Elon Musk's wealth increases by $15 billion, set to pass Mark Zuckerberg as third-richest...

midian182

Posts: 6,182   +51
Staff member
What just happened? Even by Elon Musk's standards, a lot has happened to the billionaire over the last few days: positive and negative Covid-19 tests, the launch of four astronauts into space inside a vehicle built by one of his companies, and now a $15 billion boost to his personal fortune, putting the CEO ahead of Mark Zuckerberg as the third-richest person in the world.

Musk's extra wealth comes after Tesla was accepted into the S&P 500, which measures the stock performance of 500 large companies listed on the US stock exchanges. Tesla failed to make the cut back in September but will now enter the index on December 21 as the largest new entrant in the group's history with a valuation of $386 billion. That amount puts it above Nvidia, Mastercard, Walt Disney, and Verizon.

After reporting losses for much of its existence, Tesla has experienced five consecutive quarters of profit, helping it meet the criteria for entry into the S&P 500.

"(Tesla) will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history," a spokesman for S&P Dow Jones Indices said, via the BBC.

Bloomberg reports that Tesla's stock closed at $408 yesterday. With his 20 percent share in the company, Musk's net worth increased to $117.5 billion. The Bloomberg Billionaires Index currently has him in fourth place with $102 billion as the recent jump has yet to be added. When it is, Musk will be ahead of Zuckerberg ($106 billion) while sitting behind Bill Gates ($129 billion), and Jeff Bezos ($184 billion). Musk does top the list when it comes to year-on-year wealth gains, though, having added $90 billion (the list still states $74.6 billion) to his personal fortune over the last 12 months.

Musk, who has long downplayed the seriousness of coronavirus, last week tweeted that he'd taken four Covid-19 tests, receiving two negative and two positive results on the same day. There was better news to follow: NASA launched a crew into orbit on a mission to the International Space Station using a commercial spacecraft built and operated by Musk's SpaceX company.

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poohbear

Posts: 520   +409
Good for him, he stuck it out with Tesla for 17 years despite enormous ridicule & criticism from Wall street analysts. That's 16 years of perseverance in spite of all the opposition for a vision that people ridiculed, so I have nothing but respect for this guy who used to sleep on the Tesla factory floor at times. He said at one point Tesla was within 1 month of bankruptcy, and yet he still stuck through.
 

Digitalzone

Posts: 142   +78
Anyone seriously believing this? There are men much wealthier than these guys. These are only public faces with some assigned value, but those wallstreet's faces much richer, and secret.
 

captaincranky

Posts: 16,211   +4,971
For Tesla to turn a profit, Musk had to sell out to China. You know, new "giga-factory" there and all that.
 

captaincranky

Posts: 16,211   +4,971
Also to Germany and Texas, and many more of those newfangled "giga-factories" to come. Yeah they sold out specifically to China, sure lol.
Neither Tesla Germany nor Tesla Texas exist yet.
Not saying that they won't, just that they don't.


Shanghai's up and running though.

And BTW, Tesla really didn't reliably turn a profit until the Shanghai factory was up and running.
 
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Plutoisaplanet

Posts: 333   +405
Neither Tesla Germany nor Tesla Texas exist yet.
Not saying that they won't, just that they don't.


Shanghai's up and running though.

And BTW, Tesla really didn't reliably turn a profit until the Shanghai factory was up and running.
My point is that they simply needed higher scale to make a profit and China was just the first international market they expanded production to. Ever since they hit scale, they've been profitable except for two quarters where they were going through restructuring. And BTW for 2 quarters before Shanghai even opened, Tesla had made a profit.
 

captaincranky

Posts: 16,211   +4,971
And BTW for 2 quarters before Shanghai even opened, Tesla had made a profit.
Yeah but, 2 quarters out of how many, doesn't really count, now does it.

Actually, a couple of years ago, Tesla looked like it was going to turn a profit, but Musk invested it back into his factory, (or was it equipment for the factory, not sure), and back came the red ink.

It's nice to see Space-X doing so well, but that may be in spite of Musk, and not because of him.
 

Plutoisaplanet

Posts: 333   +405
Yeah but, 2 quarters out of how many, doesn't really count, now does it.

Actually, a couple of years ago, Tesla looked like it was going to turn a profit, but Musk invested it back into his factory, (or was it equipment for the factory, not sure), and back came the red ink.

It's nice to see Space-X doing so well, but that may be in spite of Musk, and not because of him.
I have a feeling you may be misinterpreting the graph, which is of Tesla's profits not SpaceX. Tesla had two quarters immediately preceding Shanghai turning on that were profitable and only continued to be profitable once Shanghai came online. Before that, Tesla went through restructuring where they were at a loss for 2 quarters, and before that they had 2 more quarters of profit. What kicked all this off was ramping up the Model 3 in the US; before they weren't anywhere close to profitability.

So to say that Tesla became profitable because they sold out to China makes no sense. Since the Model 3 production ramp completed, they've had 7/9 quarters of profit (less than half being in 2020, or Shanghai-related). Prior to that, they had 7 straight quarters of losses.
 

captaincranky

Posts: 16,211   +4,971
I have a feeling you may be misinterpreting the graph, which is of Tesla's profits not SpaceX.
I didn't "misinterpret anything. I merely mentioned Space-X in passing.

