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Insight Into How Elon Musk Funds His Business Ventures

Elon Musk does not follow the herd. Even though most executives do not use their private wealth to fund business ventures, Musk believes it is important to to show that he personally has skin in the game.

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More than almost any other entrepreneur, Elon Musk finances his three primary business ventures — Tesla Motors, SolarCity, and SpaceX — by leveraging his own personal assets. The Wall Street Journal (WSJ) says those three companies are valued at close to $50 billion, largely because of Musk’s “voracious appetite for risk and unyielding optimism.”

A study in February by ISS QuickScore found that just 13% of executives or directors at the 3,000 largest companies have pledged shares they own in those companies as collateral for personal loans.

Of the $105 million in bonds sold by SolarCity since October, 2014, SpaceX has purchased $90 million. Musk has taken out $475 million in personal loans at various times to help out one or another of his business interests when they needed cash injections. Those loans are secured by $2.5 billion worth of shares he owns in Tesla Motors and SolarCity, based on market values from this week.

WSJ says few top executives use their personal funds to support their business ventures because it can place them in conflict with other shareholders. It could also subject them to a margin call that could disrupt normal trading in company shares. “As an analyst, it is often a red flag for me when companies and management direct loans between entities they have personal or financial interests in,” says Nathan Weiss, founder and senior analyst at independent research firm Unit Economics LLC in East Greenwich, RI.

“There are a few cases where one company was doing considerably better than another and I borrowed money,” Musk  says via WSJ. “If I ask investors to put money in, then I feel morally I should put money in as well […] I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl.” In other words, he thinks it’s important for others to see that he has skin in the game.

Musk says the odds of him not being able to handle a margin call are “almost zero.” That’s because his exposure is less than 5% of his total worth. He says he has “made it clear to shareholders that I subscribe to the notion that the captain is the last person off the ship.”

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Venture capitalist Steve Jurvetson, a major early investor in all of Musk’s companies, says he is not concerned that Musk has pledged his own shares. As long as the total is less than 5% of Musk’s total net worth, “you don’t have much to talk about.” Jurvetson raves about Musk, saying “his passion is breathtaking.”

Republicans in Congress are less in awe of Elon, however. Now that SpaceX has signed contracts worth billions of dollars with NASA, they are proposing legislation that would prohibit Musk from using his stake in SpaceX as collateral for other loans, particularly to SolarCity. The solar power company has recently had a loud and contentious spat with the Nevada Public Utilities Commission, which voted to impose a monthly fee on all rooftop solar installations in the state.

In response, SolarCity has shuttered his operations in Nevada and laid off hundreds of employees. How that plays out as the Gigafactory comes online should be interesting, since the same utility company (owned by Warren Buffett) that imposed its will on the Nevada PUC will also be the energy supplier to that gigantic manufacturing process. Tesla intends to sell excess power back to the utility, a process that started the whole controversy in Nevada in the first place.

Representative Douglas Lamborn, Republican from Colorado, says the proposed legislation is intended to send a message to Musk that his moves are being watched and monitored. A SpaceX spokesman retorts that SpaceX’s “cash balances are not government money’.”

Elon keeps his political leanings well out of public view. But it is clear his propensity for disrupting the established order has made a few enemies along the way.

Source: The Wall Street Journal
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Elon Musk

SpaceX turned a heralding moment for Starship into its greatest

Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.

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SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.

The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.

Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.

That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.

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The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.

SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.

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Elon Musk

SpaceX just got the green light Starship has waited years for

The FAA has cleared Starship Flight 14, setting up SpaceX’s first orbital attempt on Monday.

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SpaceX has cleared the last regulatory hurdle standing between Starship and its first trip to orbit. The Federal Aviation Administration issued the launch license for Starship Flight 14 late Saturday, keeping the mission on track for liftoff Monday, September 28, from Pad 2 at Starbase, Texas.

The 75 minute launch window opens at 7:15 a.m. Central, and Boca Chica Beach closures are also scheduled for September 29 and 30 as backup dates. This will be Starship’s first revenue generating mission.

