Elon Musk Now Owns More Than 1/5th Of Tesla, Has Taken $2.1 Billion Hit This Year

1 year ago by Mark Kane 54

Tesla Factory

Tesla Factory

Public Trust Can Take Time To Accumulate

Elon Musk holds now about 22% of Tesla Motors

The Los Angeles Times recently reported that Elon Musk, CEO of Tesla Motors, increased his stake in Tesla to about 22% (29 million shares).

At a market cap of some $19.7 billion (as of yesterday’s close/February 11th), the CEO’s share is worth about $4.3 billion at today’s prices.  With Tesla’s slide of some 37% this year (from December 31st) that is an “on paper” loss of about $2.1 billion.

The latest investment was about $100 million and more than $50 million in taxes:

“A company spokesperson said Musk had exercised the stock options, said to have been valued at about $7 a share…”

“This week Elon increased his investment in Tesla,” the company said. “He exercised and held 532,000 stock options”

Musk seems unwilling to sell Tesla shares, which would be very lucrative. He instead is buying more, which is important, especially in the current market situation while share prices falling…that is, if the company has as bright a future as the CEO suggests.

Source: The Los Angeles Times via Autoblog

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54 responses to "Elon Musk Now Owns More Than 1/5th Of Tesla, Has Taken $2.1 Billion Hit This Year"

  1. tftf says:

    Musk took an even worse hit (at least in percent) in SCTY this year:

    Solarcity is down -65% YTD

    1. evcarnut says:

      At $7 a share Its a NO Brainer…Its Impossible to lose at that price.. But that is one of the benefits one gets when they “WORK FOR FREE” & don’t draw a Paycheck …Stock Option!…Just Like Lee Iacocca did when he rescued Chrysler from Bankruptcy & everyone Criticized him, as he saved their Jobs & Their Lives …

      1. tftf says:

        evcarnut, if you believe in SCTY or TSLA buy shares with both hands, mortgage your house, become rich and then buy an island with the gains…all thanks to Elon Musk.

        I won’t stop you, buy, buy, buy.

        But please don’t complain when it doesn’t work out in the end.

        1. evcarnut says:

          Been There Done That & Trust Me! I will not be Complaining , I never ever Did & Never will complain no matter what Happens! ..Further More I Never ever HAD TO MORTGAGE MY HOUSE EITHER…When I stated “N0 Brainer” If you read my Blog carefully…, I was referring to the 532,000 Stock Options That Elon Gets To Exercise At $7 Per Share ,When these have a market Value Of $150.00 PS Plus as we speak.You Missed that Part..Cheers

        2. jerryd says:

          tftf,, that is a smart idea investing in the 2 best growth companies leading their fields at bargain prices.
          Tesla is moving on the 3, making boatloads on the S and PowerWall batteries.
          And SC very profitable leasing and shortly to be the largest most cost effective PV panel producer is another bargain.

    2. Pushmi-Pullyu says:

      tftf continues his anti-Tesla FUD campaign:

      “Solarcity is down -65% YTD”

      As I understand it, SolarCity’s business model depends on regulations requiring electric utilities to pay owners of residences and commercial buildings full market rate for any electricity provided to the grid. That gives private generation of electricity from solar power more profitable than utilities, because the private owner doesn’t have all the overhead that the utility does; overhead such as maintaining the infrastructure of the grid.

      Also, as I understand it, some regions (States and/or municipalities) are phasing out the regulation for utilities to pay private solar energy providers a profit.

      In other words, the entire business model that SolarCity is built on is in danger of collapse, and in fact eventual collapse seems almost guaranteed, because incentives to encourage solar power installations will be phased out sooner or later.

      But you’d have to be a real anti-Tesla FUDster — like tftf — to insinuate that somehow this is a red flag for Tesla. Tesla Motors sells a real and highly successful product — the Model S; and is following that with the Model X.

      Tesla’s business model isn’t a bubble, and is in no danger of collapse. Tesla’s business model is to sell a solid product; one that regularly gets astonishingly good reviews. Most people would call that a successful company.

