12 ms·

Elon Musk becomes world’s richest person as wealth tops $185B

94 points by headalgorithm 6y ago

lend000 6y ago
If this isn't an efficient allocation of resources by a free market system then I don't know what is. Not that the current system doesn't have plenty of problems and challenges to solve, but here is the single most productive and futuristic capital allocator in modern times. Imagine seizing his assets and distributing it to the people via a wealth tax. That would be great for a few months of welfare and terrible for the future.
- shafyy 6y ago
  Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? Do you think he can put money to better use for all of society than a good government? (And we can discuss if the US government is a good government in that sense, but that's beside the point I'm making). I'm pretty sure the answer to these questions is No (he would have still done it) and No (a good government can put money to better use for all of society). Or do you think the single mom with 3 kids working 2 jobs and still can't pay rent and health care cares about electric cars and rockets? Edit: I still think what he's doing is important and impressive, and it's ok that he is one of the richest people on Earth. However, that doesn't mean the US needs to have a better tax system for the rich and better social pillars.
  - hndudette2 6y ago
    > Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? Maybe he would've left the country and tried to build something elsewhere. If he didn't, you also can't proclaim to know that he would've pursued his projects with such vigor in the presence of a wealth tax. The wealth tax idea has been tried before and has failed, so whoever is promoting it at least has to explain why this time is different. https://www.businessinsider.com.au/what-happened-when-the-wealth-tax-was-implemented-in-europe-2019-10?r=US&IR=T https://www.businessinsider.com.au/what-happened-when-the-we... > Or do you think the single mom ... cares about electric cars and rockets? Climate change (EVs) isn't only going to impact the rich. Also, reusable rocket tech is massive value add to our society including to regular people; satellites - which working class people rely on, plus diversifying life in order to reduce existential risk which is something everyone should care about.
  - aeternum 6y ago
    I'd argue we have a good but very inefficient (by-design) government. The US government is optimized to prevent tyranny, definitely not for efficiency. Departments operate on a 'use it or lose it' budgetary basis, there's very little mechanism to use funds efficiently.
  - lend000 6y ago
    Considering that all of his wealth is tied up in TSLA and SpaceX, allowing him control (and resulting in their success based on taking risks), and considering that he reinvests most of his excess capital back into his companies, your answer is not based in reality, despite your appeal to emotion. It's comical, but also tragic, that you also think the government can put his money to better use. The F-35 program alone is $173 billion over budget.
    - whatshisface 6y ago
      Imagine taking SpaceX away from Elon, putting the funds into to the government stuff buying system... and ending up with Boeing getting it all.
      - hndudette2 6y ago
        Put it all into a California high speed rail. That'll do it, economic justice has been achieved.
        s1artibartfast 6y ago
        Perhaps for the consultants and lawyers that suck up all the funds while the rail is never built. California simply does not have the political, legal, and governmental infrastructure succeed at megaprojects. Most major cities in the state can't even overcome the legal and policy hurdles for housing development or light rail, and High speed rail is a magnitude more difficult.
  - cafed00d 6y ago
    In the darkest days of the model 3 production, do you think there’s much of a difference between him and the single mom with 3 kids and 2 jobs? Sure, I can accept that the work a single mom is doing is much nobler, much more humane and much more deserving of our collective conscious assistance. But there’s something to be said of our hypocrisy if we (via govt) tax Elon’s wealth _today_ when those same people are unlikely to have to assisted Tesla during _production hell_ (there was talk of Apple doing some Tesla acquisitions; but can’t remember if the US govt was in talks to help Tesla out there) Elon’s wealth didn’t come out of nowhere. Many many people consciously invested. The US govt _already_ has access to every single one of those people’s wealth via existing taxes. Despite that, we have a society with non-zero single moms who can’t pay rent & healthcare. There’s something wrong in our society here, sure. A wealth tax doesn’t seem to address that problem though. Heck, if the US govt could’ve put taxpayer money to ease off on Model 3 production hell then yes taxing Elon’s gains today would be fair. Otherwise, it’s just unfair, inefficient.
    - shafyy 6y ago
      > In the darkest days of the model 3 production, do you think there’s much of a difference between him and the single mom with 3 kids and 2 jobs? Is this a joke?
  - Aunche 6y ago
    When someone buys a share of Tesla for $800, that money doesn't disappear. It's received by another person. Very little work is done from this exchange, so it doesn't make any difference for the single mom or government.
  - s1artibartfast 6y ago
    Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? I think the answer to this is a resounding Yes, he would not have done it. Tesla and Musk is the perfect example of why a wealth tax on capital is insane. Tesla market cap is 750 Billion, but the profit is 500 million, and the stock owners that haven't sold have realized $0 profit. A 1% wealth tax on Musk's 200b ($1b) would be 4 times higher that the profit of the entire company. Under the current system, the moment he cashes out any stock, he will have to pay taxes on his actual profit. The reason we income instead of wealth, is that wealth can go up and down without the owner seeing any benefit.
    - xur17 6y ago
      > The reason we income instead of wealth, is that wealth can go up and down without the owner seeing any benefit. I don't think a wealth tax is the right solution, a person that holds wealth definitely does derive a benefit from that wealth -> in the form of control (of a company), collateral (borrowing money at sub-inflation rates), and influence.
      - apta_ 6y ago
        Check out Islam's Zakat, which has been proven to work. It's not a wealth tax per se as proposed by some foolish and unrealistic policies, but cash sitting in the bank is taxed at 2.5% (if it is above a certain threshold), and its proceedings go to the needy and poor, among others.
      - s1artibartfast 6y ago
        Yeah, Totally I agree that wealth comes with benefits, even if it cant be spent. I am curious how the collateral works without with owner of wealth ever having to realize income. I suppose the way it could work is moving from loan to loan, using the newer ones to pay off the older ones. I wonder if there is some way to fix the tax codes to address this.
