The Musk Empire
Love him or hate him, Elon Musk has emerged as one of the most brilliant business and engineering minds of this generation. Many of his supporters compare his achievements with Thomas Edison, but Leonardo Da Vinci could be a more appropriate comparison. Aside from his innovations, Mr. Musk’s success as Tesla’s CEO has been astounding. His EV company recently exceeded market expectations, reporting EPS of $3.22 versus the market’s expectations of $2.26 per share. Q1 2022 revenues of $18.76 billion were above the $17.80 billion forecasts.
Elon Musk is the world’s wealthiest person, and his interests run far beyond the EV world. Space, social media, transportation logistics, cryptocurrencies, and other projects are under his umbrella.
Meanwhile, Elon is a character who pushes the envelope. He has smoked pot on a podcast with Joe Rogan, taken on regulators, senators, and even Presidents. He helped the besieged Ukrainian government as Russian troops invaded. His latest project was to wrestle control of the world’s leading social media company from its Board of Directors. Bet against Elon Musk at your risk because he finds a way to emerge victoriously.
Elon’s current empire
- Tesla (TSLA) is the crown jewel. At the $870 per share level, the EV company had just over a $900 billion market cap.
- SpaceX is a leading space exploration company worth over $100 billion and is privately held.
- The Boring Company is a pick-and-shovel infrastructure and logistics company worth around $5.7 billion.
- NeuraLink develops implantable brain-machine interfaces.
- Open AI is an artificial intelligence research laboratory with for-profit and non-profit subsidiaries.
- com was an online bank co-founded by Elon Musk and partners in 1999. In March 2000, X.com merged with competitor Confinity Inc, a Silicon Valley software company.
- Elon Musk made his first substantial money from being a PayPal (PYPL) founder.
- Elon Musk bought Twitter (TWTR) for $44 billion and plans to take the company private.
Elon is a problem solver and a crypto file
- He is an engineer, entrepreneur, and investor.
- His management style is hands-on and transformational- Outlining and executing strategies that make visions reality.
- Elon’s three rules for managers are to show why he’s wrong, ask for clarification, or execute the order.
- Unlike many CEOs, Elon Musk gets into the weeds with managers of his businesses.
- Elon believes in cryptocurrencies, but he is sensitive to energy requirements, favoring proof of stake over energy-intensive proof of work protocols.
- Musk has a soft spot for Dogecoin and has influenced prices via social media comments.
Ideology makes profit secondary to his Twitter interest
- Elon Musk is worth approximately $265 billion, around $100 billion more than Jeff Bezos, the second-wealthiest person.
- Elon Musk views Twitter as a “town square” and is committed to free speech with less content moderation.
- Twitter founder, Jack Dorsey, said, “Elon is the singular solution I trust.”
- $44 billion or $54.20 per share was nearly 38% above the pre-bid share price at $39.31 on April 1.
A poison pill was a bluff to buy time
- The Twitter board of directors initially used a “poison pill strategy to discourage Elon Musk.
- The “poison pill” was a failed bluff.
- After scrambling to find an alternative buyer, the board’s fiduciary responsibility to shareholders forced it to accept the bid on April 25.
Regulators will now poke holes
- The SEC will need to approve the Twitter deal.
- On April 25, Elon Musk called the SEC’s San Francisco office “shameless puppets of Wall Street short-seller sharks.” He said the SEC does “nothing to protect actual shareholders.”
- There is no love lost between regulators and Elon Musk.
- Betting against Mr. Musk has not been a profitable road.
- With a net worth of over a quarter of a trillion dollars, the Musk Empire continues to grow.
Thanks for reading, and stay tuned for the next edition of the Tradier Rundown!