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And he will quite likely die with less than $100 cash to his name.
by vidanay 6y ago
And he will quite likely die with less than $100 cash to his name.
- the-dude 6y agoPlease explain.
- vidanay 6y agoHe believes passionately in everything he does and he literally puts all of his money (and then some) into his endeavors. He is rumored to be the most cash-poor of any multi-billionaire because he has leveraged it all to achieve his goals.
- bryanlarsen 6y agoElon never sells stock. He borrows from the bank to support his lifestyle, and to exercise his stock options. He has billions of dollars in debt using his stock as collateral.
- dgudkov 6y agoWhich is absolutely the right thing to do if you believe in what you're doing. Because ROI on investment in your own company must be much greater than the interest you pay for the loan. If you don't believe that the company you've founded and are actively managing can produce a better ROI than an regular bank loan then you are wasting your time.
- danpalmer 6y agoThat’s what the Enron CEO did, and his finances came crashing down with the company’s share price.
- runawaybottle 6y agoBut Enron CEO was running a scam.
- danpalmer 6y agoI'd recommend the book "The Smartest Guys in the Room", it goes into detail about the financial engineering. Yes it was decided in the end that it was fraudulent, but it took a while for that to become clear. Technically, much of what they did wasn't illegal and it wasn't even obvious at the time whether it was smart or stupid. For me the most interesting part was the culture, and assumption that they couldn't fail. Because of this Ken Lay (CEO) continued to leverage himself personally against the Enron share price again and again. When told to diversify with other investments, rather than sell Enron shares and buy others, he instead took out loans against his Enron shares to buy others. He was in effect trying to "have his cake and eat it too". Ultimately once the Enron share price fell enough, it caused the whole house of cards to come crashing down as contract after contract, both for Lay and Enron, triggered pay-out conditions, and they all ended up bankrupt. I hope this doesn't end badly for Musk, but he should probably be diversified enough to protect himself against Tesla's share price declining, and it will be interesting when SpaceX gets to an IPO, whether his personal leverage may affect whether he chooses to take it public or at what price.