The license was the missing piece after SpaceX completed a full wet dress rehearsal with Booster 21 and Ship 41 on September 24. At the time, the company said the flight remained on track pending regulatory approval. Because Flight 14 flies an orbital profile, the FAA had to sign off on a modified license that met its safety, payload and financial responsibility requirements.

Observers combing through the new FAA paperwork also noticed that lightning no longer appears among Starship’s listed launch hazards. If that holds, it matters more for where Starship is headed than for Monday’s attempt. Florida and Louisiana, home to LC-39A and the planned Starbase Louisiana site, see some of the most frequent lightning in the United States.

SpaceX tells the FCC that Starship Flight 14 is going to orbit

Flight 14 is the mission SpaceX has been building toward for months. Ship 41 will carry 26 Starlink V3 satellites, the first operational V3 units to be deployed, and attempt roughly six orbits at about 275 kilometers over a flight lasting just under 10 hours. SpaceX says the ship will only perform its orbital insertion burn after flight controllers confirm enough hardware redundancy remains for the deorbit burn at the end of the mission. Ship 41 is targeting a splashdown in the Pacific west of Chile, while Super Heavy will return to the Gulf of Mexico.

The date carries some symbolism as well. A Monday launch would come 10 years and one day after Elon Musk first presented the Interplanetary Transport System, the design that became Starship, at the International Astronautical Congress in Guadalajara, Mexico.

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SpaceX has not announced what comes next, but air traffic planning slides reported this week, list Flight 15 no earlier than October 19 and a first Starship launch from LC-39A in Florida no earlier than October 30. Both dates depend on how Monday goes.

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Investor's Corner

Tesla Optimus Gen 3 shows off a cleaner, factory-ready design in new app discovery

Renders hidden inside Tesla’s Android app show Optimus Gen 3’s design before any official reveal.

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Tesla Optimus Gen 3 [Credit: Tesla]

Tesla may have accidentally given a first look at its newest Optimus Gen 3 humanoid robot when photos were found in the Tesla smartphone app.

Design files tucked inside a recent Android version of the Tesla app appear to show the third generation humanoid robot next to the older Gen 2.5 prototype. The assets were extracted from the app package by Tesla community member @wholemars, who posted the renders on X late Tuesday night before deleting them. The Tesla Newswire reshared the side by side comparison on Wednesday, and the images have circulated widely since.

Tesla Optimus Gen 2.5 vs Gen 3 comparison via @WholeMars on X

Tesla Optimus Gen 2.5 vs Gen 3 comparison via @WholeMars on X

The files are labeled “gen3” and were built as models for Tesla app’s own interface, as validated directly by Grok to be official.

The comparison shows a robot that looks built for a factory line rather than a lab bench. Gen 2.5’s exposed mechanical linkages and gold plating on the knees and shins are gone. In their place, Gen 3 uses matte black fairings on the lower legs, paired with a more contoured champagne gold body. Flexible covers now seal the joint where the torso meets the upper thighs, keeping bearings and moving parts sealed from debris and unnecessary contact.

The body panels fit more tightly, and the hands, which Tesla has said carry 22 degrees of freedom, look far more refined than those on earlier units.

This most recent leak fills a gap Tesla has left open for most of the year. Elon Musk said on March 31 that Optimus 3 was walking around but needed “some finishing touches” before it could be shown, a delay Teslarati covered when Tesla missed its first quarter reveal target. Musk later said Tesla would hold the design back until closer to production, partly to keep competitors from copying it. No reveal date has been announced.

The app itself has been preparing for Optimus for months. In July, code in the Tesla app pointed to a dedicated robot phone key, a consent screen for collecting video and spatial data while Optimus works inside a home, and an alert system for low battery and mechanical faults. Finished 3D models of Gen 3 suggest the interface owners will eventually use is moving past placeholder code toward something Tesla intends to ship.

Manufacturing is moving in parallel. Tesla tore out the original Model S and Model X lines at Fremont this summer to make room for Optimus production, with a planned capacity of one million robots a year. At Giga Texas, the steel frame of a dedicated Optimus factory is nearing completion ahead of a targeted 2027 start, with Musk pointing to an eventual output of 10 million units annually.

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