  - xur17 6y ago
    > Do you think he can put money to better use for all of society than a good government? Yes, I do.
  - apta_ 6y ago
    How is that wealth tax even supposed to work? The only successful model that is remotely close that has been historically proven is Islam's Zakat, a form of charity tax if you will. It doesn't force you to sell shares of your company, unlike some proposals I saw by dems. I did not see a single politician refer to Zakat in any of their proposals. Note that they'd have to get rid of income tax as well to make things just.
- aqme28 6y ago
  You can argue that he's the best person we could choose right now to have the title of richest person in the world. But there are far too many needlessly impoverished people in this country to convince me that there's something "efficient" about this.
- u10 6y ago
  Because a car company that manufactured 500k cars is worth _more_ than the entire car industry combined... which manufactured 70 million cars? This is irrational exuberance.
  - natch 6y ago
    I agree the valuation is too high. But we should note that most of those 70 million cars are soon to be obsolete, and their resale value is going to crash very hard. Anyone buying a car these days should think twice about their purchase.
    - kazen44 6y ago
      I think you are highly optimistic about this timescale. This perspecitive is highly US centric. For instance, a lot less people buy new cars in europe, not to mention the developing world.
      - natch 6y ago
        Not sure if you're talking about the timescale of obsolescence or the timescale of the value crashing. One could make the argument that ICE cars becoming obsolete is an event that has already happened, so let's set that aside. You're right that my view of this is US-centric, my bad for that. Value crashing is interesting. Cars have a fairly long lifespan so the transition to ownership of EVs is slow, I would agree with that if that's what you're saying. But the transition to crashing value does not have to be as slow. If the perceived value of an option is 2% better than another option, that does not equate to a 2% price difference. It equates to a much bigger price difference. Of course a lot of EVs are still crappy and the perceived value of ICE cars is still high due to rampant ignorance about charging options (in the US and Europe) or simple lack of charging options (in the developing world). But that can change very quickly as EVs and the infrastructure get better, and then even though the ownership transition is slow, people will be stuck owning ICE cars when they would prefer to own something 2% better, or 10% better, or 90% better.
  - whatshisface 6y ago
- makeworld 6y ago
  "efficient allocation of resources" doesn't mean "the guy who owns popular companies gets unimaginable wealth". Obviously what constitutes efficient is subjective, but I can't see how this kind of allocation is good for the world. > Imagine seizing his assets and distributing it to the people via a wealth tax How would a wealth tax seize his assets?
  - spiralx 6y ago
    A wealth tax wouldn't seize assets, but given that Musk's "wealth" is almost entirely his shares in Tesla, SpaceX, etc., how would he pay a 5% tax on his total wealth without liquidating a bunch of Tesla shares? His physical assets are unlikely to be worth $10bn.
    - perl4ever 6y ago
      Governments and public entities can own shares in corporations, so a tax could be paid in kind.
      - spiralx 6y ago
        That's definitely better for the share price, but what does the government do with those shares? Again it's paper wealth apart from maybe some small amount of dividends generated. And having the US Government "seizing the means of production" - and that's how it would be spun - is a great way to turn people against it! A wealth tax is most likely unconstitutional anyway, the same way income tax was before the Sixteenth Amendment.
        perl4ever 6y ago
        I'm not really arguing whether it's a good or bad idea. It's just that, as far as I know, it's the norm in our society and others so it's odd if someone wants to debate it as a hypothetical that people might turn against. Look at Fannie Mae and Freddie Mac for an example of taking more than a sliver. https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... I'm not sure of the difference between a "wealth tax" and a "property tax". Are you saying the sort of property tax homeowners pay in a lot of places would be unconstitutional at a Federal level? Or are you saying it's unconstitutional at any level?
- happytoexplain 6y ago
  Nothing against Musk, but the specific notion that this proportion of value to wealth is "efficient" seems stupendously backwards. Though I agree that welfare is also not efficient, but only if the goal is solving the problem of suffering and poverty. However, welfare has a second, shorter term function: Necessity.
- AshWolfy 6y ago
  I feel like the job of "paying people do things then taking the profit and credit" isnt the best allocation of resources
baybal2 6y ago
We live in fantastic times
nashashmi 6y ago
No doubt Tesla is worth a lot. The question is when. As of right now I always have had the thought that they can’t get past their manufacturing problems. It is a habit now to think this. Not sure if it is still valid.
- akmarinov 6y ago
  If they come up with full FSD like next month - absolutely the price will be worth it. Now - not so much.
- foxyv 6y ago
  Manufacturing is only half of it. The maintenance back side and parts market is all messed up too. So you not only have a car with some manufacturing issues, but you can't get parts or tools to fix those issues. Then there is the problem with Tesla remotely disabling features after resale. This isn't exclusive to Tesla either. I'm really hating this trend towards "Unauthorized Bread" in the automotive sector.
  - kazen44 6y ago
    Also, i wonder when some manufacturer will deliver a plain jane electric vehicle suitable for the developing world. None of the eletric cars seem fixable by standable mechanics somewhere outside the western world. This is a shame, because eletric vehicles could lower the cost for transportation significantly for the majority of the world.
dkjaudyeqooe 6y ago
Tesla is absolutely not a bubble. Not at all.
- petercooper 6y ago
  Regardless of if they're good or bad people: Gates made sense, Buffett made sense, Bezos made sense.. Musk, I simply don't get how his achievements (as significant as they are) add up to this outcome.
  - dkjaudyeqooe 6y ago
    Think of Musk as the Trump of eco-terrorists and it starts to make sense. But seriously, it's just price momentum. The best reason to buy a stock, to your average schlub, is because the price goes up.
  - cesarvarela 6y ago
    Reusable rockets and EVs(that people actually want) is not enough?
