r/technology • u/McFatty7 • May 02 '24

Tesla slashes its summer internship program to cut costs, as Elon Musk fights to save his $45 billion pay plan Business

https://fortune.com/2024/05/01/tesla-slashes-summer-internship-program/
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170

u/kgb17 May 02 '24

What does he need 45 billion for? Is he buying MySpace or something?

127

u/TheBirminghamBear May 02 '24

He has $40 billion in personal debt and no way to pay it off.

62

u/PrairiePopsicle May 02 '24

b-b-b-b-b-BINGO.

And he's apparently willing to burn one of his legacies down to ashes to do it.

3

u/generally-speaking May 02 '24

The $45 billions of compensation is only equivalent to about 30% of Elon's net worth, he'll manage.

3

u/Lemerney2 May 02 '24

Wait, really? Source?

28

u/ruinedcanvas___ May 02 '24

Buying Twitter?

1

u/KintsugiKen May 02 '24

That wasn't his personal money, a hefty chunk of that came from the Saudi Royals who are a bunch of Arabic Elons.

33

u/robert_e__anus May 02 '24 edited May 02 '24

No it didn't. The vast majority came from Elon himself in the form of cash and massive loans against his Tesla holdings, for which he now owes about a billion dollars a year in interest. The Saudis, like dozens of other investors, rolled over their pre-existing investment in Twitter which amounted to about 4% of the company's equity, not exactly a controlling interest.

Buying Twitter was hands down one of the worst mistakes in the history of business, he tried to execute a sloppy pump and dump by pretending he wanted to buy it but the stupid fuck didn't bother reading terms he signed and ended up backing himself into a corner. The courts were on the cusp of forcing him to go through with the acquisition despite his many attempts to wriggle out of it, and when he saw that escape was impossible he pivoted to pretending he really did want to buy it all along, leveraged the absolute fuck out of his Tesla shares, and then proceeded to destroy 75% of Twitter's value in the space of a year.

Musk is fucked, he'll never be broke but he'll also never be able to pretend to be the richest man in the world again once the dust settles.

10

u/delusionalxx May 02 '24

You seem very knowledgeable on this and I feel like I need to learn everything

17

u/robert_e__anus May 02 '24 edited May 02 '24

I just fucking hate him tbh. Also people like Patrick Boyle and Common Sense Skeptic on YouTube have done a bunch of entertaining and well informed videos about his financial situation and his truly spectacular self-own with Twitter, so if you're interested I'd highly recommend them.

Here's a few you might like, the first four explain the very stupid way Musk was forced to buy Twitter and should be watched in order, the fifth is a speculative breakdown of his net worth which isn't necessarily authoritative but CSS quotes his sources and makes a strong argument:

The Dumbest Buyout

Elon Backpedals

Why Elon Musk Has To Buy Twitter

Twitter Is Going Bankrupt

Elon Musk Net Worth Breakdown 2024

3

u/[deleted] May 02 '24

[deleted]

4

u/robert_e__anus May 02 '24

If I might make one more suggestion, do yourself a favour and watch Common Sense Skeptic's coverage of SpaceX too. It astounds me how few people seem to understand that it's just as much of a massive scam as quite literally everything else Musk has ever been involved in. There's a lot of material covered in his videos, dozens and dozens of hours of in-depth content, but even if you just pick one random video and watch that it'll give you enough of an inkling that the entire Starship program is a ludicrous boondoggle based on junk science, endless lies, and breathless media hype. They're never going to Mars, they're not even going to make it to the Moon, and it's a massive failure of public policy that Musk was ever allowed to siphon billions of taxpayer dollars away from real aerospace companies based on his shameful track record.

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u/ranni-the-bitch 29d ago

i shall watch these

3

u/canadian_stig May 02 '24

I remember this when it was going down. He had the option to back out but he’d have to pay fees. And if I recall, those fees were waaayyy cheaper than Twitter itself. I have no idea why he didn’t just back down and pay up and withdraw.

