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The Boring Company raises $112M from Musk, early employees
- rory096 9y ago>Who’s behind the $112.5 Million In fundraising for The Boring Company? >Over 90% came from Elon Musk, with the rest from early employees. No venture capitalists or outside investors are involved according to the company. https://twitter.com/Lebeaucarnews/status/985994145805238273 https://twitter.com/Lebeaucarnews/status/985994145805238273
- rajacombinator 9y agoOdd ... why put your own money at risk when you have access to unlimited blank checks? Some kind of weird personal asset defense play?
- staticautomatic 9y agoMaybe he no longer has access to unlimited blank checks...
- rajacombinator 9y agoEven the most cynical TSLA shorter would be insane not to throw money at a brand new Elon Musk venture. (If they have any left, shorting TSLA is an expensive hobby.)
- prklmn 9y agoThat’s not really true. The stock is flat over the past year. To be a musk investor now, you have to accept that you’re late to the party, and enjoy buying into rich valuations with a lot of hype baked in.
- kjksf 9y agoWhat is not true? The nature of shorting is that you make money only when stock drops significantly in a short period of time. If stock is flat, you loose your money. All of it. If stock drops less than premium you paid for the option, you loose money. If stock drops a day after your option expiration date, you loose money. This year there were a couple of dips (~20% in short period of time) where you could have made money shorting. Caveat: if you timed it perfectly and good luck with that. To put real numbers: a 3 month short will cost you about 10% of stock price. To make money stock price would have to drop more than 10% and you would have to execute the short at the right time in that 3 month window (as opposed to waiting for even bigger drop and loosing because the stock went up). Even with TSLA stock gyrations in the last year, that's a bet very unlikely to have been profitable for most people.
- tc313 9y agoYou’re talking about buying puts, which is different from shorting the stock. If you short a stock that stays flat, you’re out your borrowing costs but nothing more.
- prklmn 9y agoAlso you could have sold long dated call spreads for most of the year - effectively shorting the stock with some profit to show for it. Edit: you’re also more likely to have lost money buying Tesla over the past year vs shorting it, so it really hasn’t been “expensive” to short it.
- asdsa5325 9y agoYou seem to be confused between short selling and puts.
- staticautomatic 9y agoI genuinely don't understand why this comment was down-voted.
- hndamien 9y agoMaybe he sees a large upside, and enjoys control.
- ghayes 9y agoI believe this has always been Elon Musk's strategy. Double down on his own projects. He's been pretty successful at it, as yet.
- olivermarks 9y agoMy first thought was that this might be to protect Musk's assets if Tesla/SolarCity etc run out of cash, go belly up etc. Parking his wealth in yet another early stage entity would make it harder to go after if structured cleverly?
- icebraining 9y agoThe point of a limit corporation is that the shareholders are not personally liable for the company's debts. There are exceptions (usually related to the shareholders using corporate money for their personal purposes), but they're rare, and in any case I don't think this would protect him, since the shares in the Boring Company are themselves assets.
- zghst 9y agoI'd say someone like Musk can be perceived to get caught up in their vision of the future so much that they are out of touch with the broader market and trends; however congestion is of the top issues of the 2nd largest city in the US. Boring under LA to relieve congestion creates a MASSIVE opportunity that, when refined, can be deployed into other markets and eventually used in space. It's a genius move. Musk is a definite bad ass.
- sbinthree 9y agoI have no idea why people take outside money. If you can't afford to build it, start smaller, get rich, go bigger. What is the purpose of personal capital if not to bet on yourself?
- JumpCrisscross 9y ago> I have no idea why people take outside money. If you can't afford to build it, start smaller, get rich, go bigger 1. To diversify their finances. Going all in means every bet, if it fails, could be your last. (Less applicable for someone with Elon's name recognition.) 2. Some ideas don't scale down. Building a big rocket is a different game from building a small one. The lessons from the latter will apply roughly, at best, to the former. Same with tunnels. 3. To get intellectual and political buy-in. When people invest in something, they take ownership--financially and emotionally. Having shareholders who you can deputies to fight your battles can sometimes beat a hired hand.
- sbinthree 9y agoI think your second point is the most valid and hard to argue counter argument. I agree, there are things that simply require more capital than people have in their bank. I disagree that diversifying is virtuous unless there is a good reason to. Make the government your customer and your work will always be legal, not so for investors (see: countries "cleaning up" their portfolios, people still use gas though).
- repsilat 9y agoYou take funding because you think it'll increase your personal rate of wealth increase. Loans are the simplest to understand -- it's leverage. If you think you can double your money in a few years with a business plan, and that opportunity scales passably well to more money than you have in your bank account, you can take out a loan. To use your language, leverage is just "betting on yourself" even harder. Taking on investors is different in that you can't ruin yourself doing it, but similar in that it increases your resources in a way that you hope will more than pay off over time against the cost.
