Elon Musk, PayPal Pioneer, Is Paper-Rich, Cash-Poor(nytimes.com)
nytimes.com
Elon Musk, PayPal Pioneer, Is Paper-Rich, Cash-Poor
http://www.nytimes.com/2010/06/22/business/22sorkin.html
8 comments
Car copmanies haven't been good investments? Seriously? I mean, sure, if you're talking about the last 10 or 20 years, I can dig that. But if you're talking about from inception, you're wrong. Look at Ford:
http://www.google.com/finance?chdnp=0&chdd=1&chds=1&...
Not only has there been very nice asset appreciation but look at all those dividends. Huge dividends for a very, very long time.
http://www.google.com/finance?chdnp=0&chdd=1&chds=1&...
Not only has there been very nice asset appreciation but look at all those dividends. Huge dividends for a very, very long time.
I think he's arguing that Ford is an outlier. Remember, when the car was invented, there were hundreds of car companies (remember the Stanley Steamer?)
If you went back to 1920, and compared the car companies from then and now, Ford might be the only one that has still remained. Even classic nameplates like Oldsmobile, Pontiac, and Buick have fallen off.
If you went back to the 1960's, and told someone that Oldsmobile and Pontiac would cease to exist in 50 years, they would have called you crazy.
Is this going to happen to the electric car as well? Will Tesla be the next Ford or the next Stanley?
*The same trend can also be seen with PC manufacturers. How many different PC companies were there in the 1980's. How many exist now?
If you went back to 1920, and compared the car companies from then and now, Ford might be the only one that has still remained. Even classic nameplates like Oldsmobile, Pontiac, and Buick have fallen off.
If you went back to the 1960's, and told someone that Oldsmobile and Pontiac would cease to exist in 50 years, they would have called you crazy.
Is this going to happen to the electric car as well? Will Tesla be the next Ford or the next Stanley?
*The same trend can also be seen with PC manufacturers. How many different PC companies were there in the 1980's. How many exist now?
"It is pretty aggravating," he told me, referring to the rumors floating around about him...
Yet the article does little more than add to the sensational bonfire. He values his investments, so he's prioritized them. It seems like his friends see him as an investment - a good one in my opinion, and have chosen to help him out. With the IPO coming he'll be able to get square and that still leaves him in a fantastic position.
He made the choice to be cash-poor and it seems he did so not out of ignorance but with an understanding that he had income sources(friends, businesses, etc) that would help him get through any dry spell. The divorce certainly doesn't help, but this seems pretty logical for an entrepreneur.
Yet the article does little more than add to the sensational bonfire. He values his investments, so he's prioritized them. It seems like his friends see him as an investment - a good one in my opinion, and have chosen to help him out. With the IPO coming he'll be able to get square and that still leaves him in a fantastic position.
He made the choice to be cash-poor and it seems he did so not out of ignorance but with an understanding that he had income sources(friends, businesses, etc) that would help him get through any dry spell. The divorce certainly doesn't help, but this seems pretty logical for an entrepreneur.
monthly expenses of 200k? Wow, that is quite a lavish lifestyle. Just wondering what costs so much... that is more than 6k per day.
This is clearly a man who doesn't do anything at ordinary scale. He eats bigger than we do, travels bigger than we do, and starts companies bigger than we do.
Hard to believe he consumes twice in a month what my wife and I do in a year.
Hard to believe that you and your wife consume in a year what I would consume in 7 years if I stuck to my current standard of living :)
Hard to believe that you consume ~14 times what an average Kenyan consumes in a year.
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cocaine is expensive
although since he is going through a divorce(I think), it's probably lawyer fees
although since he is going through a divorce(I think), it's probably lawyer fees
> cocaine is expensive
Is this a joke? Because that's not an accusation to make lightly, IMHO.
Is this a joke? Because that's not an accusation to make lightly, IMHO.
I think it's a silly/unnecessary joke also.
But overreacting to it is even worse. What if this guy's career or at least his public perception gets derailed by a dirt-seeking public in some stupid scandal. What a tragic, horrible loss that would be to the rest of us.
This man needs to be given a clear road ahead to keep innovating. We need more of people like him, people who not only have lofty, humane goals but have the will to make them a reality.
