Well, yes, obviously, he owns a significant portion of the company’s stock and so his paper losses, from that recent peak, are substantial. But paper losses are just paper losses. What matters rather more is financing the form as a whole. And at that point current events are just quite darling:
Tesla loses a third of its value in a week after missing out on S&P 500
Shares fall by more than 20pc in worst day on record in sharp reversal after electric car maker’s hot streak
Well, yes, OK, so it didn’t make the S&P 500 and GM is to hook up with Nikola to manufacture and all that. That second being quite a big thing actually as it’s being able to manufacture, in volume, accurately, which is both the secret to vehicles and also what Tesla hasn’t been all that hot upon.
So, why be happy and don’t worry? Because this:
Tesla Inc. TSLA, -21.06% disclosed Tuesday that the $5.0 billion stock offering announced last week was completed on Sept. 4. The electric vehicle maker said the final settlement of the offering is expected to be completed on Sept. 9. Since closing at a record $498.32 last Monday, Tesla announced the stock offering on Sept. 1, helping trigger a selloff, in which the stock closed Friday 16.1% below Monday’s record.
They got the stock offering away at the peak of the bubble. Which is great, excellent even. They sold stock at what, 25%, 30%, more than it was worth a week later.
Don’t forget, success in selling stock is defined as getting a high price for it, not that it rises after you’ve sold it…..
Indeed, why would Musk care? Um, because he went into business with the goal of advancing himself through the hierarchy of the world’s paper billionaires? Probably not.
So Elon has become a billionaire while running a big loss-making company. Since the dot com era, that’s par for the course. (In the days of my misguided youth it used to be called a ripoff, but things have changed.)
This does rather explain why his businesses all seem to produce cool, woke products.
This is not unusual, not recent, and not a ripoff. All people crawl before we walk, and all companies are money-losers before they catch on and become money-makers. This usually means getting huge. Executives of a money-losing company receive stock, because the money is tight, and deliberately so they have a stake in the company’s success. Elon has become a billionaire (on paper) because Tesla seems to be turning the corner – because of Elon.