- hinkley 9y agoPart of what ruins companies you used to like is the money people get board memberships and have ideas about how fast they should be able to cart away the wheelbarrows full of cash.
- paulsutter 9y agoControl, it's less work, and Elon is so successful that he doesn't need to worry about the signaling risk of putting in his own money.
- aerovistae 9y agoTotal opposite way of how Musk thinks. He despises this attitude. He has said multiple times, if you won't risk your own money, what right do you have to risk someone else's? To him that's unethical. I agree.
- rajacombinator 9y agoGood point, he is reckless!
- randyrand 9y agoHe didn't let friends invest in SpaceX early on because he didn't want to lose their money. Perhaps this is similar.
- marze 9y ago$100M. Same amount at Musk’s personal investment in both SpaceX and in Tesla.
- aerovistae 9y agoSame initial investment. Both Tesla and SpaceX have far more from him now.
- marze 9y agoReally? Musk started with $200M from PayPal, invested half in each, according to reports. There is nothing left to invest after doing that.
- keyle 9y agoWhat does the boring company make? I saw bits of it as a bit of a joke... ? Is it Musk's approach of making a traditional company and flipping it on its head?
- aerovistae 9y agothey make tunnels and outfit them for various modes of transportation. it's not a joke. i can't imagine any better way to make it clear that something isn't a joke than to put $100 million into it.
- dx034 9y agoIs $100m really enough to build a state of the art boring machine and get all equipment/labour to actually build a tunnel?
- aerovistae 9y agoI have no idea what $100m is enough for, all I know is that Elon Musk gets more done per dollar than anyone else alive.
- AsyncAwait 9y agoReally? Care to give some examples?
- aerovistae 9y agoYes, SpaceX and Tesla.
- AsyncAwait 9y agoYou said words, but there's no substance, how does SpaceX and Tesla in any way prove that "Elon Musk gets more done per dollar than anyone else alive" exactly?
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- capkutay 9y agoI hope that this would be a boon for transit costs in America which are ridiculous compared to Europe [0]. But part of the problem lies with transit advocates in the US, who think tech and Elon Musk are a threat to transit. [1] 0: https://www.nytimes.com/2018/03/28/nyregion/new-york-subway-construction-costs-congress.html?mtrref=www.google.com&gwh=CEC730A179DCBAF18A6F6273514862D7&gwt=pay https://www.nytimes.com/2018/03/28/nyregion/new-york-subway-... 1: https://twitter.com/humantransit/status/941386665519595521 https://twitter.com/humantransit/status/941386665519595521
- jcranmer 9y agoThe largest reason for the high construction costs is probably union featherbedding and contractual mismanagement [0]. There's no indication that The Boring Company is capable of meaningful cost reduction in this regard. The actual cost of physical material in constructing tunnels is a relatively small cost of the project (note that most of the cost in a subway isn't the subway tunnels themselves, it's the subway stations). The only meaningful idea I've seen about cutting costs from The Boring Company is recovering TBMs, which strongly suggests there's no sense of why tunnels themselves cost money [1]. If Musk just talked about being able to build tunnels cheaper, even transit enthusiasts would have a hard time bringing themselves to care. But between Hyperloop and his underground road conveyance thingy, it's quite clear that he has no idea how to build any high-capacity transit [2]. It seems as if he cares far more about "how do I get me from A to B most effectively" rather than "how do I get a million people from A to B most effectively," and moreover, that he doesn't even realize that those are different questions that necessitate different answers. [0] https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-... [1] TBMs are largely unrecovered because it costs too much to recover them. You can't back them up without risking geological stability of the above ground, and digging a cut-and-cover shaft to reach them is quite expensive. [2] On fixed-guideway systems, the capacity is largely dictated by station dwell time and switch fouling time, which governs the minimum headway between adjacent consists. Consequently, you need high capacity through consist to get any meaningful capacity. But the Hyperloop pods and the road sleds both envision ultra-low consist capacity, consequently killing total throughput. Incidentally, higher speeds also reduce capacity.
- bobsil1 9y agoGuess merch funding wasn't enough :)
- dixie_land 9y agosure let's ban AR15s and give our money to a flamethrower company
- Grovara123 9y agoGuaranteed this is an Artificial Intelligence company.
- Trisell 9y agoI think the huge thing that most people miss is that Elon isn’t trying to fix the earth’s problems. Elon is using the earth and other people’s money to bootstrap all of the things he needs to live on Mars. Every single one of his projects is in some facet working on a tech that is needed on Mars. SpaceX gets you there. Tesla gets you around there and batteries store power. Solar City because batteries. Boring Company to dig tunnels and create radiation safe locations for humans on mars. Hyperloop cross country transport that doesn’t work well in our atmosphere but makes much more sense on Mars. I think he is all consumed by his vision of humans surviving on mars and thriving. And when you look at things from this view suddenly his crazy becomes less crazy.