    - mikestew 6y ago
      No, they are not. Both are capital-intensive industries, so simplistic one-sentence remarks are not going to get any closer to an answer.
    - CabSauce 6y ago
      The idea that Tesla will control the EV market is pretty unrealistic. Most major auto manufacturers already have an EV that competes very well with Tesla models. Build quality and repair services are still issues for Tesla as well.
      - cesarvarela 6y ago
        won't control it but it will be the Apple of cars, and that's better than controlling it if you ask me.
iMark 6y ago
I'm been an avid comics fan all my life. I remember "millionaire Bruce Wayne" giving way to "billionaire Bruce Wayne", and idly wondering how long before we'd see the first reference to "trillionaire Bruce Wayne". It seemed impossibly distant once. Not now.
- stickyricky 6y ago
  65 years at a 2.5% inflation rate or 15 years at the stock market's historic growth rate of 12%.
  - Ballas 6y ago
    How did you get those answers, I get to about 5billion for the values you provide.
    - stickyricky 6y ago
      185 billion with X% annual compounding interest for Y years.
melling 6y ago
It’s cool that Elon gets to play with all that money. Hopefully he starts some other futuristic project...or two. However, I do wonder if this isn’t a sign that the market is overvalued. How does it look historically?
- WannaFly 6y ago
  Like shit
- KingMachiavelli 6y ago
  By nearly every conventional metric, TSLA is overvalued even in comparison to a market that may or may not be also overvalued. Although, Elon's net worth is the highest, it's nearly all in TSLA stock of which Elon has about ~20% of all shares. If he sold or made this asset liquid, it would decrease his power in his own company. Considering Elon's methods and behavior can be unconventional to say the least, he probably needs to keep as much power as possible.
  - krcz 6y ago
    I assume that if he was made to step down from the CEO position, TSLA valuation would drop like a fly - so he could easily re-buy everything he would have sold. I don't think that's the path he is going to take, but it's not impossible.
- hndudette2 6y ago
  TSLA has a P/E ratio of 1500. Even though they're a growth stock it's a generous valuation to say the least. The stock price has been driven up by (1) a lot of retail investors loading into the stock & call options, primarily because it's a momentum hype/meme ticker with Elon at the helm, and easy access through Robinhood et al combined with stimulus money. (2) large cap tech stocks have been rallying during COVID; capital has had nowhere else to go with the Fed crushing the USD and non-tech companies suffering, (3) shorts have been repeatedly obliterated and are now mostly staying away. Short interest is now only 6%. (4) TSLA was recently included in the S&P 500 at a ~1.5% weight, so index funds and ETFs have been forced to buy it due to a mandate to track the index.
paulsutter 6y ago
Just wait for the Starlink IPO (which will mark up all his SpaceX shares).....
- benmw333 6y ago
  Starlink gunna be a cash cow.
  - deleted 6y ago
    [deleted]
- Mockapapella 6y ago
  IIRC he's publicly stated that he has no interest in taking SpaceX public due to his experience with investors in Tesla
  - s1artibartfast 6y ago
    That doesn't mean he wont spin off starlink
  - deleted 6y ago
    [deleted]
  - justicezyx 6y ago
    Elon does not lie, he just understand minds change. Of course he meant that when the statement was made, and he will be perfectly fine to forget that and claim going public is best for the company. A very interesting side story. Leon once tweeted that starlink has some risk of being shot down when flying over China. That's before Tesla got the Shanghai deal. And now, I could not find that tweet or any screenshot of that. I bet Leon spent some good money to make it disappear. Can any fellow confirm my memory?
rocgf 6y ago
Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but almost 10x in one year looks like a classic bubble to me. LE: Also, I don't really understand how people keep falling for this stuff. I have no doubt that some are very well aware that it's a bubble and just think they can time the crash correctly, but I see _a lot_ of people with incredibly bullish views on this. And to be honest, it's the same with Bitcoin.
- fullshark 6y ago
  A ton of short sellers that have so far lost that bet handily.
  - insert_coin 6y ago
    It's a bubble for a reason, you can't short sell you can only watch it pop.
  - dhruvarora013 6y ago
    Just because something hasn't happened yet, doesn't mean it will never happen. Tesla is doing extremely well and has a bright future but it's hard to make a solid argument for its current valuation.
    - fullshark 6y ago
      Yeah i didn't mean to imply that the bubble assertion was false, merely point out that a ton of people also think it's a bubble (and have for years), and so far have paid a huge price for that bet.
  - shiftpgdn 6y ago
    The market can remain irrational far longer than you can maintain liquidity.
  - virgilp 6y ago
    "The market can stay irrational longer than you can stay solvent". This is nothing new. I love Tesla but when even Musk himself looks at the stock price and tweets "LOL, stonks", you know something must be off.
pokerhobo 6y ago
Good for Elon. He put his own money into Tesla keeping it from going under and still holds 20% never selling any shares. He’s even complained in the past that Tesla stock was too high. His significant ownership of SpaceX also helps. Disclaimer, I’m a Tesla shareholder and could retire today off my gains.
- MagnumOpus 6y ago
  Not just never selling shares. Convincing the other shareholders to gift him 55bn of their shares as annual salary. Smart but not repeatable infinitely, sooner or later some of you will button on that you are being fleeced. (So sell now and retire, or regret it later.)
- apta_ 6y ago
  How much do you need to retire? $500K? $1M? $10M?
bookmarkable 6y ago
I really wish they would stop this reporting of who is the richest. It is lazy reporting and just recalculates by the minute based on stock values. I'd rather see who has the highest liquidity. Who is holding on to cash they could, right this minute, spend, or stocks they could freely sell without tanking their own companies? Not Musk, not Zuck, not Jeff... at least, not likely.
- rvz 6y ago
  You're right. But unfortunately, that is what feeds the media companies like the BBC with lazy articles like this one and glossing over details. > I'd rather see who has the highest liquidity. That would be interesting.
- imglorp 6y ago
  Anyway it's more likely Putin at around $200b. You can be pretty sure his is not as heavily based on some bubble market cap. https://foreignpolicyi.org/vladimir-putins-net-worth/ https://foreignpolicyi.org/vladimir-putins-net-worth/
  - JumpCrisscross 6y ago
    Saudi king?
  - saganus 6y ago
