Elon Musk, PayPal Pioneer, Is Paper-Rich, Cash-Poor

http://www.nytimes.com/2010/06/22/business/22sorkin.html

by donohoe • 16 years ago

120 52 16 years ago

MJR• 16 years ago

"It is pretty aggravating," he told me, referring to the rumors floating around about him...

Yet the article does little more than add to the sensational bonfire. He values his investments, so he's prioritized them. It seems like his friends see him as an investment - a good one in my opinion, and have chosen to help him out. With the IPO coming he'll be able to get square and that still leaves him in a fantastic position.

He made the choice to be cash-poor and it seems he did so not out of ignorance but with an understanding that he had income sources(friends, businesses, etc) that would help him get through any dry spell. The divorce certainly doesn't help, but this seems pretty logical for an entrepreneur.

eli• 16 years ago

I agree that this is a poor article. But you assume he's being completely truthful.

samratjp• 16 years ago

Regardless of whether he is being truthful or not, Tesla Motors' products do seem to speak for itself. He'll be fine 8-)

brianobush• 16 years ago

monthly expenses of 200k? Wow, that is quite a lavish lifestyle. Just wondering what costs so much... that is more than 6k per day.

vaksel2• 16 years ago

cocaine is expensive

although since he is going through a divorce(I think), it's probably lawyer fees

MikeCapone3• 16 years ago

> cocaine is expensive

Is this a joke? Because that's not an accusation to make lightly, IMHO.

houseabsolute• 16 years ago

Hard to believe he consumes twice in a month what my wife and I do in a year.

rjett• 16 years ago

Hard to believe that you and your wife consume in a year what I would consume in 7 years if I stuck to my current standard of living :)

qq66• 16 years ago

This is clearly a man who doesn't do anything at ordinary scale. He eats bigger than we do, travels bigger than we do, and starts companies bigger than we do.

aptimpropriety• 16 years ago

Can anyone comment on the divorce situation? The seemingly huge requests by soon-to-be ex-wife? I mean, CA community property and all, but nonetheless, any insights/opinions? (for those of us not up on the gossip)

quickpost• 16 years ago

FWIW, I'd try to avoid demonizing the ex-wife in this scenario (not that you are). I've followed her blog off and on during the proceedings, and honestly, her demands don't seem terribly unreasonable:

"The irony of this whole thing is that I don't want hundreds of millions of dollars. I think my ex-husband is brilliant and works like a demon and deserves his success and his wealth. But I also think -- after eight years of marriage and six kids (five surviving) -- that I am entitled to a fair settlement..." http://moschus.livejournal.com/140502.html

She's probably asking for somewhere between 5 and 10% of their combined assets, near as I can tell. I think the bigger issue in the divorce is one of pride, in that Elon doesn't want to give up any shares in the companies he's built... it's more than just money to him.

/back to work

philk3• 16 years ago

The thing is, 5-10% of their shared assets works out to over a hundred million dollars [1] if you include the slices of his companies that she's asking for. So while she couches her request in reasonable language she's actually asking for (IMHO) an unreasonable amount of wealth given she didn't create it in the first place.

[1] Which is over forty times the lifetime earnings of the average American simply for marrying well.

pavs2• 16 years ago

Man this is such an ugly situation to otherwise successful and (seemingly) nice people. Almost scares you to never get married or have children. Actually not only this case, whenever I see high profile divorce cases, I get baffled at divorced couple fighting over millions of dollars, when they are already millions of dollars rich and will maintain a comfortable life for the rest of their life with their current wealth.

I guess I make the assumption that rich people are rational, or maybe they are rich because they are not (always) rational when it comes to money?

I like to think that Elon Musk is not in it for the money, and it seems like so from his actions. He seem to take money from one success story so that he can invest in his dream goals of making the world a better place. Money is just a by product of his actions.

On the other hand, reading some of his wife blog post gives me the impression that she seems like an OK person and not generally spiteful or vindictive.

Utterly confused and scared of getting married.

philwelch2• 16 years ago

Did you see this post? http://moschus.livejournal.com/141570.html

As we discussed around here (http://news.ycombinator.com/item?id=1405512) her blogging seems to stink of narcissism and entitlement.

