that produces in two weeks what it takes Tesla all year to make doesn't eat Tesla's lunch with a cheaper model that can be driven home off the lot on the same day. Or that the SEC doesn't get tired of Musk's antics and give him an extended time out this time.

If the SEC forces him out that is the perfect excuse to sell his shares and focus all his efforts (and capital) on SpaceX.