    I wonder if there's really a difference between the wealth of these ultra-rich people, besides a different number. I.e. is there anything someone with 200B can do that someone with "only" 50B can't? Putin and the Saudi king are probably in a different category as they don't "just" have ultra-wealth, but also political power (as heads of countries), military at their disposal, etc. But, say, between Jeff Bezos, Warren Buffet, Elon Musk, Bill Gates, et al? (I know they don't have all their wealth in cash, which might change things a bit. But still) Perhaps my imagination is lacking? Edit: Also, I wonder how long before the ultra-rich start spending in truly extravagant projects, besides just bigger boats. I would imagine that by now someone besides Elon would be designing/building their own personal space station or something like that..
Finnucane 6y ago
Is he really worth that? I mean, let's offer him on ebay and see what we get.
botwriter 6y ago
Most successful African American in history!!!
newbie578 6y ago
Congrats to Elon for finally learning from the Steve Jobs handbook. Make a cult of your followers, and they will literally take in everything you throw at them. I cannot describe how many times I have heard the infamous "iT'S mOrE tHaN a cAr cOmPaNy"... All bark no bite, they sure as hell are not a major car company since they didn't manage to even deliver 500 000 vehicles this year ( "almost" 500 is not 500, especially since you have been promising 500 000 delivered cars for the last 6 years). Still waiting to see how their "revolutionary" battery technology is going to look like, SolarCity was almost bankrupt, which is the reason Tesla had to buy them to save Elon's cousins... They do got a shot at driverless technology, but the question is how big of a market is that, and how much are they going to own.. Waymo is also a danger in that field...
deleted 6y ago
[deleted]
Proven 6y ago
How else can you become #1 these day except by creating mediocre government-subsidized products or ventures.
tnt128 6y ago
This is the same playbook amazon did - give investors a vision, convince them short term profit are less important than the eventual goal. Get the capital at a really really low cost, and then use these capital to build hard things, and crush competition.
- peteradio 6y ago
  Whats the path that Tesla crushes the competition though? Seems like existing competition can ride the coattails if anything. Only way to stop it would be to engage in some incredibly anti-competitive behavior.
  - Hypx 6y ago
    Tesla is already losing to the competition. See Europe where it is no longer the top selling EV company. This is probably the biggest difference between Tesla and Amazon. Namely, that Tesla isn't able create any kind of network effect to keep competitors out.
    - peteradio 6y ago
      Wonder how much money a simple man could make if they windowed their short correctly. Could TSLA create short billionaires with its current valuation?
      - Hypx 6y ago
        It's possible since we are likely in "Big Short" territory. Timing is the challenge though.
  - justicezyx 6y ago
    Tesla's electronic platform is at least a generation ahead of big auto makers. Confirmed from my friends at Shanghai auto. Other good things are the software platform, direct sale channel. And in the end, Tesla has Elon Musk.
pokerhobo 6y ago
Elon's motivation for making money: https://twitter.com/elonmusk/status/1050812486226599936 https://twitter.com/elonmusk/status/1050812486226599936
cesarvarela 6y ago
The value of TSLA arises from having RL Tony Stark behind vs faceless commoditized brands (VW, BMW, etc.). It's the Apple of cars and that's invaluable.
slifin 6y ago
World's richest person excluding dictators and royal families? Like the Forbes list or the real richest person?
kadonoishi 6y ago
How does one get over the frustration of not having invested? It’s particularly acute for me because I made a serious plan for my brother and me to put our entire inheritance on one stock intending to level our money up by an order of magnitude (6 figures to 7) and achieve financial independence. I chose TSLA in January 2018 as the stock with the highest probability of going up by an order of magnitude; we were looking for the best time to buy; I said in August 2018 that I thought a low of 200 was plausible, on a time scale of months, before going up to the hoped-for $650B market cap in a decade. TSLA hit 200 in May 2019, nine months after I made that prediction. I was trying to avoid looking at the stock market to cut the risk of overreacting to trivia, and didn’t see it. But my brother was watching, he saw TSLA hit 200 — and he didn’t say anything about it. We’d worked on this project for most of 2018, and then in 2019 my prediction, my only low price prediction, happened: and my partner in the project simply took no action. And we missed the whole thing completely. Today, three years from the inaugural discussion of this strategy in January 2018, we would have $11,500,000 and our lives would be transformed. Putting our inheritance on TSLA aiming for an order-of-magnitude increase was my exact strategy. I made an uncannily perfect call of 200 (split-adjusted 40) as the lowest price we would see. My brother did not help me at all; and now every day I feel anger over this, I feel he lied to me about his support for our joint project, he has no sensible explanation for his lack of action (“I thought you probably already knew” and even less sensible excuses). Financial losses on the stock market can cause lots of hard feelings, and missed opportunities can too. How does one cope with this?
- naveen99 6y ago
  There are opportunities all the time. Go look at the chart for AMD, Netflix, aaple. Go apply your learning skills from computers to the market. Don’t look at the past but to learn.
  - kadonoishi 6y ago
    Yep. That’s the right response. Put the past behind, and move forward productively. The reason I posted this on HN is that it’s hard to muster the emotional wherewithal to do that after such a setback. I thought comments from this community, where the people here are capable of understanding the issues, could help.
justicezyx 6y ago
Question: How did elon maintain his share in Tesla during the finance rounds? He was not a cofounder. During the years, he did not have other significant sources of income. And Tesla has been capital hungry for a long time. I am quite interested in his techniques, and am guessing so do a lot of founder wannabes.
dalu 6y ago
Just the other month I read it's Amazon's owner, forgot the correct spelling of his name. What to believe?
nbzso 6y ago
Why I find those types of comparisons unreal? Because objectively speaking there are a lot of families with well-hidden wealth that can make Bezos or Musk fortunes look like pocket change. It's common sense.
stunt 6y ago
competition aside, do you think that Tesla will hold the same valuation if Elon Musk leaves or dies? If you think Tesla valuation is just Elon hype, that's just a huge risk by itself.