If this guy wants to swim in pools of LSD on the weekends who cares? It's no one's business but his own.
What about Feynman and pot? My Mom has never smoked pot, she didn't come up with quantum electrodynamics either.
But overreacting to it is even worse. What if this guy's career or at least his public perception gets derailed by a dirt-seeking public in some stupid scandal. What a tragic, horrible loss that would be to the rest of us.
This man needs to be given a clear road ahead to keep innovating. We need more of people like him, people who not only have lofty, humane goals but have the will to make them a reality.
If this guy wants to swim in pools of LSD on the weekends who cares? It's no one's business but his own.
What about Feynman and pot? My Mom has never smoked pot, she didn't come up with quantum electrodynamics either.
Who's overreacting? I think my reaction was very proportional.
Humor doesn't always translate well to text, so I simply wanted a clarification. It's bad manner to accuse someone of being a coke-head in public without any clear indication that it's a joke, whoever that person is (you, me, Elon Musk).
We can think all we want that nobody should care, but we have to live with the world as it is (until we can change it, anyway), and there are many evo. psych. reasons why people care about that kind of stuff.
Humor doesn't always translate well to text, so I simply wanted a clarification. It's bad manner to accuse someone of being a coke-head in public without any clear indication that it's a joke, whoever that person is (you, me, Elon Musk).
We can think all we want that nobody should care, but we have to live with the world as it is (until we can change it, anyway), and there are many evo. psych. reasons why people care about that kind of stuff.
Well I did understand that he was making a joke, but I'd rather we kept jokes like that away from HackerNews as long as we possibly can, until we turn into yet another Reddit or Digg.
That's exactly what I'm saying but I'm getting down-voted. Not sure what is happening here.
duuuh
It's pretty shocking to see two amateurish blog posts about divorce proceedings make it to the nytimes. That's gotta suck.
Can anyone comment on the divorce situation? The seemingly huge requests by soon-to-be ex-wife? I mean, CA community property and all, but nonetheless, any insights/opinions? (for those of us not up on the gossip)
FWIW, I'd try to avoid demonizing the ex-wife in this scenario (not that you are). I've followed her blog off and on during the proceedings, and honestly, her demands don't seem terribly unreasonable:
"The irony of this whole thing is that I don't want hundreds of millions of dollars. I think my ex-husband is brilliant and works like a demon and deserves his success and his wealth. But I also think -- after eight years of marriage and six kids (five surviving) -- that I am entitled to a fair settlement..." http://moschus.livejournal.com/140502.html
She's probably asking for somewhere between 5 and 10% of their combined assets, near as I can tell. I think the bigger issue in the divorce is one of pride, in that Elon doesn't want to give up any shares in the companies he's built... it's more than just money to him.
/back to work
"The irony of this whole thing is that I don't want hundreds of millions of dollars. I think my ex-husband is brilliant and works like a demon and deserves his success and his wealth. But I also think -- after eight years of marriage and six kids (five surviving) -- that I am entitled to a fair settlement..." http://moschus.livejournal.com/140502.html
She's probably asking for somewhere between 5 and 10% of their combined assets, near as I can tell. I think the bigger issue in the divorce is one of pride, in that Elon doesn't want to give up any shares in the companies he's built... it's more than just money to him.
/back to work
The thing is, 5-10% of their shared assets works out to over a hundred million dollars [1] if you include the slices of his companies that she's asking for. So while she couches her request in reasonable language she's actually asking for (IMHO) an unreasonable amount of wealth given she didn't create it in the first place.
[1] Which is over forty times the lifetime earnings of the average American simply for marrying well.
[1] Which is over forty times the lifetime earnings of the average American simply for marrying well.
It's questionable whether she had no role in creating the money he made while they were married; marriage is usually a bit of a partnership, with a lot of mutual support. You can allege that he would've been just as successful if he hadn't been married during that period, but that's a hard counterfactual to prove, and depends essentially on arguing that his marriage, having kids, etc. provided no support at all that in any way contributed to his success during that period. And if you're going to indulge in those kinds of counterfactuals, then maybe he doesn't deserve his money either, because hey, maybe if he wasn't at PayPal, someone else would've done just a good a job, so he only got his money by essentially having the luck to be "married" to PayPal?
