Elon Musk could lose 99% of his wealth this month, then 99% of his remaining wealth next month and still be better off financially than 99.99% of everyone. He’s not ever going to experience financial distress.
The issue is, that rich people take on lots of debt with their assets as collatoral (e.g. Musk taking a loan from the Saudis for buying twitter). If Musks collatoral suddenly vanishes (s.g. Tesla breaks down within a month), then the massive 10 billion USD debt will still be there. And then he’ll be very very much in negative wealth.
Your assumption is personal or personally guaranteed debt, but the loan was likely (based on my reading the term sheets leaked) to the new entity that was going to purchase/merge with the pre-existing Twitter. That potential negative net worth wouldn’t be tied to Musk but the entity we now know as Twitter. Musk would not be in financial distress.
Edit: I may have misread what you wrote. The value of Tesla, Twitter, and SpaceX could go negative and Musk would still be wealthier than 99.99% of the world because personal guarantees are unlikely to be attached to that debt.
Tesla paid down much more debt than that before it was as profitable as it is now. $10 billion isn’t going to sink Tesla. Or SpaceX. They are both materially valuable in a way companies like Twitter are not.
Kinda… depends on how things got him there. The thing Elon can’t lose without really going off the rails is his ability to play the markets. Once the SEC kicks him out you’ll see him legitimately calling for open revolt.
Removing his ability to play stocks at all is removing his ability to earn money. His investors will leave him and the interest on his loans will liquidate him. We’ve seen more than a few of his type flash up and fade away. Milken. Pickens. Belfort. And of course, Madoff. Just to name a few we know by a single name.
He would still be wealthier than 99.99% of people but then so are a lot of folks on the planet. That’s 80 million people left over in that .01%. That’s not all that powerful at all. It’s removing him from the .00001% thats the goal. And killing his stock market abilities would do that over-night. It’s why he bought Twitter, he had to because this was the alternative.
I don’t think I’m following. Your example of Michael Milken is odd since he’s estimated to have between $5 to $10 billion in net worth today. Which kind of goes to my point that Musk is less likely to be in financial distress than win the Powerball Jackpot
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Elon Musk could lose 99% of his wealth this month, then 99% of his remaining wealth next month and still be better off financially than 99.99% of everyone. He’s not ever going to experience financial distress.
Well, yes and no.
The issue is, that rich people take on lots of debt with their assets as collatoral (e.g. Musk taking a loan from the Saudis for buying twitter). If Musks collatoral suddenly vanishes (s.g. Tesla breaks down within a month), then the massive 10 billion USD debt will still be there. And then he’ll be very very much in negative wealth.
Your assumption is personal or personally guaranteed debt, but the loan was likely (based on my reading the term sheets leaked) to the new entity that was going to purchase/merge with the pre-existing Twitter. That potential negative net worth wouldn’t be tied to Musk but the entity we now know as Twitter. Musk would not be in financial distress.
Edit: I may have misread what you wrote. The value of Tesla, Twitter, and SpaceX could go negative and Musk would still be wealthier than 99.99% of the world because personal guarantees are unlikely to be attached to that debt.
My understanding is Musk is personally on the hook for a good chunk of his Twitter loans.
If that’s the case he’s even more arrogant and less intelligent than I thought.
Pretty sure he is less intelligent than most of us thought 🤔
Tesla paid down much more debt than that before it was as profitable as it is now. $10 billion isn’t going to sink Tesla. Or SpaceX. They are both materially valuable in a way companies like Twitter are not.
Kinda… depends on how things got him there. The thing Elon can’t lose without really going off the rails is his ability to play the markets. Once the SEC kicks him out you’ll see him legitimately calling for open revolt.
That wouldn’t put him in financial distress. His ego would certainly be hurt but he’d still be wealthier than 99.99% of the world.
Removing his ability to play stocks at all is removing his ability to earn money. His investors will leave him and the interest on his loans will liquidate him. We’ve seen more than a few of his type flash up and fade away. Milken. Pickens. Belfort. And of course, Madoff. Just to name a few we know by a single name.
He would still be wealthier than 99.99% of people but then so are a lot of folks on the planet. That’s 80 million people left over in that .01%. That’s not all that powerful at all. It’s removing him from the .00001% thats the goal. And killing his stock market abilities would do that over-night. It’s why he bought Twitter, he had to because this was the alternative.
I don’t think I’m following. Your example of Michael Milken is odd since he’s estimated to have between $5 to $10 billion in net worth today. Which kind of goes to my point that Musk is less likely to be in financial distress than win the Powerball Jackpot
The problem isn’t losing 99% of your wealth. The problem is losing 101% of your wealth (or more), which is entirely possible.