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>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 capitalis
by 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.