That's one reason that legally, money made while married is assumed to be evenly split, absent a separate agreement. I don't have any particular insight into his situation, but if, say, my parents had gotten divorced when I was a kid, I would've considered it fair if they split the money evenly, even though my dad officially made all of it.
Plus, if you put it the other way, he's keeping 90-95% of their shared wealth, over a billion dollars, and yet is unhappy with that, because he wants more? It doesn't sound like it has anything to do with control over his companies, either; the amount of stock she's asking for wouldn't affect controlling stakes at all. Seems like it's purely the money: either it's just greed (he has a ton, but wants even more), or some variety of spite (he doesn't care about the money, but doesn't want his ex-wife to get it).
That's one reason that legally, money made while married is assumed to be evenly split, absent a separate agreement. I don't have any particular insight into his situation, but if, say, my parents had gotten divorced when I was a kid, I would've considered it fair if they split the money evenly, even though my dad officially made all of it.
Plus, if you put it the other way, he's keeping 90-95% of their shared wealth, over a billion dollars, and yet is unhappy with that, because he wants more? It doesn't sound like it has anything to do with control over his companies, either; the amount of stock she's asking for wouldn't affect controlling stakes at all. Seems like it's purely the money: either it's just greed (he has a ton, but wants even more), or some variety of spite (he doesn't care about the money, but doesn't want his ex-wife to get it).
It's questionable whether she had no role in creating the money he made while they were married; marriage is usually a bit of a partnership, with a lot of mutual support. You can allege that he would've been just as successful if he hadn't been married during that period, but that's a hard counterfactual to prove, and depends essentially on arguing that his marriage, having kids, etc. provided no support at all that in any way contributed to his success during that period. And if you're going to indulge in those kinds of counterfactuals, then maybe he doesn't deserve his money either, because hey, maybe if he wasn't at PayPal, someone else would've done just a good a job, so he only got his money by essentially having the luck to be "married" to PayPal?
You might be able to make that argument if he hadn't already founded a company and sold it for over $300M before he married her. Paypal itself had already been founded and was well under way before they married. It's disingenuous at best to ascribe any of his success to her.
That's one reason that legally, money made while married is assumed to be evenly split, absent a separate agreement. I don't have any particular insight into his situation, but if, say, my parents had gotten divorced when I was a kid, I would've considered it fair if they split the money evenly, even though my dad officially made all of it.
That is a holdover from when women didn't work, which is why it makes sense with respect to your parents.
Plus, if you put it the other way, he's keeping 90-95% of their shared wealth, over a billion dollars, and yet is unhappy with that, because he wants more? It doesn't sound like it has anything to do with control over his companies, either; the amount of stock she's asking for wouldn't affect controlling stakes at all. Seems like it's purely the money: either it's just greed (he has a ton, but wants even more), or some variety of spite (he doesn't care about the money, but doesn't want his ex-wife to get it).
He's the one that worked for the money. What was her contribution, sex and moral support? That's the most expensive hooker in history. Seems that the best bet for successful men is to refuse to marry. Even if the wife signs a pre-nup, they can still keep the man in court for years to force a settlement.
The real issue here is the duplicity of the womens lib movement. It's fair, equal, and all that jazz until it hurts women financially. Some time ago, a girl asked me to go to dinner with her, and while we were there, she spent a great deal of time telling me all about her political views, especially about women's rights. Of course, when the bill comes, she pushes it over to me. We're equal, women deserve everything the same as men, etc., until the bill comes, then it's "you should buy me dinner because I'm a pretty girl and you're supposed to." I'd have bought dinner anyway, but don't lecture me if it's all just bullshit. Same situation here.
You might be able to make that argument if he hadn't already founded a company and sold it for over $300M before he married her. Paypal itself had already been founded and was well under way before they married. It's disingenuous at best to ascribe any of his success to her.
That's one reason that legally, money made while married is assumed to be evenly split, absent a separate agreement. I don't have any particular insight into his situation, but if, say, my parents had gotten divorced when I was a kid, I would've considered it fair if they split the money evenly, even though my dad officially made all of it.