ZachPruckowski• 16 years ago

The guy ran off on his wife with a 24-year-old actress. A wife who helped him raise 5 kids and who stood by him through thick and thin when he was building companies like PayPal and Tesla and SpaceX (they met in college). I don't have a lot of sympathy for someone who pulls something like that and doesn't expect to take a hit in the pocketbook for it.

gwern• 16 years ago

You read too shallowly. Wikipedia says she met him in college, not that they married there. In point of fact, they married in 2000, sometime around March.

By 2000, Musk had already helped found and sell Zip2; Paypal had already been founded and in just 2 years would grow to the point Ebay would buy it for 1.5 billion; immediately on selling, 1/3rd of the way through the marriage, Musk founds SpaceX; halfway through the marriage, he founds Tesla and a bit after that SolarCity.

(I too have little sympathy, but rather for someone who married a millionaire, signing a prenup (which no one has demonstrated to be unfair or stingy), and now expects to break it when the stakes have gone way up.)

daniel-cussen• 16 years ago

It's pretty shocking to see two amateurish blog posts about divorce proceedings make it to the nytimes. That's gotta suck.

EasyCompany• 16 years ago

No issue here....just a divorce and business as usual for a millionaire!!! Next better ny article.....

callmeed• 16 years ago

I have never heard the term "PayPal Mafia" until this week (3 times). Is this new?

starkfist4• 16 years ago

No.

http://en.wikipedia.org/wiki/PayPal_Mafia

Dirt_McGirt• 16 years ago

Well now, that page seems to have been created 6 months ago, so I'd argue it's pretty new.

nixme• 16 years ago

Baader-Meinhof Phenomenon (a recency effect) I'd guess.

hop2• 16 years ago

Tesla is a cool project/company, but car companies have never historically been good investments. Massive competition from many established companies, $200M+ tooling costs to roll out a new car, low profit margins, high marketing costs, etc... Not the recipe for striking it rich long term, but he will surely make a handsome sum if he sells at the IPO.

But SpaceX, with their $1.6B contract from NASA and options for $3.6B, their successful maiden flight two weeks ago of their Falcon 9 rocket - http://www.spacex.com/F9-001.php, their newly inked $492M contract with private satellite company Iridium http://www.spacex.com/press.php?page=20100616 ... and they are just getting started. This could/probably will lay mega-fortune to Musk.

I too would leverage myself to the moon to keep that equity.

lrm2422• 16 years ago

Car copmanies haven't been good investments? Seriously? I mean, sure, if you're talking about the last 10 or 20 years, I can dig that. But if you're talking about from inception, you're wrong. Look at Ford:

http://www.google.com/finance?chdnp=0&chdd=1&chds=1&...

Not only has there been very nice asset appreciation but look at all those dividends. Huge dividends for a very, very long time.

unexpected• 16 years ago

I think he's arguing that Ford is an outlier. Remember, when the car was invented, there were hundreds of car companies (remember the Stanley Steamer?)

If you went back to 1920, and compared the car companies from then and now, Ford might be the only one that has still remained. Even classic nameplates like Oldsmobile, Pontiac, and Buick have fallen off.

If you went back to the 1960's, and told someone that Oldsmobile and Pontiac would cease to exist in 50 years, they would have called you crazy.

Is this going to happen to the electric car as well? Will Tesla be the next Ford or the next Stanley?

*The same trend can also be seen with PC manufacturers. How many different PC companies were there in the 1980's. How many exist now?

zavulon2• 16 years ago

FWIW, it's extremely suspicious that he appears broke in the middle of a divorce - of all times. But he may be telling the truth, obviously I don't know his situation.

What I do know, is when I get married, it won't happen without a prenup. There's no WAY I'm going to jeopardize the work of my lifetime.

phaedrus• 16 years ago

IIRC from an earlier article, Elon Musk actually did have a prenup, but his (ex-)wife's lawyer is filing to get it overturned.

zavulon2• 16 years ago

They have a "postnup", which is very different.. Apparently, she still signed it even though they were married already (which was not that smart of her to do)

Elon Musk, PayPal Pioneer, Is Paper-Rich, Cash-Poor

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