      Or at least, most people who aren’t stock short-selling FUDdites like tftf.

      1. tftf says:

        Do you understand the connections?

        Musk owns a 21.6% stake in SolarCity, holding more than 21 million shares worth $588 million. Musk owns a 21.9% stake in Tesla, a stake worth $6.08 billion.

        http://www.marketwatch.com/story/heres-how-elon-musk-balances-tesla-solarcity-stocks-2015-11-18

        That was in November 2015.

        1. Pushmi-Pullyu says:

          I certainly see this has nothing to do with Tesla. I certainly see you’re desperately trying a guilt-by-association, mudslinging anti-Tesla FUD argument. Hopefully it’s as obvious to everyone else, too.

          Now crawl back under your bridge, troll.

          1. tftf says:

            It’s collateral and if one company goes poof in the worst case Musk will probably have to reduce his stake in the other(s) – causing share prices to slide further.

            Here’s an older article on the subject:

            http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?IR=T

            I’m done talking to you, PP, since your responses consist of the usual catchphrases such “FUD” or “trolling”.

            1. Pushmi-Pullyu says:

              tftf continued his FUD campaign:

              “Here’s an older article on the subject:

              http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?IR=T

              This is a typical FUDdite tactic. Link to an article which doesn’t support your assertion, in the hopes that people will just take your word for it that it supports what you’re claiming.

              “I’m done talking to you, PP, since your responses consist of the usual catchphrases such ‘FUD’ or ‘trolling’.”

              I shall try to bear up under the terrible burden of a troll threatening to not respond with more troll posts. [/snark]

      2. Nelson says:

        When SolarCity begins to add PowerWalls to their installations and houses get off the grid, it will be the Utility companies in a world of hurt. When SolarCity installed at my house they told me a PowerWall would come.

        NPNS! SBF!
        Volt#671

        1. ModernMarvelFan says:

          I doubt it unless your roof got enough space for “way too much solar generation”.

          Grid connection is still way cheaper than Powerwall installation.

          And I say this with Solar City panels on top of my roof…

        2. zzzzzzzzzz says:

          How much does it cost per kWh everything included to get electricity from SolarCity? I bet it is more than US average grid price.

          Net metering will gradually go away, but if you look at Nevada, it may stay grandfathered for those who already got it, so it would save SolarCity from bankruptcy, they will still have their old clients paying.

          No, batteries will not save you from paying fair price to the grid to provide backup. That is fixed monthly cost based maximum power you had used from grid. Big power plants can provide PV solar for much less than SolarCity, the same is for batteries.

          1. Pushmi-Pullyu says:

            zzzzzzzzzz said:

            “How much does it cost per kWh everything included to get electricity from SolarCity? I bet it is more than US average grid price.”

            What matters to the customer is whether or not he can save money in the location where he has the building, not what the average nationwide price for electricity is. The average price doesn’t help at all if your local electric utility is charging more.

            SolarCity’s business model doesn’t work everywhere. If I understand it correctly, it only works where net metering is in effect, which certainly isn’t everywhere. (For example, that doesn’t exist where I live, in northeastern Kansas.)

            But obviously it saves customers money in some areas, or SolarCity wouldn’t get any customers at all.

      3. Nelson says:

        That’s why I think Utility companies are branching out and installing public charging stations. They know the house business will fade.
        http://insideevs.com/sdge-gets-approval-to-install-thousands-of-electric-vehicle-charging-stations/

        NPNS! SBF!
        Volt#671

      4. jerryd says:

        PP, while utilities are fighting back they will lose like they lost in Cal.
        Solar leasing is a very robust income stream with a payback of just 1-2 yrs then near pure income for 18-19 more yrs.
        They are about to become the biggest solar panel US producer of the lowest cost panels just as solar is skyrocketing.
        With the Tesla Powerwall they can sell offgrid power bypassing the utility if the utilities get too greedy, and making all the money.

    3. ffbj says:

      Undervalued.

  2. Three Electrics says:

    Exercising his options now, while the stock is down, is a reasonable choice. It reduces the cost basis of his shares and thus, the taxes he will pay.