So to say that Tesla became profitable because they sold out to China makes no sense. Since the Model 3 production ramp completed, they've had 7/9 quarters of profit (less than half being in 2020, or Shanghai-related). Prior to that, they had 7 straight quarters of losses.
I can't can't afford Tesla stock, so I don't really follow it. I can however many consecutive loss quarters coming in before the China factory opened. Musk has always amazed me in that the more money Tesla lost, the higher the stock price became.

Now, how about if I phase my original statement a bit differently, so I don't have any more corrections, statistics, or graphs, coming back

"Tesla didn't become reliably profitable until they opened the factory in China". OK?

But, if as you say, Tesla became profitable because of the model 3, then one has to wonder why Musk started at their top of the price range and worked backward from there, instead of the other way around,.
 
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Shirley Dulcey

Posts: 12   +6
The article doesn't mention why Tesla's stock price went up so much when they were accepted into the S&P 500. Part of that may be additional confidence by the investing community at large, but the biggest reason is that index funds were immediately forced to buy a bunch of TSLA shares. Similarly, companies experience an immediate fall in stock price if they are dropped from the index (rather than leaving it because of a merger, acquisition, or being taken private), though such companies are usually already struggling so it can be hard to sort out the effect.

It's common for a new and growing company to show losses for years. Amazon was not consistently profitable for its first 20 years of existence. What finally turned things around was AWS (the cloud services that Amazon sells to lots of companies); that's where they make most of their profits, not selling physical or digital goods.

Tesla received a lot of tax benefits in its early years; not so much now. Tesla vehicles are no longer eligible for the federal EV tax credit, though they are still eligible for tax credits in some states. They still benefit from more general incentives like the investment tax credit, and by selling their carbon credits to companies that make less environmentally friendly cars.
 
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captaincranky

Posts: 16,211   +4,971
Tesla received a lot of tax benefits in its early years; not so much now. Tesla vehicles are no longer eligible for the federal EV tax credit, though they are still eligible for tax credits in some states. They still benefit from more general incentives like the investment tax credit, and by selling their carbon credits to companies that make less environmentally friendly cars.
I published a list of Tesla factories from Wiki above.
Note that ir doesn't mention the battery, "Gigafactory" built for battery construction, since Panasonic has a lot more invested than does Musk

So, after the tax credits, (as you mention), dried up, his first fully functioning, "giga-factory", was built in Shanghai, China."

I"m going to take a wild guess, and say that Musk likely got quite a few "concessions", from the US government, to move back to Texas, which BTW, isn't built to the point of production yet.

So basically, Musk "took his ball home to China", and most likely had to be coerced to bring it back here. Because after all, he can now leverage the threat of moving to China, over each business venture he proposes.

EDIT: now I suppose I'll be seeing more graphs, profit statements, and be told what a nice guy Mr. Musk really is.
 
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Note that ir doesn't mention the battery, "Gigafactory" built for battery construction, since Panasonic has a lot more invested than does Musk
Panasonic has far less invested in Giga Nevada than Tesla. Tesla owns the land and the buildings and the equipment with which it builds the drive units (motors, transmissions and controllers) for all its North American built Model 3 and Y vehicles (until Giga Texas opens) as well as the equipment with which it turns the cells produced by Panasonic into battery modules and the modules into packs for those vehicles. Panasonic has invested in the equipment to build the cells and has purchased some of that equipment from Tesla Grohmann Automation. Because Tesla has contracted to purchase all of Panasonic's production, generally accepted accounting principles (GAAP) require that Tesla carry the value of the Panasonic owned equipment on its books as leased assets with an offsetting liability included in debt and finance leases. Tesla has similar, much smaller, arrangements with other suppliers who are co-located in its Nevada factory.
 

Endymio

Posts: 1,079   +900
OTOH, Both Musk and his customers have gotten tax breaks up the wazoo since Tesla's inception.
Blame that guy who flew to China to pick up his bribe for that also. EV tax credits are a Leftist phenomena, based on the belief that more batteries are required to save the human race from extinction.
 

captaincranky

Posts: 16,211   +4,971
Blame that guy who flew to China to pick up his bribe for that also. EV tax credits are a Leftist phenomena, based on the belief that more batteries are required to save the human race from extinction.
I thought that the far right's maniacal determination to overturn Roe v. Wade, and eliminate abortion, were more of a threat to a food shortage due to overpopulation.

I think electric vehicles are impractical for some, and not workable in certain situations.
For example, I think we're a long way off from electric powered multi-mach jet fighters, and world peace that would eliminate

For those applications where electric power works, and fills their needs. go for it.
 

Endymio

Posts: 1,079   +900
I thought that the far right's maniacal determination to overturn Roe v. Wade, and eliminate abortion, were more of a threat to a food shortage due to overpopulation.
This isn't 1970, the days of the Club of Rome, ZPG rallies, and Soylent Green. Today, our biggest problem is that we all eat too much, not incipient starvation, and many industrialized nations aren't even having enough births to support their current population, much less grow. And in any case, I support abortion strongly, despite the fact that Roe v. Wade itself is quite shaky on constitutional grounds.
 

JamesBlond

Posts: 31   +14
For Tesla to turn a profit, Musk had to sell out to China. You know, new "giga-factory" there and all that.
He ain't selling out, do you not know his not American..??? He is doing the complete opposite, he is gathering wealth from nations of the world to make his own