That is a holdover from when women didn't work, which is why it makes sense with respect to your parents.
Plus, if you put it the other way, he's keeping 90-95% of their shared wealth, over a billion dollars, and yet is unhappy with that, because he wants more? It doesn't sound like it has anything to do with control over his companies, either; the amount of stock she's asking for wouldn't affect controlling stakes at all. Seems like it's purely the money: either it's just greed (he has a ton, but wants even more), or some variety of spite (he doesn't care about the money, but doesn't want his ex-wife to get it).
He's the one that worked for the money. What was her contribution, sex and moral support? That's the most expensive hooker in history. Seems that the best bet for successful men is to refuse to marry. Even if the wife signs a pre-nup, they can still keep the man in court for years to force a settlement.
The real issue here is the duplicity of the womens lib movement. It's fair, equal, and all that jazz until it hurts women financially. Some time ago, a girl asked me to go to dinner with her, and while we were there, she spent a great deal of time telling me all about her political views, especially about women's rights. Of course, when the bill comes, she pushes it over to me. We're equal, women deserve everything the same as men, etc., until the bill comes, then it's "you should buy me dinner because I'm a pretty girl and you're supposed to." I'd have bought dinner anyway, but don't lecture me if it's all just bullshit. Same situation here.
So you're arguing that, even though he signed a contract (yes, marriage is a legal contract, and you shouldn't sign it if you don't agree with the terms), he should be able to back out of it, because of some general dislike for "the womens lib movement"? If he wanted to sign a different contract, he could've asked for a prenuptial agreement (which is common among the wealthy), or not gotten married. But he didn't; he signed the contract, so now he should honor it according to the terms he agreed to, and any attempt to weasel out of them is duplicitous bullshit. Should PayPal be able to back out of its contract with him post-IPO, and decide that it didn't want to give him that much money after all, because he didn't "deserve" it?
And yes, I do think moral support plus raising five of your children is sufficient support to deserve half the money you made in that period. If he thought otherwise, he shouldn't have signed a contract saying so. Since he did, the only honorable thing to do is to honor his obligations, not the current pathetic show he's making of trying to claw his way out of them after the fact.
And yes, I do think moral support plus raising five of your children is sufficient support to deserve half the money you made in that period. If he thought otherwise, he shouldn't have signed a contract saying so. Since he did, the only honorable thing to do is to honor his obligations, not the current pathetic show he's making of trying to claw his way out of them after the fact.
Well that's similar to the argument she's making; she signed a postnuptial agreement and is now trying to weasel out of it.
What was her contribution, sex and moral support?
She is the mother of his five children.
She is the mother of his five children.
No one is disputing that their five children should be looked after and supported. However, money for this should be allocated on the basis of their need rather than Elon Musk's ability to pay, and I'm not sure how one could spend more than a couple of million per child.
In fact, beyond a certain point I'd suggest that having lots of money is probably a negative influence in a child's life.
In fact, beyond a certain point I'd suggest that having lots of money is probably a negative influence in a child's life.
Conceiving and caring for five kids has a pretty huge opportunity cost. In addition, her staying home and taking care of the kids meant that he had more time to dedicate to earning money. The conventional wisdom of divorce proceedings is that a mother should be compensated for both that opportunity cost and get a cut for helping her husband free up time to dedicate to work, as well as the actual maintenance costs of raising the kids.
I pointed out that she was the mother of his kids because the the previous poster called her a whore.
"It's fair, equal, and all that jazz until it hurts women financially."
Most people have no ideology. Instead, they have a "retirement plan", so to speak. People oppose taxes when they're wealthy, they are for social welfare when they're poor, they oppose government intervention when that means their looting will cease to be profitable, they are for government intervention when they need a bailout. "Liberal" women are all for immigration when the ones losing jobs are male engineers, but they strongly oppose immigration when the immigrants are superior specimens of the female gender from the former Soviet block (they know they can't compete in the dating market with foreign "talent").
If your friend asked you to go have dinner with her, she has to pay at least 50%. Her parasitic behavior only shows that she has no respect for you whatsoever. If you have some self-respect, I hope you mind-fucked her until she felt guilty for pushing the bill to you. Bonus points if you made her cry in public.
