So if you were suddenly more confident in the company you owned a big chunk of ...

"John Norris (AngryDrifter)" (angrydrifter)
06/14/2018 at 21:54 • Filed to: None

... and you wanted to up your investment of 500 shares, how many more would you buy?

Elon bought 72,500 shares to add to his 33,738,794, or so, shares.

!!! UNKNOWN CONTENT TYPE !!!

https://www.sec.gov/Archives/edgar/data/1318605/000149473018000005/xslF345X03/edgardoc.xml

That’s the equivalent of owning 500 shares and buying slightly more than 1 more additional share.

But by the headlines you’d think he’d about doubled his investment. The guy just knows how to make a headline.

!!! UNKNOWN CONTENT TYPE !!!

DISCUSSION (4)

Nick Has an Exocet > John Norris (AngryDrifter)
06/15/2018 at 01:38

Okay, but hang on a second. I own stock in a company where I joined as essentially Employee #1. You’re missing part of the economics. It makes me laugh a little because I’ve been in a similar position on a much smaller scale. (I’m currently vesting on stock that I basically can’t afford to buy).

Founders don’t simply “get” stock. They do have to purchase it. He likely purchased most of that 33,738,794 shares at under 1 cent each. He most likely paid under $100k. By comparison, he just bought an additional 1/500th for $25 million dollars.

He just paid about 50,000 times more money than his initial investment on a per share value. That’s a friggen news story, haha. You also have to account for the fact that very few CEOs will drop $25 million on stock at their own company.

E92M3 > Nick Has an Exocet
06/15/2018 at 07:26

Great point! Just the headline of him buying it, makes people think he THINKS it’s undervalued or knows something that will make it go up. He’s not dumb, he knows idiots will follow him and buy more shares. In turn generating more capital for it to survive on till they can turn a profit. He knows exactly how to counter bad press (in this case the layoffs). He’s playing the ultimate game of chess.

Thomas Donohue > Nick Has an Exocet
06/15/2018 at 10:34

While he paid much more than his initial investment, it’s still relative to what those same Tesla holdings are now valued at. He’s worth more than $20 billion at the moment.

Another comparison would be if you were a millionaire with $5 million in your portfolio, and then you bought $15,000 worth of stock. Not exactly something your broker would highlight on your monthly statement.

Interestingly, Tesla is the only public stock that Elon owns. (I imagine he has lots of private equity holdings.....)

John Norris (AngryDrifter) > Nick Has an Exocet
06/15/2018 at 17:03

(I’m currently vesting on stock that I basically can’t afford to buy)

I’ve had options before where I bought and sold in the same day so I didn’t need to cough up the dollars to exercise the options. Not sure if the same thing is available to you but it might be worth looking into.

He likely purchased most of that 33,738,794 shares at under 1 cent each

I don’t think he did quite that good, as he wasn’t quite a founder in 2003, but you made an excellent point. He did get in in 2004 and started throwing money at it every time it needed it or was facing bankruptcy. Your point is, it’s not an apples to apples comparison, and I concede that.

You also have to account for the fact that very few CEOs will drop $25 million on stock at their own company.

True, with a couple of qualifiers. Few CEO’s have $25 mil in chump change laying around, as apparently Musk does. Also few CEO’s have to do that to keep the Cinderella story going. Tesla with a $360 stock price will be much more attractive to bond holders or purchasers of additional stock then Tesla with a $250 stock price if they have to raise capital later this year.

https://www.bloomberg.com/graphics/2018-tesla-burns-cash/