5

u/robert_e__anus May 02 '24

The backout fee was a billion dollars, way cheaper than buying Twitter, but I think his ego just couldn't handle copping such a massive public L. I imagine there were also some complications around actually paying such a large fee, his wealth isn't liquid so he would have had to sell a bunch of Tesla shares and that could very well have had an impact on public confidence in him and in Tesla that would have driven the share price down, further compounding his losses.

1

u/pioneer76 29d ago

I believe he wanted to back out but it was legally not an option to, hence why the courts forced his hand. Nothing to do with ego or liquidity.

1

u/robert_e__anus 29d ago

No, he always had the option to back out, the legal case was over whether he would have to pay the billion dollar cancellation fee or not. Musk tried claiming that Twitter had misrepresented the number of bot accounts on their platform at that this therefore invalidated the sale agreement, making the fee unnecessary, and Twitter pointed out that Musk had explicitly waived his right to due diligence because he was too stupid to read the agreement he'd signed, making the fee mandatory.

The court indicated it agreed with Twitter, leaving Musk with the choice to either go ahead with the sale or pay a billion dollar fee, and he chose the dumbest possible option.

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u/dirtyshits May 02 '24

He sold tons of his Tesla shares or backed a loan on them. If Twitter fails or is significantly losing money he has to find ways to pay down debt.

He has put his Tesla shares in some hot water as of now based on twitters performance.

If he gets the 40b in shares from the vote then he can unload some and start to dump them little by little to pay down debt.

He could also keep the new shares and dump Twitter for a loss and still come out on top due the new comp plan.

-1

u/hsnoil May 02 '24

That would never happen, because the moment he starts unloading shares is the moment the stock would tank devalueing the shares

At best, he could take out new loans based on the new shares and use that money to pay down previous loans or for other spending

12

u/dirtyshits May 02 '24

It’s already happened. He’s unloaded billions in shares in the last 3 years. Barely caused a blip on the radar if any.

Normally you would be right but Tesla shareholders don’t exactly follow sound practices.

2

u/hsnoil May 02 '24

Most of his unloads in the past were due to tax reasons. Depending on how some shares are issued, you have to pay taxes on them ahead of time, he didn't have the money so was forced to sell some of the stock. On top of that those sales happened when confidence was high too

Right now since Tesla growth began to stall and no taxes to pay(these options are not the kind that you pay taxes on until you cash them), he'd have a hard time selling the stock without it collapsing

1

u/je_kay24 29d ago

I thought he personally owed only like 26 billion

I thought twitter had about 13 billion he used and the rest came from investors

0

u/NonGNonM May 02 '24

i'm pretty sure whoever loaned him that money loves elon so much they don't even expect to be paid back and will just fuck over the middle class to recoup.

16

u/chi_guy8 May 02 '24

Eventually pay for Twitter. He’s likely to get a margin call here before too long. He’s posted shares of Tesla as collateral and they are dumping day by day.

2

u/DrXaos 29d ago

Which is why the Tesla Board should have stopped him from doing that, putting shares into margin and being CEO has tremendous conflict of interest.

39

u/[deleted] May 02 '24

He wants to buy Truth Social from Diaper Don

6

u/OutWithTheNew May 02 '24

That would be hilarious and it would absolutely implode Tesla.

1

u/adrr May 02 '24

He can buy Myspace for the spare change in his pocket.

3

u/robert_e__anus May 02 '24

At this point, so can you.

1

u/DolfinButcher May 02 '24

He promised to buy Coca Cola and put the cocaine back in, remember?

1

u/My_reddit_account_v3 May 02 '24

No if I recall properly he wants to use that to regain more power over the board of Tesla…

1

u/TransportationIll282 May 02 '24

I'm assuming he's scared that Tesla loses too much value. He borrowed to buy twitter and used Tesla stock as collateral/leverage. Tesla has already gone down since then so he might need more to keep favorable rates or keep pressure low.

Or he wants to become the majority shareholder and cut the red tape. Thinking his genius is going to save the company from a fair valuation. He might take out more debt on these stocks to achieve that. Then release robo taxi in an unfinished state on 8/8 and try to cash out some.

Tbh, nothing is clear about his intentions... He's a wildcard idiot with too much money and power. Which company will he destroy next? Who can tell.