An investment is referred to as an asset the one acquired to get returns. Investment may involve capital, asset, commodities with the hope of generating high profits later in the future.
Before going further, there is no way we will discuss investment without touching the issue of finance.
Finance is the process of acquiring funds and managing money and other assets. It is connected with investment, banking, money and capital markets. Time value of money is one of the most fundamental theories of finance basics and it states that a dollar today is worth more than a dollar in the future.
There are lots of investment opportunities out there for those who are ready to take the risk and know what they want. Maybe you are looking for short term or long term investments, you can easily invest in bonds, stocks or real estate. When you invest in stocks, you are investing in some residual claim to the future profit of a company. Many companies need investors so they can raise the needed capital to grow. And this is where the question lies, How Did Elon Musk Finance Tesla?
For those that are wondering how Tesla got all their funding. Let’s consider the following major shareholders in Tesla and the percentage of their shares as of 2020.
Guillen joined Tesla in 2010 and has worked and headed various companies before that. He also owns 0.01% of the company’s total shares which will amount to 49,357 Tesla shares.
Zachary Kirkhorn joined Tesla in the year 2010. He has played various roles from being the vice president of finance in the company to becoming the chief finance officer of Tesla in 2009. Kirkhorn owns 0.01% of Tesla total shares, which will amount to a total of 55,624 Tesla shares.
He owns 0.07% of the company’s total shares and that will amount to a total of 629,740 Tesla shares. Kimbal Musk is the younger brother of Elon Musk. He is an entrepreneur and has an investment in various companies and restaurants.
Capital World Investors
They have 5.6% of Tesla total outstanding shares and that is 52.2 million Tesla shares.
They offer institutional brokerage services and is a branch of Susquehanna International Group. They own 6.5% of outstanding total shares which is 60.7 million Tesla shares.
Musk has 20.7% outstanding total shares and that will be 193.3 million Tesla shares. Elon Musk is a successful entrepreneur, co-founder and presently the Chief Executive Officer(CEO) of Tesla. But before becoming the CEO of Tesla, he had invested in other profitable companies like SpaceX, Paypal Holdings and The Boring Company which was later founded. A deeper look at some of his investments might give you a better understanding.
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Musk founded Zip2 with his brother in 1995 and later on Mohr Davidow invested $3 million into the company and the company was doing very well. But in 1999 Compaq bought Zip2 for a sum of $307 million, a deal which gives Musk profits of $22 million. That same year Musk invested part of his profit to found X.com and later in early 2000 merged with one of his major competitors Peter Thiel. The merging of X.com with Peter Thiel’s Confinity platform is what gave birth to Paypal and was later sold for $1.5 billion to eBay.
Musk founded Space Exploration Technologies Corporation which is mostly known as SpaceX the same year Paypal was sold. And in terms of technology and finance, SpaceX has been a great success. Musk became part of Tesla through an investment of $6.35 million and that didn’t stop him from still investing in SpaceX.
Tesla, Inc., was formerly known as Tesla Motors and was founded by Martin Eberhard and Marc Tarpenning in the year 2003. The company was funded through different sources and one of them is Elon Musk who also became the chairman of Tesla in 2004. The company launched its first electric car in 2008 called Roadster and the result was quite impressive.
On a single charge, the Roadster could cover a distance of 394km(245 miles). Musk became the CEO of Tesla the same year it was announced that Eberhard left the company, even though he was still one of the shareholders. Tesla has become one of the world’s largest producers of electric automobiles. Tesla later ventured into solar energy when they bought SolarCity in 2016.
We can see from the life of Elon Musk that, to be a successful investor you need to take the risk. And also diversify your investment. Thinking of short term or long term investments? Then, you are ready to put your finance into your hands and build wealth overtime