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.
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."