94 points by headalgorithm 6y ago

If this isn't an efficient allocation of resources by a free market system then I don't know what is. Not that the current system doesn't have plenty of problems and challenges to solve, but here is the single most productive and futuristic capital allocator in modern times. Imagine seizing his assets and distributing it to the people via a wealth tax. That would be great for a few months of welfare and terrible for the future.

shafyy 6y ago
Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? Do you think he can put money to better use for all of society than a good government? (And we can discuss if the US government is a good government in that sense, but that's beside the point I'm making). I'm pretty sure the answer to these questions is No (he would have still done it) and No (a good government can put money to better use for all of society). Or do you think the single mom with 3 kids working 2 jobs and still can't pay rent and health care cares about electric cars and rockets? Edit: I still think what he's doing is important and impressive, and it's ok that he is one of the richest people on Earth. However, that doesn't mean the US needs to have a better tax system for the rich and better social pillars.
- hndudette2 6y ago
  > Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? Maybe he would've left the country and tried to build something elsewhere. If he didn't, you also can't proclaim to know that he would've pursued his projects with such vigor in the presence of a wealth tax. The wealth tax idea has been tried before and has failed, so whoever is promoting it at least has to explain why this time is different. https://www.businessinsider.com.au/what-happened-when-the-wealth-tax-was-implemented-in-europe-2019-10?r=US&IR=T https://www.businessinsider.com.au/what-happened-when-the-we... > Or do you think the single mom ... cares about electric cars and rockets? Climate change (EVs) isn't only going to impact the rich. Also, reusable rocket tech is massive value add to our society including to regular people; satellites - which working class people rely on, plus diversifying life in order to reduce existential risk which is something everyone should care about.
- aeternum 6y ago
  I'd argue we have a good but very inefficient (by-design) government. The US government is optimized to prevent tyranny, definitely not for efficiency. Departments operate on a 'use it or lose it' budgetary basis, there's very little mechanism to use funds efficiently.
- lend000 6y ago
  Considering that all of his wealth is tied up in TSLA and SpaceX, allowing him control (and resulting in their success based on taking risks), and considering that he reinvests most of his excess capital back into his companies, your answer is not based in reality, despite your appeal to emotion. It's comical, but also tragic, that you also think the government can put his money to better use. The F-35 program alone is $173 billion over budget.
  - whatshisface 6y ago
    Imagine taking SpaceX away from Elon, putting the funds into to the government stuff buying system... and ending up with Boeing getting it all.
    - hndudette2 6y ago
      Put it all into a California high speed rail. That'll do it, economic justice has been achieved.
      - s1artibartfast 6y ago
        Perhaps for the consultants and lawyers that suck up all the funds while the rail is never built. California simply does not have the political, legal, and governmental infrastructure succeed at megaprojects. Most major cities in the state can't even overcome the legal and policy hurdles for housing development or light rail, and High speed rail is a magnitude more difficult.
- cafed00d 6y ago
  In the darkest days of the model 3 production, do you think there’s much of a difference between him and the single mom with 3 kids and 2 jobs? Sure, I can accept that the work a single mom is doing is much nobler, much more humane and much more deserving of our collective conscious assistance. But there’s something to be said of our hypocrisy if we (via govt) tax Elon’s wealth _today_ when those same people are unlikely to have to assisted Tesla during _production hell_ (there was talk of Apple doing some Tesla acquisitions; but can’t remember if the US govt was in talks to help Tesla out there) Elon’s wealth didn’t come out of nowhere. Many many people consciously invested. The US govt _already_ has access to every single one of those people’s wealth via existing taxes. Despite that, we have a society with non-zero single moms who can’t pay rent & healthcare. There’s something wrong in our society here, sure. A wealth tax doesn’t seem to address that problem though. Heck, if the US govt could’ve put taxpayer money to ease off on Model 3 production hell then yes taxing Elon’s gains today would be fair. Otherwise, it’s just unfair, inefficient.
  - shafyy 6y ago
    > In the darkest days of the model 3 production, do you think there’s much of a difference between him and the single mom with 3 kids and 2 jobs? Is this a joke?
- Aunche 6y ago
  When someone buys a share of Tesla for $800, that money doesn't disappear. It's received by another person. Very little work is done from this exchange, so it doesn't make any difference for the single mom or government.
- s1artibartfast 6y ago
  Do you think that he wouldn't have done what he has done if there was a wealth tax in the US? I think the answer to this is a resounding Yes, he would not have done it. Tesla and Musk is the perfect example of why a wealth tax on capital is insane. Tesla market cap is 750 Billion, but the profit is 500 million, and the stock owners that haven't sold have realized $0 profit. A 1% wealth tax on Musk's 200b ($1b) would be 4 times higher that the profit of the entire company. Under the current system, the moment he cashes out any stock, he will have to pay taxes on his actual profit. The reason we income instead of wealth, is that wealth can go up and down without the owner seeing any benefit.
  - xur17 6y ago
    > The reason we income instead of wealth, is that wealth can go up and down without the owner seeing any benefit. I don't think a wealth tax is the right solution, a person that holds wealth definitely does derive a benefit from that wealth -> in the form of control (of a company), collateral (borrowing money at sub-inflation rates), and influence.
    - apta_ 6y ago
      Check out Islam's Zakat, which has been proven to work. It's not a wealth tax per se as proposed by some foolish and unrealistic policies, but cash sitting in the bank is taxed at 2.5% (if it is above a certain threshold), and its proceedings go to the needy and poor, among others.
    - s1artibartfast 6y ago
      Yeah, Totally I agree that wealth comes with benefits, even if it cant be spent. I am curious how the collateral works without with owner of wealth ever having to realize income. I suppose the way it could work is moving from loan to loan, using the newer ones to pay off the older ones. I wonder if there is some way to fix the tax codes to address this.
- xur17 6y ago
  > Do you think he can put money to better use for all of society than a good government? Yes, I do.
- apta_ 6y ago
  How is that wealth tax even supposed to work? The only successful model that is remotely close that has been historically proven is Islam's Zakat, a form of charity tax if you will. It doesn't force you to sell shares of your company, unlike some proposals I saw by dems. I did not see a single politician refer to Zakat in any of their proposals. Note that they'd have to get rid of income tax as well to make things just.
aqme28 6y ago
You can argue that he's the best person we could choose right now to have the title of richest person in the world. But there are far too many needlessly impoverished people in this country to convince me that there's something "efficient" about this.
u10 6y ago
Because a car company that manufactured 500k cars is worth _more_ than the entire car industry combined... which manufactured 70 million cars? This is irrational exuberance.
- natch 6y ago
  I agree the valuation is too high. But we should note that most of those 70 million cars are soon to be obsolete, and their resale value is going to crash very hard. Anyone buying a car these days should think twice about their purchase.
  - kazen44 6y ago
    I think you are highly optimistic about this timescale. This perspecitive is highly US centric. For instance, a lot less people buy new cars in europe, not to mention the developing world.
    - natch 6y ago
      Not sure if you're talking about the timescale of obsolescence or the timescale of the value crashing. One could make the argument that ICE cars becoming obsolete is an event that has already happened, so let's set that aside. You're right that my view of this is US-centric, my bad for that. Value crashing is interesting. Cars have a fairly long lifespan so the transition to ownership of EVs is slow, I would agree with that if that's what you're saying. But the transition to crashing value does not have to be as slow. If the perceived value of an option is 2% better than another option, that does not equate to a 2% price difference. It equates to a much bigger price difference. Of course a lot of EVs are still crappy and the perceived value of ICE cars is still high due to rampant ignorance about charging options (in the US and Europe) or simple lack of charging options (in the developing world). But that can change very quickly as EVs and the infrastructure get better, and then even though the ownership transition is slow, people will be stuck owning ICE cars when they would prefer to own something 2% better, or 10% better, or 90% better.
- whatshisface 6y ago
makeworld 6y ago
"efficient allocation of resources" doesn't mean "the guy who owns popular companies gets unimaginable wealth". Obviously what constitutes efficient is subjective, but I can't see how this kind of allocation is good for the world. > Imagine seizing his assets and distributing it to the people via a wealth tax How would a wealth tax seize his assets?
- spiralx 6y ago
  A wealth tax wouldn't seize assets, but given that Musk's "wealth" is almost entirely his shares in Tesla, SpaceX, etc., how would he pay a 5% tax on his total wealth without liquidating a bunch of Tesla shares? His physical assets are unlikely to be worth $10bn.
  - perl4ever 6y ago
    Governments and public entities can own shares in corporations, so a tax could be paid in kind.
    - spiralx 6y ago
      That's definitely better for the share price, but what does the government do with those shares? Again it's paper wealth apart from maybe some small amount of dividends generated. And having the US Government "seizing the means of production" - and that's how it would be spun - is a great way to turn people against it! A wealth tax is most likely unconstitutional anyway, the same way income tax was before the Sixteenth Amendment.
      - perl4ever 6y ago
        I'm not really arguing whether it's a good or bad idea. It's just that, as far as I know, it's the norm in our society and others so it's odd if someone wants to debate it as a hypothetical that people might turn against. Look at Fannie Mae and Freddie Mac for an example of taking more than a sliver. https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... I'm not sure of the difference between a "wealth tax" and a "property tax". Are you saying the sort of property tax homeowners pay in a lot of places would be unconstitutional at a Federal level? Or are you saying it's unconstitutional at any level?
happytoexplain 6y ago
Nothing against Musk, but the specific notion that this proportion of value to wealth is "efficient" seems stupendously backwards. Though I agree that welfare is also not efficient, but only if the goal is solving the problem of suffering and poverty. However, welfare has a second, shorter term function: Necessity.
AshWolfy 6y ago
I feel like the job of "paying people do things then taking the profit and credit" isnt the best allocation of resources