    If this is a discretionary sale, he is likely in violation of insider trading laws. Thus, I expect it was executed according to preestablished plan (rule set).

    1. Khai L. says:

      It’s not a violation, sinces options were granted in the past. If he had exercised and _sold_ those holdings, then it would’ve had to follow rule 10b

      1. Three Electrics says:

        Insider trading governs stock purchases as well as sales. An option exercise is a purchase.

    2. evcarnut says:

      Do you know the Difference between Shares, Of a Company Stock & Live Stock?. Bet you Don’t !

      1. mr. M says:

        Cattle is live stock 😉 😀

    3. Pushmi-Pullyu says:

      Three Electrics said:

      “If this is a discretionary sale, he is likely in violation of insider trading laws.”

      Good grief, 3E, this is going beyond mere posting FUD. This isn’t just factually incorrect. You’ve committed libel here.

      And I hope the moderators here will delete your post, because it opens you up to a defamation lawsuit.

      1. Three Electrics says:

        According to this blogger: http://www.naspp.com/blog/2016/02/speculating-about-10b5-1-plans.html

        … three Tesla executives have 10b5-1 plans. Likely Elon is one of them.

        1. Pushmi-Pullyu says:

          Let’s just cut thru the blizzard of B.S. you’re throwing out here, okay Three Oil Companies Three Electrics?

          If there is ever a time when an executive of a company is allowed to exercise his stock options, it’s right after the company has issued its latest financial report.

          The way you seem to be attempting to define it, no company exec could ever either buy or sell stock in his own company. In other words: You apparently don’t understand what the term “insider trading” actually means.

          That is, assuming you actually believe what you’re posting. More likely you know better, and you’re just spouting anti-Tesla FUD, as usual.

      2. sven says:

        Hey Matlock,

        Did you notice the “If” at the start of the sentence you quoted?

        Did you notice the sentence after the one you quoted where Three Electrics said: “Thus, I expect it was executed according to preestablished plan (rule set).”

        A libelous comment posted on a forum of website does NOT open the website up to a defamation lawsuit. Fear monger much?

        1. Pushmi-Pullyu says:

          sven said:

          “A libelous comment posted on a forum of website does NOT open the website up to a defamation lawsuit.”

          That’s a rather dangerous overstatement. But if I wanted to sue a social media provider for defamation, I’d do it in a court that uses British law rather than American, because it would be far easier to win there.

          http://www.zdnet.com/article/twitter-could-be-sued-for-its-users-unlawful-tweets/

          1. sven says:

            It’s four years after your news story and Twitter has not been successfully sued for libel in UK. Much ado about nothing.

    4. evcarnut says:

      His Options , If You read the article Are @ $7.00 Per Share. That Means He Pays $7.00 Per share for the 532,000share options he was granted.,This was agreed years go When he was Granted the options regardless of Market Value which is Aprox.$151.00PS @ the Close of the market today. This how he makes his money. He’s NOT ON THE PAYROLL.. Get It ! .You Don’t Know Stock From live Stock…

  3. ffbj says:

    For all the promises that some point too that he has broken, according to them, the: I will not sell Tesla stock, is one example of a core promise he made which he has kept.

    Also, making the best car ever made, and now a second one, with the prospect of a third, best car ever made for the masses, it’s already the greatest achievement ever made by a car company. It’s the twilight of the ice and the dawn of the ev. Tesla produces the best evs in the world, it’s a natural, logical, progression to conclude that though their stock is valued, probably too high, that in the future it will be worth so much more.
    Additionally, Musk, holding that many shares acts as a backstop to the stock price falling to much. So if we can believe that everything that Musk is saying about future prospects, and there lies the rub, then it would not be wise to bet against it.

    I would be buying more of their stock too, if I had the money.

    1. Three Electrics says:

      The “best car ever made” title changes every few years as technology evolves. It is particularly easy to do when you also hold the record for most money lost on each car. That’s a game other manufacturers are unwilling to play, but if you play it long enough, you might win–e.g. Amazon. Of course, for every Amazon there is also a pets.com.

