Elon Musk Says He's Broke - Is Tesla At Risk?

If his divorce filing is to be believed, Elon Musk is broke. In recent weeks news surfaced that the near legendary entrepreneur and founder of Tesla Motors, the buzzworthy electric car company that plans a $178 million IPO, had, in his words, "run out of cash."

Musk certainly had a great deal of lucre to lose: he was one of a handful of PayPal founders who used their newfound cash to start companies like SpaceX, a commercial space company, which had a recent test launch that was attended by President Obama, and SolarCity, a solar panel financing venture.

But, as VentureBeat noted in May, Musk's pending divorce from novelist Justine Musk has shed some unflattering light on his finances. Living on $200,000 month cobbled together in loans from friends, Musk says he's not able to scrounge up a regular flow of cash.

At The New York Times, Andrew Ross Sorkin mulls over Musk's fiscal state and suggests that Tesla could be affected by his finances (Musk tells Sorkin he's put $35 million into Tesla). Here's Sorkin:

Mr. Musk's personal fortune is not just a matter of pride. A business is hanging in the balance. Tesla's loan from the Energy Department requires Mr. Musk to hold at least 65 percent of Tesla. If he cashed out early, that loan would technically go into default.

Sorkin notes that, in regulatory, filings Tesla has said that Musk's divorce won't hurt its bottom line and that Musk won't have to sell off his shares. As Tesla heads to its IPO, it's likely that Musk will continue to find someone to lend to him. After all, Justine Musk, acknowledging Elon's cash problems, still referred to him as a "billionaire." And Musk himself tells Sorkin, that he may be low on liquidity, but his "assets are huge."

Comments

[fortyfiveseventy]

03:03 AM on 06/24/2010

His wife is a writer. If you must marry, make sure she can stand on her own two feet. The fact that she feels entitled to his money is just amazing.

[Morgantheaxe]

05:15 PM on 06/23/2010

Hey whatya know. Another woman that created nothing wrecking everything. Gotta LOVE divorce in this country. We have the worlds most expensive prostitutes. We call em wives. They don't do anything a traditional wife used to, but hey when ya get divorced they get half plus 20-35% for child support and oh did I mention spousal support? If you get married in this day and age you are an IDIOT!!!

[fortyfiveseventy]

02:51 AM on 06/24/2010

That's pure genius! I love it. Faved and faned, BRO!

[swilli1020]

02:04 PM on 06/23/2010

One man's defintion of being broke is another man's definition of being rich. I'd say most of us could live nice on one month's payout to himself. Frankly we are all rich, but we also should include the value of freedom. I'd rather be poor and broke in the US than living in fear and looking over my shoulder in some f up country and be rich....

Hopefully his Tesla is better than the 80's hair band that shares the name.

[TheSupremeOne]

09:15 AM on 06/23/2010

sell something..

[bryanzth]

02:47 PM on 06/23/2010

OOooooo garage sale Tesla's!

How much you want for that? (a roadster)
--Um, US$50k

I'll give you a buck two-eighty.
--OK.

Me with slightly used Tesla Roadster for cheap money!

BZ.

[Morgantheaxe]

05:16 PM on 06/23/2010

He should of never married her in the first place.

[newunderground]

08:14 AM on 06/23/2010

Poor baby. Hard to live on 200k..... a month?

[JeffreyGold]

02:12 AM on 06/23/2010

Broke? Paper or plastic? WTF. Sell off assets. Another case of intellectual dishonesty. Journalists: please keep the lawyers honest; the definition is, "having completely run out of money." If you have assets, you still have money.

[sposton]

11:14 PM on 06/22/2010

Don't worry - he's got wealth even if he has a slight liquidity problem. And I am sure he has millions stashed away overseas.

[RaceCondition]

06:58 PM on 06/22/2010

This is why Tesla will only be the domain of over-rich playboys and why I flip Tesla drivers off every time I see one.

[Janine547]

05:21 PM on 06/22/2010

Now that's what I call going, "Green".

[econ1]

03:15 PM on 06/22/2010

Tesla may have issues, but not because Musk has no liquidity.

[Charles Ainsley]

03:00 PM on 06/22/2010

Yes Sir, now remember friends..Look out Marshall Lucky, its High Prices...

http://www.youtube.com/watch?v=UwH5KEbAipY

[lonbwoy]

01:56 PM on 06/22/2010

Living on $200,000 month??, oh the agony!!

[Blissable]

01:54 PM on 06/22/2010

Elon Musk is not the founder of Telsa Motors, It was founded in 2003 by Martin Eberhard and Marc Tarpenning. Musk was brought in as an investor in April 2004 and didn't become CEO until 2008 a year after the original founders were ousted from the company. Getting facts right is a basic journalistic skill all too absent these days.

[Charles Ainsley]

02:56 PM on 06/22/2010

Agreed, Musk stole the company from Martin and left him in the dust. Musk isn't broke either, he has huge assets which will pay off later, so people will still put money behind him. This is just a way to keep the divorce costs down. The problem today with people like him is pre-nups. They never sign them, and the woman these guys marry always know they get paid at the end before anyone else. Musk should have kept his wick dry instead of catting about.

[clearthinker16]

01:00 PM on 06/22/2010

So he was one of the founders of Payscum, as no pal of mine would treat me like a thief. I do not feel sorry for him, but his other investors I have some feelings for. If he cannot make due on 200k a month then something is wrong.

[Charles Ainsley]

02:57 PM on 06/22/2010

He made a fortune off selling Pay-n-get screwed. Broke my left arse..

[jabailo]

12:47 PM on 06/22/2010

And now he's pumping unworkable battery cars.

This guy is Madoff before he even takes your money!

[lightningbolt]

01:27 PM on 06/22/2010

The cars do work. They are amazing.

[abbienormal]

01:35 PM on 06/22/2010

Absolutely. I wish the man luck.

[Jo Kurrent]

05:56 PM on 06/22/2010

The Tesla Roadsters are quite real and work extremely well. I'd love to own one of them, because they're beautiful and extremely fun to drive. The main problem isn't the cost, it's the fact that currently there is only a single dealership in Southern California that sells and services them.

[RaceCondition]

07:00 PM on 06/22/2010

Teslas have dozens of different firmwares all requiring their own tech to be flown out if something happens. And you pay for the flight. It's not for anyone who wants to do anything but soothe their own ego.