baybal2 6y ago

We live in fantastic times

nashashmi 6y ago

No doubt Tesla is worth a lot. The question is when. As of right now I always have had the thought that they can’t get past their manufacturing problems. It is a habit now to think this. Not sure if it is still valid.

akmarinov 6y ago
If they come up with full FSD like next month - absolutely the price will be worth it. Now - not so much.
foxyv 6y ago
Manufacturing is only half of it. The maintenance back side and parts market is all messed up too. So you not only have a car with some manufacturing issues, but you can't get parts or tools to fix those issues. Then there is the problem with Tesla remotely disabling features after resale. This isn't exclusive to Tesla either. I'm really hating this trend towards "Unauthorized Bread" in the automotive sector.
- kazen44 6y ago
  Also, i wonder when some manufacturer will deliver a plain jane electric vehicle suitable for the developing world. None of the eletric cars seem fixable by standable mechanics somewhere outside the western world. This is a shame, because eletric vehicles could lower the cost for transportation significantly for the majority of the world.

dkjaudyeqooe 6y ago

Tesla is absolutely not a bubble. Not at all.

petercooper 6y ago
Regardless of if they're good or bad people: Gates made sense, Buffett made sense, Bezos made sense.. Musk, I simply don't get how his achievements (as significant as they are) add up to this outcome.
- dkjaudyeqooe 6y ago
  Think of Musk as the Trump of eco-terrorists and it starts to make sense. But seriously, it's just price momentum. The best reason to buy a stock, to your average schlub, is because the price goes up.
- cesarvarela 6y ago
  Reusable rockets and EVs(that people actually want) is not enough?
  - mikestew 6y ago
    No, they are not. Both are capital-intensive industries, so simplistic one-sentence remarks are not going to get any closer to an answer.
  - CabSauce 6y ago
    The idea that Tesla will control the EV market is pretty unrealistic. Most major auto manufacturers already have an EV that competes very well with Tesla models. Build quality and repair services are still issues for Tesla as well.
    - cesarvarela 6y ago
      won't control it but it will be the Apple of cars, and that's better than controlling it if you ask me.

