Back In 2013, Elon Musk Came Within An Inch Of Selling Tesla For… $6 Billion

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Everyone knows the broad strokes of Elon Musk and Tesla. Even after promoting some $8 billion price of shares in current weeks to partially fund his purchase of Twitter, Elon’s fairness stake within the electrical automotive maker is the first driver of the fortune that makes him the richest person in the world at this time with a quarter-trillion net worth.

As of this writing, Tesla sports activities a market cap of $900 billion. At varied occasions in current months, Tesla has had a $1 trillion market cap. Even on the $900 billion stage, Tesla is at present the sixth most dear firm on the planet by market cap.

Right here is the present record of the six most dear public firms:

  • #1) Apple – $2.6 trillion
  • #2) Saudi Aramco – $2.4 trillion
  • #3) Microsoft – $2 trillion
  • #4) Google – $1.5 trillion
  • #5) Amazon – $1.3 trillion
  • #5) Tesla – $900 billion

Tesla’s place within the above record, you may be stunned that lower than a decade in the past Elon was determined to promote the corporate. And never for $500 billion. Or $100 billion. Or $10 billion.

Back in 2013 Elon virtually offered Tesla, an organization that might finally make him the richest particular person on the planet, for simply…

$6 billion

Christian Marquardt – Pool/Getty Photographs

 

 

It may be exhausting to imagine now, however within the early a part of 2013, issues weren’t going too properly for Tesla. The model was plagued with manufacturing points that precipitated so many orders to be deferred that Musk really had shut down the Tesla manufacturing unit quickly to chop prices and save sources whereas they analyzed their many points.

Determined for a manner out, Elon approached Google co-founder Larry Page, who was at the moment was nonetheless CEO, to try to organize a sale.

Musk evidently wasn’t trying to simply take the cash and run, nonetheless. Regardless of his ostensibly weak bargaining place, Musk connected a number of strings in his proposal to Google.

Basically, Elon provided to promote Tesla for $6 billion, however provided that Google agreed to place up one other $5 billion for manufacturing unit expansions. He additionally wished Google to agree to not both break up or shut down Tesla till it was capable of deliver its third-generation electrical automotive to {the marketplace}, and he additionally wished to proceed operating the corporate for eight years, or till that benchmark was reached.

Larry Web page agreed to the deal. The 2 founders shook fingers on the deal and despatched their respective authorized groups off to hammer out the small print.

Fortunately for Elon, in the long run the deal didn’t occur.

Over the course of months that it took to scope out and finalize the small print, Tesla solved a few of its greatest manufacturing points. Much more promising, Tesla new automotive orders started to spike.

This little tiny little bit of respiratory room gave Elon and Tesla sufficient time to get well and reevaluate. When new, extra assured footing, Elon went again to Larry and instructed him the deal was off.

With a 20% stake within the firm at the moment, had the deal gone via Elon would grossed $1.2 billion from the sale pre-tax. After taxes he would have walked away with round $600 million. As we speak Elon owns roughly 17% of Tesla’s excellent shares. At a $900 billion market cap, Elon’s 17% stake is price…

$150 billion


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