“It’s been raining money on fools for too long,” the billionaire scolded on Twitter, forgetting a little quickly that he largely benefited from this magic money.
Never stingy with little controversial phrases, Elon Musk stood out on Friday for a new outing on Twitter, while the clouds of recession are gathering over the United States.
“It’s actually a good thing. It’s been raining money on fools for too long. Some bankruptcies have to happen” slice the billionaire.
“Also, all the Covid stuff at home has got people thinking they don’t really need to work hard. Waking up will be rough!” he warns.
The opinion of the boss of Tesla and SpaceX is all the more controversial as the entrepreneur has largely benefited from the abundance of liquidity in recent years. A money, sometimes described as “magical” by its detractors, which made the title of Tesla climb on the stock market to impressive heights. It was the automaker’s incredible valuation, which is more powerful than Toyota despite very low deliveries by comparison, that made Musk the richest man in the world.
In 2009, the entrepreneur had benefited from a loan of 465 million dollars thanks to a vast federal recovery plan after the global financial crisis. A rain of money that has kept Tesla afloat and financed the development of the Model S.
Cash long in the red
Tesla has also been able to take advantage of significant tax breaks to release its electric vehicles. As pointed out by Guardian, the company also derives the majority of its revenue not from the sale of vehicles but from the resale of carbon credits to its rivals. A way of reminding that Tesla does not necessarily have such strong kidneys, given his business model.
The company has not been spared by the cold snap on the markets in recent weeks, losing a third of its value since the start of the year, while Musk’s intentions on Twitter are still unclear.
Elon Musk also assured that “companies which by nature have negative cash flows (that is to say destroyers of value) must disappear to stop consuming resources”. Again, the Guardian recalls that Tesla was only profitable in 2020, accumulating billions of dollars of negative cash before. Again, low interest rates and “magic money” helped the company to avoid going under.
As for its other major company, SpaceX, it depends on public contracts with NASA or with the United States Department of Defense.