by Thomas Beattie
Elon Musk, business owner, investor, and CEO of SpaceX and Tesla, hasn’t failed to top our most recent news headlines. A place he seems
alarmingly comfortable at as I’m sure Tesla's shareholders will agree. But is he really the great inventor and entrepreneur that his powerful personal fortune of $20.2 billion USD, according to Forbes ‘real time billionaires ranking’ lists, suggests he is? Are Tesla really the future of cars and is Musk really carving his way into the space age history books?
There’s no doubt that Musk is a clever and talented entrepreneur. The 47 year old South-African definitely didn’t stumble across $20.2 billion and he certainly wasn’t born into it.
Musk spent his early days, with his
brother and sister, growing up in South Africa. At age 10, when his parents divorced, a diffident Musk developed an interest in computers and taught himself how to code. But is it his intelligence and innovation that gain him features in prominent news headlines? Or is it simply his brash and insubordinate behaviour? Many people hear about his early and successful business ventures and presume that Musk is a faultless money maker, and that’s the end of it. However, the same group of people are often surprised to hear that some of his business ventures are actually losing money quickly. In 1999 Musk co-founded ‘Paypal’, formerly named ‘X.com’, and then sold it to Ebay in 2002 for a sweeping $1.5 Billion in stock; Musk owned 11%. In spite of this success it was ‘Zip2’ that earned Musk his first fortune. The much acclaimed online city guide was sold for $307 million in cash and $34 million in stock options.
This is where it gets interesting. Tesla. With almost $2 billion
lost in 2017, and a reported record $710 million net loss, according to the
Guardian, as of August 1st 2018, the company is in the red. Slowly
the company say they are pushing through “production hell’ and battling against
a very competitive market. So how are they surviving? Musk is well known for
his clever personal branding and brash stunts. He certainly knows how to get
our attention and regularly features in our news headlines. Some of these
stunts are often poorly judged and do little favours for Musk's investability.
Resultantly they lose him significant amounts of money. Conversely some of his
more eye-opening stunts are pure genius. In February 2018, SpaceX enjoyed a
successful launch of the Falcon Heavy rocket, designed to carry heavy loads.
The insightful and media-savvy Musk took it a step further and strapped his own cherry-red Tesla Roadster, equipped with cameras, to the side of the rocket. You could say Musk ‘killed two birds with one stone’. This would be the perfect media stunt for Tesla and it’s worth noting that the clever inclusion of cameras gave way to stunning imagery for not only SpaceX but for Tesla as well. Born was a decadent and viral social media advertising campaign for both Tesla and SpaceX. Genius. In contrast to this, Musk is known for his controversial and brazen actions. For example, last Friday (7th September) Tesla’s stock plummeted 6% as Musk was filmed smoking marijuana on a Youtube podcast. This resulted in several executives leaving the company; the string of bad news news commanded $3 billion off Tesla’s market cap. In the same vein, Musk’s unexplained and sudden tweet, hinting at taking the company private at $420 per share, rustled the investors and Tesla’s short-sellers racked up around $1.5 billion in losses. It is clear that Musk relies on impeccable personal branding and news headlines to promote his business models. He, very effectively, becomes the face of a company and brands his companies around the idea of his lifestyle. Many more people connect with his personal image and then buy into his businesses rather than the other way round. Many articles have called for Musk’s resignation from the company and it is worth mentioning the many fake news articles that have surfaced in the last few days. These range from “Musk leaves Tesla to join Bitcoin startup?” to “Musk ousted by investors”. I think it’s safe to say that Musk won’t be leaving Tesla anytime soon - he owns 20% of Tesla’s shares and is the largest shareholder. But the sustainability of the company is a question that only the future will answer. Perhaps his secret money maker lies in the space age history books?
Round two. SpaceX. Musk founded his third company, Space
Exploration Technologies Corporation, in 2002 with the intention of building
aircraft capable of commercial space travel and conversely the company have
tweeted claiming the signing of their first round-the-moon private passenger.
In 2012, the company made history with a profound launch of its Falcon 9
rocket. President, Shotwell claims that the company is in fact profitable,
contrary to a plethora of rumors, and is now worth almost $28 billion.
However, it should be mentioned that this is after rounds of grants and
fundings from NASA and the US military. Interestingly, when asked, President
Shotwell was vague and gave no specific numbers or values perhaps speaking for
itself. However, it’s no surprise that the company have been struck by poor
judgement, in true Elon Musk style, as he lashed out on social media after his
unconventional submarine was rejected by the Thailand cave rescue divers. Musk
directed reckless accusations of paedophilia at one of the UK divers. This
resulted in an internet brawl and potential legal battle. Maybe
you need this slap-dash and reckless style of thinking to be a serial
entrepreneur these days? Whether you love him or you hate him, Musk’s current
business ventures are in the merciless hands of the market, but will he
survive?
There’s no doubt that Musk is a clever and talented entrepreneur. The 47 year old South-African definitely didn’t stumble across $20.2 billion and he certainly wasn’t born into it.
Musk spent his early days, with his
brother and sister, growing up in South Africa. At age 10, when his parents divorced, a diffident Musk developed an interest in computers and taught himself how to code. But is it his intelligence and innovation that gain him features in prominent news headlines? Or is it simply his brash and insubordinate behaviour? Many people hear about his early and successful business ventures and presume that Musk is a faultless money maker, and that’s the end of it. However, the same group of people are often surprised to hear that some of his business ventures are actually losing money quickly. In 1999 Musk co-founded ‘Paypal’, formerly named ‘X.com’, and then sold it to Ebay in 2002 for a sweeping $1.5 Billion in stock; Musk owned 11%. In spite of this success it was ‘Zip2’ that earned Musk his first fortune. The much acclaimed online city guide was sold for $307 million in cash and $34 million in stock options.
The insightful and media-savvy Musk took it a step further and strapped his own cherry-red Tesla Roadster, equipped with cameras, to the side of the rocket. You could say Musk ‘killed two birds with one stone’. This would be the perfect media stunt for Tesla and it’s worth noting that the clever inclusion of cameras gave way to stunning imagery for not only SpaceX but for Tesla as well. Born was a decadent and viral social media advertising campaign for both Tesla and SpaceX. Genius. In contrast to this, Musk is known for his controversial and brazen actions. For example, last Friday (7th September) Tesla’s stock plummeted 6% as Musk was filmed smoking marijuana on a Youtube podcast. This resulted in several executives leaving the company; the string of bad news news commanded $3 billion off Tesla’s market cap. In the same vein, Musk’s unexplained and sudden tweet, hinting at taking the company private at $420 per share, rustled the investors and Tesla’s short-sellers racked up around $1.5 billion in losses. It is clear that Musk relies on impeccable personal branding and news headlines to promote his business models. He, very effectively, becomes the face of a company and brands his companies around the idea of his lifestyle. Many more people connect with his personal image and then buy into his businesses rather than the other way round. Many articles have called for Musk’s resignation from the company and it is worth mentioning the many fake news articles that have surfaced in the last few days. These range from “Musk leaves Tesla to join Bitcoin startup?” to “Musk ousted by investors”. I think it’s safe to say that Musk won’t be leaving Tesla anytime soon - he owns 20% of Tesla’s shares and is the largest shareholder. But the sustainability of the company is a question that only the future will answer. Perhaps his secret money maker lies in the space age history books?
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