Forbes says that Elon Musk is worth $15 billion, the 80th richest man in the world. Where does his money come from? As far as I can tell his last business that actually made money was PayPal and he certainly didn’t get $15 billion from his PayPal stock.
So, where does the money come from?
Trick question since his worth is mostly on paper.
I hear the sound of 10,000 trombones in that valuation.
For extra credit (hah!) Explain Jeff Bezos’ wealth. Or Sergei Brin’s.
Rather more seriously, these guys own assets such as car- and space launch vehicle factories and thousands of warehouses around the world and a bazillion computers tapped a couple dozen times per day by virtually everyone in the world. Yeah, you can argue that those aren’t “real” because a couple of adverse court decisions or a bad economic climate or a shift in personnel in various regulatory agencies might cause the apparent market value of those assets to fall through the floor — but you could have said that of John D. Rockefeller a century back or Andrew Carnegie back in the 1870’s.
They are far less egregious examples. I think the only workable explanation of Elon Musk is that he is a rent-seeking con man who has used being merely wealthy to promote himself into the ranks of the ultra-rich.
The value of assets that do not, or have little prospect of, generating free cash flow is measured by the pound. Same for the pieces of paper establishing claims on that cash flow.
The willingness of some to ascribe – more importantly, pay – for such claims is pure speculation and testament to the salesmanship of the seller and gullibility of the buyer.
Price is what you pay. Value is what you receive.
It’s amazing how persistent the “true price” theory is. Somebody makes a comment based on it in almost every comments thread.
Hmmm … Bill Gates and Warren Buffett may be “ultra-rich”. Jeff Bezos, maybe also. I think of Musk as somebody with perhaps 20 billion bucks of assets, 19.9 billion bucks of debts and impending loans — he’s in good shape until or unless the music stops.
Which could happen, of course. Other hand, if a heart attack or auto accident or an outraged husband with a gun in his hand were to do in Musk, the space launch business in future years would be shaped by the existence of SpaceX, the auto manufacturing business will be shaped by Tesla, solar power and energy storage will show the influence of SolarCity, etc. Something may yet come of Neurolink and Hyper-loop and The Boring Company. This is a looo-oong way from Ponzi schemes and televangelism and selling gold coins to nervous elderly investors in Ron Paul’s newsletters.
Your formulation doesn’t include the grants he’s received. He’s received 5 billion in loans and another 15 billion in additional investments and loans on the basis of the 5 billion.
This is one of the areas in which I part ways from Republicans and libertarians. I don’t think that government at any level should be giving large amounts of money to individuals or corporations. I think it should be hiring employees or taking equity stakes.