iMark 6y ago

I'm been an avid comics fan all my life. I remember "millionaire Bruce Wayne" giving way to "billionaire Bruce Wayne", and idly wondering how long before we'd see the first reference to "trillionaire Bruce Wayne". It seemed impossibly distant once. Not now.

stickyricky 6y ago
65 years at a 2.5% inflation rate or 15 years at the stock market's historic growth rate of 12%.
- Ballas 6y ago
  How did you get those answers, I get to about 5billion for the values you provide.
  - stickyricky 6y ago
    185 billion with X% annual compounding interest for Y years.

melling 6y ago

It’s cool that Elon gets to play with all that money. Hopefully he starts some other futuristic project...or two. However, I do wonder if this isn’t a sign that the market is overvalued. How does it look historically?

WannaFly 6y ago
Like shit
KingMachiavelli 6y ago
By nearly every conventional metric, TSLA is overvalued even in comparison to a market that may or may not be also overvalued. Although, Elon's net worth is the highest, it's nearly all in TSLA stock of which Elon has about ~20% of all shares. If he sold or made this asset liquid, it would decrease his power in his own company. Considering Elon's methods and behavior can be unconventional to say the least, he probably needs to keep as much power as possible.
- krcz 6y ago
  I assume that if he was made to step down from the CEO position, TSLA valuation would drop like a fly - so he could easily re-buy everything he would have sold. I don't think that's the path he is going to take, but it's not impossible.
hndudette2 6y ago
TSLA has a P/E ratio of 1500. Even though they're a growth stock it's a generous valuation to say the least. The stock price has been driven up by (1) a lot of retail investors loading into the stock & call options, primarily because it's a momentum hype/meme ticker with Elon at the helm, and easy access through Robinhood et al combined with stimulus money. (2) large cap tech stocks have been rallying during COVID; capital has had nowhere else to go with the Fed crushing the USD and non-tech companies suffering, (3) shorts have been repeatedly obliterated and are now mostly staying away. Short interest is now only 6%. (4) TSLA was recently included in the S&P 500 at a ~1.5% weight, so index funds and ETFs have been forced to buy it due to a mandate to track the index.

paulsutter 6y ago

Just wait for the Starlink IPO (which will mark up all his SpaceX shares).....

benmw333 6y ago
Starlink gunna be a cash cow.
- deleted 6y ago
  [deleted]
Mockapapella 6y ago
IIRC he's publicly stated that he has no interest in taking SpaceX public due to his experience with investors in Tesla
- s1artibartfast 6y ago
  That doesn't mean he wont spin off starlink
- deleted 6y ago
  [deleted]
- justicezyx 6y ago
  Elon does not lie, he just understand minds change. Of course he meant that when the statement was made, and he will be perfectly fine to forget that and claim going public is best for the company. A very interesting side story. Leon once tweeted that starlink has some risk of being shot down when flying over China. That's before Tesla got the Shanghai deal. And now, I could not find that tweet or any screenshot of that. I bet Leon spent some good money to make it disappear. Can any fellow confirm my memory?

rocgf 6y ago

Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but almost 10x in one year looks like a classic bubble to me. LE: Also, I don't really understand how people keep falling for this stuff. I have no doubt that some are very well aware that it's a bubble and just think they can time the crash correctly, but I see _a lot_ of people with incredibly bullish views on this. And to be honest, it's the same with Bitcoin.

fullshark 6y ago
A ton of short sellers that have so far lost that bet handily.
- insert_coin 6y ago
  It's a bubble for a reason, you can't short sell you can only watch it pop.
- dhruvarora013 6y ago
  Just because something hasn't happened yet, doesn't mean it will never happen. Tesla is doing extremely well and has a bright future but it's hard to make a solid argument for its current valuation.
  - fullshark 6y ago
    Yeah i didn't mean to imply that the bubble assertion was false, merely point out that a ton of people also think it's a bubble (and have for years), and so far have paid a huge price for that bet.
- shiftpgdn 6y ago
  The market can remain irrational far longer than you can maintain liquidity.
- virgilp 6y ago
  "The market can stay irrational longer than you can stay solvent". This is nothing new. I love Tesla but when even Musk himself looks at the stock price and tweets "LOL, stonks", you know something must be off.

pokerhobo 6y ago

Good for Elon. He put his own money into Tesla keeping it from going under and still holds 20% never selling any shares. He’s even complained in the past that Tesla stock was too high. His significant ownership of SpaceX also helps. Disclaimer, I’m a Tesla shareholder and could retire today off my gains.

MagnumOpus 6y ago
Not just never selling shares. Convincing the other shareholders to gift him 55bn of their shares as annual salary. Smart but not repeatable infinitely, sooner or later some of you will button on that you are being fleeced. (So sell now and retire, or regret it later.)
apta_ 6y ago
How much do you need to retire? $500K? $1M? $10M?

bookmarkable 6y ago

I really wish they would stop this reporting of who is the richest. It is lazy reporting and just recalculates by the minute based on stock values. I'd rather see who has the highest liquidity. Who is holding on to cash they could, right this minute, spend, or stocks they could freely sell without tanking their own companies? Not Musk, not Zuck, not Jeff... at least, not likely.

rvz 6y ago
You're right. But unfortunately, that is what feeds the media companies like the BBC with lazy articles like this one and glossing over details. > I'd rather see who has the highest liquidity. That would be interesting.
imglorp 6y ago
Anyway it's more likely Putin at around $200b. You can be pretty sure his is not as heavily based on some bubble market cap. https://foreignpolicyi.org/vladimir-putins-net-worth/ https://foreignpolicyi.org/vladimir-putins-net-worth/
- JumpCrisscross 6y ago
  Saudi king?
- saganus 6y ago
  I wonder if there's really a difference between the wealth of these ultra-rich people, besides a different number. I.e. is there anything someone with 200B can do that someone with "only" 50B can't? Putin and the Saudi king are probably in a different category as they don't "just" have ultra-wealth, but also political power (as heads of countries), military at their disposal, etc. But, say, between Jeff Bezos, Warren Buffet, Elon Musk, Bill Gates, et al? (I know they don't have all their wealth in cash, which might change things a bit. But still) Perhaps my imagination is lacking? Edit: Also, I wonder how long before the ultra-rich start spending in truly extravagant projects, besides just bigger boats. I would imagine that by now someone besides Elon would be designing/building their own personal space station or something like that..