      1. ffbj says:

        I am not sure understand the meaning of the word ever.

      2. Paul says:

        It is tiring, these people who again and again say that Tesla loses a lot of money on every car. They don’t understand the basics of a young company.

        In order to grow you have to invest and in early stages often it is necessary to invest every penny of your income and more (from the bank) to grow.

        Tesla want and needs to sell a mass market car for a mass market price. The word “mass” means “a lot”. But first it has to built them and therefore invest in the tooling and in the future structure of being a large company instead of a small.

        Also they decided to built their own charging infrastructure, since nobody else did it in a sensable way.

        Large, mature car companies don’t need to invest in exponential growth and neither in the fuel infrastructure.

        We all want this good EV for a good price. The world needs it. And they are investing in it. Their margin on every car is more then okay, but they invest every penny they can lay their hand on. That’s not silly or wrong or misleading or stupid. It’s called a strategy.

        1. Hari says:

          Very well said. If you are a new company making your first car and if it takes five years for it to be developed, you are making a loss the first five years and probably the sixth and seventh year on a yearly basis until the capex is recouped from the margings. It’s not like they didn’t know this and suddenly found out that they are making losses.

          I’m waiting for the day when people will understand this basic.

      3. Kumar says:

        Yeah, it’s easy to build the best car ever. Next!

      4. Pushmi-Pullyu says:

        Three Electrics said:

        “…most money lost on each car.”

        Ah yes, there it is again. The Big Lie that FUDdites repeat so often they have apparently convinced themselves it’s true!

        So, by that *cough* reasoning *cough*, 3E, Tesla should make fewer cars, so it would lose money hmmm? Maybe it should stop making cars altogether, so it won’t lose any money?

        Idiotic, not to mention Ludicrous™.

        Telsa’s current gross profit margin is currently down to “only” 20% per car, which is still significantly better than industry average for automobile manufacturers. As the volume of Model X manufacturing increases this year, that profit margin should rise back closer to the approx. 25-27% that Tesla has enjoyed in the past.

        You know… those profits the anti-Tesla FUDdites like 3E keep telling us Tesla isn’t making. 😀

        1. Three Electrics says:

          You cannot compare gross margin between Tesla and other manufacturers, as they are computed differently.

          Furthermore, gross margin is not the same as profit, and profit and loss does not include capex.

          1. Pushmi-Pullyu says:

            And yet, I’m able to see the difference between “unprofitable” and “deferring profits by re-investing”.

            I’m also able to see the difference between “losing money” and “investing in future growth”.

            3E, you can’t even tell the difference between losing money and making an investment!

            Now quit whining and crawl back under your bridge, troll.

  4. Michael Will says:

    Taking a hit would mean he sold it at a loss. He didn’t sell tho… and so he didn’t lose anything. It is good to know he is taking a major stake in his on project, so it can’t be bought and derailed out as easily. Stock price will double in the next two years anyways when model E I mean 3 comes out and undercuts the average gas car price wise…

  5. Pushmi-Pullyu says:

    The article says:

    “…that is an ‘on paper’ loss of about $2.1 billion.”

    Thank you for clarifying it wasn’t an actual loss, contrary to what the headline states, but only an “on paper” loss. Nobody loses money on stocks unless they sell them for less than they bought them, despite what so-called stock “analysts” try to tell us.

    “Musk seems unwilling to sell Tesla shares, which would be very lucrative. He instead is buying more, which is important, especially in the current market situation while share prices falling…”

    While I’m no stock investor, if I was, I’d certainly be mightily tempted to invest in TSLA now, before the stock price rises sharply again, as it very likely will.

    (Disclaimer: Please do not use this comment as investment advice. TSLA is a very volatile stock, and cannot be considered a safe investment in any circumstances.)

    1. tftf says:

      “While I’m no stock investor”

      Considering how you praise Tesla in every post I’m surprised you aren’t all in on TSLA (and maybe also SCTY) with all your savings.

