An economic recession would be a “good thing” for Elon Musk

An economic recession would be a "good thing" for Elon Musk

“It’s been raining money on fools for too long,” the billionaire scolded on Twitter, quickly forgetting that he was benefiting greatly from this magical money.

Elon Musk, never stingy on controversial little phrases, stood out on Friday for a new Twitter appearance as the recession clouds gather over the United States.

“Actually, it’s a good thing. It’s been raining money on fools for too long. There must be some bankruptcies,” the billionaire said.

“Also, all those things with Covid at home made people think they didn’t really need to work hard. Waking up will be hard!” warns.

The opinion of the head of Tesla and SpaceX is all the more controversial, as the entrepreneur has benefited greatly from the abundance of liquidity in recent years. Money, sometimes described by its opponents as “magical”, thanks to which Tesla’s title climbed to impressive heights on the stock market. It is the incredible award of the carmaker, which is more efficient than Toyota compared to very low vans, that made Muska the richest man in the world.

In 2009, the entrepreneur benefited from a $ 465 million loan thanks to an extensive federal recovery plan following the global financial crisis. A rain of money that kept Tesla afloat and financed the development of the Model S.

Cash long in the red

Tesla has also been able to take advantage of significant tax breaks to launch its electric vehicles. As he noted GuardianThe company also does not have most of its revenue from the sale of vehicles, but from the resale of carbon credits to its competitors. A way to remember that Tesla doesn’t necessarily have such a strong kidney is due to his Business model.

The company has not spared the cold in the markets in recent weeks, it has lost a third of its value since the beginning of the year, while Musk’s intentions on Twitter are still unclear.

Elon Musk also assured that “companies that, by their very nature, have negative cash flows (that is, destroyers of value) must disappear in order to stop consuming resources.” Again, Guardian recalls that Tesla was profitable only in 2020 and had previously raised billions of dollars in negative cash. Again, low interest rates and “magic money” have helped the company avoid falling.

As for its other large company, SpaceX, it depends on public procurement with NASA or the United States Department of Defense.

Thomas Le Roy BFM Business journalist

Source link

Leave a Comment

Your email address will not be published.