Finnucane 6y ago

Is he really worth that? I mean, let's offer him on ebay and see what we get.

botwriter 6y ago

Most successful African American in history!!!

newbie578 6y ago

Congrats to Elon for finally learning from the Steve Jobs handbook. Make a cult of your followers, and they will literally take in everything you throw at them. I cannot describe how many times I have heard the infamous "iT'S mOrE tHaN a cAr cOmPaNy"... All bark no bite, they sure as hell are not a major car company since they didn't manage to even deliver 500 000 vehicles this year ( "almost" 500 is not 500, especially since you have been promising 500 000 delivered cars for the last 6 years). Still waiting to see how their "revolutionary" battery technology is going to look like, SolarCity was almost bankrupt, which is the reason Tesla had to buy them to save Elon's cousins... They do got a shot at driverless technology, but the question is how big of a market is that, and how much are they going to own.. Waymo is also a danger in that field...

deleted 6y ago

[deleted]

Proven 6y ago

How else can you become #1 these day except by creating mediocre government-subsidized products or ventures.

tnt128 6y ago

This is the same playbook amazon did - give investors a vision, convince them short term profit are less important than the eventual goal. Get the capital at a really really low cost, and then use these capital to build hard things, and crush competition.

peteradio 6y ago
Whats the path that Tesla crushes the competition though? Seems like existing competition can ride the coattails if anything. Only way to stop it would be to engage in some incredibly anti-competitive behavior.
- Hypx 6y ago
  Tesla is already losing to the competition. See Europe where it is no longer the top selling EV company. This is probably the biggest difference between Tesla and Amazon. Namely, that Tesla isn't able create any kind of network effect to keep competitors out.
  - peteradio 6y ago
    Wonder how much money a simple man could make if they windowed their short correctly. Could TSLA create short billionaires with its current valuation?
    - Hypx 6y ago
      It's possible since we are likely in "Big Short" territory. Timing is the challenge though.
- justicezyx 6y ago
  Tesla's electronic platform is at least a generation ahead of big auto makers. Confirmed from my friends at Shanghai auto. Other good things are the software platform, direct sale channel. And in the end, Tesla has Elon Musk.

pokerhobo 6y ago

Elon's motivation for making money: https://twitter.com/elonmusk/status/1050812486226599936 https://twitter.com/elonmusk/status/1050812486226599936

cesarvarela 6y ago

The value of TSLA arises from having RL Tony Stark behind vs faceless commoditized brands (VW, BMW, etc.). It's the Apple of cars and that's invaluable.

slifin 6y ago

World's richest person excluding dictators and royal families? Like the Forbes list or the real richest person?

kadonoishi 6y ago

How does one get over the frustration of not having invested? It’s particularly acute for me because I made a serious plan for my brother and me to put our entire inheritance on one stock intending to level our money up by an order of magnitude (6 figures to 7) and achieve financial independence. I chose TSLA in January 2018 as the stock with the highest probability of going up by an order of magnitude; we were looking for the best time to buy; I said in August 2018 that I thought a low of 200 was plausible, on a time scale of months, before going up to the hoped-for $650B market cap in a decade. TSLA hit 200 in May 2019, nine months after I made that prediction. I was trying to avoid looking at the stock market to cut the risk of overreacting to trivia, and didn’t see it. But my brother was watching, he saw TSLA hit 200 — and he didn’t say anything about it. We’d worked on this project for most of 2018, and then in 2019 my prediction, my only low price prediction, happened: and my partner in the project simply took no action. And we missed the whole thing completely. Today, three years from the inaugural discussion of this strategy in January 2018, we would have $11,500,000 and our lives would be transformed. Putting our inheritance on TSLA aiming for an order-of-magnitude increase was my exact strategy. I made an uncannily perfect call of 200 (split-adjusted 40) as the lowest price we would see. My brother did not help me at all; and now every day I feel anger over this, I feel he lied to me about his support for our joint project, he has no sensible explanation for his lack of action (“I thought you probably already knew” and even less sensible excuses). Financial losses on the stock market can cause lots of hard feelings, and missed opportunities can too. How does one cope with this?

naveen99 6y ago
There are opportunities all the time. Go look at the chart for AMD, Netflix, aaple. Go apply your learning skills from computers to the market. Don’t look at the past but to learn.
- kadonoishi 6y ago
  Yep. That’s the right response. Put the past behind, and move forward productively. The reason I posted this on HN is that it’s hard to muster the emotional wherewithal to do that after such a setback. I thought comments from this community, where the people here are capable of understanding the issues, could help.

justicezyx 6y ago

Question: How did elon maintain his share in Tesla during the finance rounds? He was not a cofounder. During the years, he did not have other significant sources of income. And Tesla has been capital hungry for a long time. I am quite interested in his techniques, and am guessing so do a lot of founder wannabes.

dalu 6y ago

Just the other month I read it's Amazon's owner, forgot the correct spelling of his name. What to believe?

nbzso 6y ago

Why I find those types of comparisons unreal? Because objectively speaking there are a lot of families with well-hidden wealth that can make Bezos or Musk fortunes look like pocket change. It's common sense.

stunt 6y ago

competition aside, do you think that Tesla will hold the same valuation if Elon Musk leaves or dies? If you think Tesla valuation is just Elon hype, that's just a huge risk by itself.