      1. Pushmi-Pullyu says:

        It’s no surprise that someone like you, who spends so much time posting in an attempt to manipulate stock prices, can’t believe that anyone would be interested in Tesla without having a financial motive.

        Just like the Grinch, who couldn’t believe the Whos in Whoville would still celebrate Christmas despite him stealing all their presents, your heart is two sizes too small. Unfortunately, unlike the Grinch, you are likely to never learn better.

        I feel sorry for you, tftf.

        1. PVH says:

          Well actually it is OK to make losses while growing fast although it is no fatality as capex expenses being amortized on the useful life of the investment, in average only a fifth of those expenses I would say goes to profit and loss account, rest being followed in the accounts as an asset (this based on an investment 5 years useful life on average). So here both sides are correct (tftf and PP). Tftf is correct as by now Tesla is not a startup anymore and even with a 50% growth for sure loss should be smaller than it is now, PP is correct because indeed it is quite common that fast growing cpies do report losses because of those capex expenses although this level of losses is worrisome, that is one of the reasons stock is punished. So no name calling necessary (Fudster etc…). The problem with shorts you see is that often they had a strong understanding of companie’s finances while EV enthusiast are often, well…enthusiast. So of course there is FUD but often those shorts should be listened to carefully as a good portion of what they write makes perfect sense even if made a little to harsh to serve their (shorts) purposes.

      2. Pushmi-Pullyu says:

        tftf said:

        “…I’m surprised you aren’t all in on TSLA… with all your savings.”

        One thing I’ve learned about investing, from my heavy participation in the now defunct TheEEStory forum, is that it’s a very bad idea to make a financial investment in any company you’re emotionally invested in. Investment decisions should be made calmly, dispassionately, and rationally. Allowing emotions to influence investment decisions is one reason all too many investors lose money.

        If I was to play the stock market, TSLA would literally be the very last stock I’d invest in, because I’m far too emotionally invested in Tesla Motors, the company.

        And unlike you, tftf, I don’t confuse performance of the company with market performance of the stock.

        1. tftf says:

          “rom my heavy participation in the now defunct TheEEStory forum”

          I hope that experience opened your eyes betwen alt-energy/green fantasy and reality in terms of timelines, prices and promises by start-ups in general.

          1. Pushmi-Pullyu says:

            It certainly did. It made me far more skeptical of high-tech startups which refuse to show a prototype, refuse to allow third-party testing, and string out endless promises and never deliver. (Hence my high level of skepticism of, for example, NanoFlowcell and its cars.)

            Tesla was accused of a bit of that, back before they started delivering Roadsters. That happened back in 2008, when they delayed delivery about three times, for a total of — if I recall — about nine months.

            Not so much since. Funny how all those rave reviews of Tesla’s cars have put a stop to skeptics claiming Tesla was selling “vaporware”. 😀

            It also made me more appreciative of companies which produce real, well-engineered, high-tech products which they try hard to give good support to. Like, you know, what’s that new EV maker? Oh yeah — Tesla Motors. 🙂

  6. Steve Strange says:

    “At a market cap of some $19.7 million”

    Mark — I assume you meant “billion”. 🙂

    Thanks for the article!

    1. Jay Cole says:

      Whoops, seems like that should say billion…I’ll just go ahead and edit that one /thanks, fixed

  7. ModernMarvelFan says:

    I just put in my buy order of TSLA today…

    Hopefully it will make me enough money post tax for the $1000 deposit by April 1st.

    1. ffbj says:

      That’s the spirit. I did the same. Only thing I own that did not go up today, but that is to be expected.

      1. ffbj says:

        Oops! Tesla did go up a tiny bit today. Days like this don’t happen often.

  8. Anon says:

    Save the Earth by making everyone build EVs and power them with solar + storage batteries. Use that disruptive tech-combo to gain monies for the start of a Mars Colony…

    I see nothing crazy about that kind of long term thinking.

    1. Mister G says:

      Actually, Musk thought that Tesla and Space X had a 90% probability of failure…I’m glad he was wrong.