- piinbinary 9y agoGiven that framing, I wonder if he will start on food production soon
- rangibaby 9y agoIndoor food production(greenhouses, hydroponics, 3d farms) is already solved on Earth. I think the infrastructure to support it is the hard part.
- hndamien 9y agoHis brother does that. https://www.nytimes.com/2017/10/16/dining/kimbal-musk-food.html https://www.nytimes.com/2017/10/16/dining/kimbal-musk-food.h...
- Robotbeat 9y agoHis brother, Kimbal, is involved with square Roots, doing modular LED hydroponics systems for growing local fresh veggies anywhere.
- leesalminen 9y agoHis restaurants in Boulder Colorado are great. https://www.thekitchenbistros.com/ https://www.thekitchenbistros.com/
- nodesocket 9y agoElon is doing way too much context switching between Tesla, SpaceX, and The Boring Company even though he is no ordinary human. Recently in an interview he said he was sleeping on the factory floor of Tesla because he didn't have time to go home. That's going to lead to burnout, mental and physical issues. I am a big advocate of work smarter not harder.
- twtw 9y agoI'm a big advocate of "don't tell people what to do." Musk seems to have a pretty good handle on his own limits. He's been doing crazy work hours and sleeping under his desk occasionally for over a decade. Just because it hits the news doesn't mean he should change his habits if it works for him.
- simonebrunozzi 9y agoSome back of the napkin calculation that I made some months ago, hopefully still useful to think about where the Boring Company is going : https://medium.com/the-naked-founder/elon-musks-boring-company-is-boring-for-now-f778d382971b https://medium.com/the-naked-founder/elon-musks-boring-compa...
- dx034 9y agoNice article but I would point out that many of the very long and/or deep tunnels are built for railroads instead of cars, precisely to lower the diameter necessary (no exhaust needed, no hard shoulder).
- Animats 9y agoIf they ever develop a cheaper tunneling technology, they could bid on some sections of the Tokyo to Osaka maglev. That's under construction now. For one tunnel, 5 meters a day, 25000 meters to go. Test trains have been running on a 41km track for years. 500km/h is normal cruising speed. They've reached 600km/h in tests.
- tigershark 9y agoThat seems freakishly slow. It’s only 1.8 km per year. Crossrail in London was built at least 1 order of magnitude faster.
- opencl 9y agoThe Japanese tracks are going through a bunch of mountains.
- kamaal 9y agoIn India, cheaper tunneling technology would be a boon the impossibly chaotic cities. Acquiring private properties to build urban metro transit systems is prohibitively expensive and so is tunneling. A cheaper tunneling technology would be very much solving plenty of transit problems in a country like India. I hear TBMs are just crazy expensive. They used two TBMs for the Bangalore Metro. One broke down and it took them months to fix it. As of now cheaper tunneling tech would be the greatest thing ever for may cities in non developed countries.
- rohit2412 9y agoI'm surprised they used tbm in Bangalore, but I think tbm aren't required. Cut and cover works well and is primarily used For example, Mumbai Metro's line 3 is totally underground, and is in the costliest City of India. It is planned at 3.5 billion $ for 33 know. Around 100 million $ per km. And this includes the cost of stations, rails etc. In comparison, recently completed Delhi metro phase 4 took 6.7 billion $ for 100 km at 67 million $ a km. A proposed Delhi metro project to UP outside the city (and hence cheaper) is around 1 billion $ for 35 km (and fewer stations). From the looks of it, I don't think cut and cover for making tunnels has any significant expense at all. It looks like India can construct metros (including stations which are the bigger costs) at 30 million $ per km. This is far lower than the tunneling costs of 100 million $ per mile that Elon plans to achieve, and 1 billion $ / mile that he thinks it costs (it doesn't, the major cost is stations and labor, and he can't bypass unions with political access). https://en.m.wikipedia.org/wiki/Line_3_(Mumbai_Metro) https://en.m.wikipedia.org/wiki/Line_3_(Mumbai_Metro) https://en.m.wikipedia.org/wiki/Delhi_Metro https://en.m.wikipedia.org/wiki/Delhi_Metro Edit: Looks like India does use tbm. The cited Mumbai metro line is using 17 tbm. https://m.hindustantimes.com/mumbai-news/tunnel-boring-machines-used-for-mumbai-metro-work-named-after-rivers/story-xdnu6LoI9bKxs65RkX1VXI_amp.html https://m.hindustantimes.com/mumbai-news/tunnel-boring-machi...
- Symmetry 9y agoElon is getting into a lot of high risk ventures. That's good, people ought to push themselves and if someone in his position never fails they probably aren't challenging themselves enough. But I hope that he's able to let go if this does fail, instead of having Tesla buy the company or something a la Solar City.
- deleted 9y ago[deleted]
- samnwa 9y agoHow do I get in on this investment??
- asdsa5325 9y agoBe Elon Musk or an early employee.