Most people have no ideology. Instead, they have a "retirement plan", so to speak. People oppose taxes when they're wealthy, they are for social welfare when they're poor, they oppose government intervention when that means their looting will cease to be profitable, they are for government intervention when they need a bailout. "Liberal" women are all for immigration when the ones losing jobs are male engineers, but they strongly oppose immigration when the immigrants are superior specimens of the female gender from the former Soviet block (they know they can't compete in the dating market with foreign "talent").
If your friend asked you to go have dinner with her, she has to pay at least 50%. Her parasitic behavior only shows that she has no respect for you whatsoever. If you have some self-respect, I hope you mind-fucked her until she felt guilty for pushing the bill to you. Bonus points if you made her cry in public.
> an unreasonable amount of wealth given she didn't create it in the first place
Western society at large believes that domestic life plays a very significant role in the process of creating wealth which is why most jurisdictions award an equal split of property at the time of divorce.
In this particular case they have five sons together and it seems like they met before most of Mr. Musk's ventures were started. There is a lot more effort to a decade or more of supporting a fledging entrepreneur and raising five sons than just marrying well.
Western society at large believes that domestic life plays a very significant role in the process of creating wealth which is why most jurisdictions award an equal split of property at the time of divorce.
In this particular case they have five sons together and it seems like they met before most of Mr. Musk's ventures were started. There is a lot more effort to a decade or more of supporting a fledging entrepreneur and raising five sons than just marrying well.
Man this is such an ugly situation to otherwise successful and (seemingly) nice people. Almost scares you to never get married or have children. Actually not only this case, whenever I see high profile divorce cases, I get baffled at divorced couple fighting over millions of dollars, when they are already millions of dollars rich and will maintain a comfortable life for the rest of their life with their current wealth.
I guess I make the assumption that rich people are rational, or maybe they are rich because they are not (always) rational when it comes to money?
I like to think that Elon Musk is not in it for the money, and it seems like so from his actions. He seem to take money from one success story so that he can invest in his dream goals of making the world a better place. Money is just a by product of his actions.
On the other hand, reading some of his wife blog post gives me the impression that she seems like an OK person and not generally spiteful or vindictive.
Utterly confused and scared of getting married.
I guess I make the assumption that rich people are rational, or maybe they are rich because they are not (always) rational when it comes to money?
I like to think that Elon Musk is not in it for the money, and it seems like so from his actions. He seem to take money from one success story so that he can invest in his dream goals of making the world a better place. Money is just a by product of his actions.
On the other hand, reading some of his wife blog post gives me the impression that she seems like an OK person and not generally spiteful or vindictive.
Utterly confused and scared of getting married.
There's no point in being scared to get married. Being married is awesome. Some people divorce, and some people don't. If you're that worried about the money part of it, sign a pre-nup, even if you don't have anything.
You can't control people. You can't even control your spouse. That's just how things are, and you have to let them go. You can't go on scared of doing things; anything could happen at any time, but we can't close ourselves off from it.
None of us know the personal details of their relationship. Maybe one side or the other has some good cause for this. Maybe it's mutual and there's just some dispute about the split of assets; that can happen, disputes are pretty normal, and when you have tons of money and are paying for super-high-priced lawyers, things can definitely drag out.
Don't be scared by this stuff. Just do your best and keep on living. That's all the control anyone gets in this life.
You can't control people. You can't even control your spouse. That's just how things are, and you have to let them go. You can't go on scared of doing things; anything could happen at any time, but we can't close ourselves off from it.
None of us know the personal details of their relationship. Maybe one side or the other has some good cause for this. Maybe it's mutual and there's just some dispute about the split of assets; that can happen, disputes are pretty normal, and when you have tons of money and are paying for super-high-priced lawyers, things can definitely drag out.
Don't be scared by this stuff. Just do your best and keep on living. That's all the control anyone gets in this life.
"If you're that worried about the money part of it, sign a pre-nup, even if you don't have anything."
That's exactly what Elon Musk tried. Of course, after the pre-nup you have to sign a post-nup confirming the pre-nup, and that's how this whole mess started.
That's exactly what Elon Musk tried. Of course, after the pre-nup you have to sign a post-nup confirming the pre-nup, and that's how this whole mess started.
You are absolutely right. I didn't word my feelings very well. I am not so much scared of the money part or the responsibility of a marriage; I am put off by the ugly nature of the divorce - fighting over money with someone with whom you have spent a good part of your life and will still have to keep some sort of relationship going after divorce because you have children together.
I would understand if one party seems to be unfairly screwing over the other person and not giving them enough money. They are both independently wealthy and have very successful career.
Anyways, I am sure I have much to learn about human relationship and marriage life. It just seems very sad and the only people who are benefitting from this ugly situation are the lawyers, who are going to milk this case for as long as they can for as much as they can.
I would understand if one party seems to be unfairly screwing over the other person and not giving them enough money. They are both independently wealthy and have very successful career.
Anyways, I am sure I have much to learn about human relationship and marriage life. It just seems very sad and the only people who are benefitting from this ugly situation are the lawyers, who are going to milk this case for as long as they can for as much as they can.
> Utterly confused and scared of getting married.
Did you see this post? http://moschus.livejournal.com/141570.html
As we discussed around here (http://news.ycombinator.com/item?id=1405512) her blogging seems to stink of narcissism and entitlement.
As we discussed around here (http://news.ycombinator.com/item?id=1405512) her blogging seems to stink of narcissism and entitlement.
The guy ran off on his wife with a 24-year-old actress. A wife who helped him raise 5 kids and who stood by him through thick and thin when he was building companies like PayPal and Tesla and SpaceX (they met in college). I don't have a lot of sympathy for someone who pulls something like that and doesn't expect to take a hit in the pocketbook for it.
You read too shallowly. Wikipedia says she met him in college, not that they married there. In point of fact, they married in 2000, sometime around March.
By 2000, Musk had already helped found and sell Zip2; Paypal had already been founded and in just 2 years would grow to the point Ebay would buy it for 1.5 billion; immediately on selling, 1/3rd of the way through the marriage, Musk founds SpaceX; halfway through the marriage, he founds Tesla and a bit after that SolarCity.
(I too have little sympathy, but rather for someone who married a millionaire, signing a prenup (which no one has demonstrated to be unfair or stingy), and now expects to break it when the stakes have gone way up.)
By 2000, Musk had already helped found and sell Zip2; Paypal had already been founded and in just 2 years would grow to the point Ebay would buy it for 1.5 billion; immediately on selling, 1/3rd of the way through the marriage, Musk founds SpaceX; halfway through the marriage, he founds Tesla and a bit after that SolarCity.
(I too have little sympathy, but rather for someone who married a millionaire, signing a prenup (which no one has demonstrated to be unfair or stingy), and now expects to break it when the stakes have gone way up.)
FWIW, it's extremely suspicious that he appears broke in the middle of a divorce - of all times. But he may be telling the truth, obviously I don't know his situation.
What I do know, is when I get married, it won't happen without a prenup. There's no WAY I'm going to jeopardize the work of my lifetime.
What I do know, is when I get married, it won't happen without a prenup. There's no WAY I'm going to jeopardize the work of my lifetime.
No issue here....just a divorce and business as usual for a millionaire!!! Next better ny article.....
I have never heard the term "PayPal Mafia" until this week (3 times). Is this new?
Well now, that page seems to have been created 6 months ago, so I'd argue it's pretty new.
If you read the page it says the term was first used in 2007.
Google it, you'll find news articles from 2006/2007. This NY Times piece is good. I especially like the diagram.
http://www.nytimes.com/2006/10/17/technology/17paypal.html
http://www.nytimes.com/2006/10/17/technology/17paypal.html
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Baader-Meinhof Phenomenon (a recency effect) I'd guess.
But SpaceX, with their $1.6B contract from NASA and options for $3.6B, their successful maiden flight two weeks ago of their Falcon 9 rocket - http://www.spacex.com/F9-001.php, their newly inked $492M contract with private satellite company Iridium http://www.spacex.com/press.php?page=20100616 ... and they are just getting started. This could/probably will lay mega-fortune to Musk.
I too would leverage myself to the moon to keep that equity.