Elon Musk's Regret
According to Elon Musk, billionaire investor Warren Buffett should have invested in Tesla early on. Musk claims that Buffett could have purchased Tesla shares when the company was worth only 0.1% of its current value, or less than $7 billion.
A History of Compliments and Jabs
Musk and Buffett have had a history of trading compliments and jabs over the years. Despite their differences, Musk believes that Buffett missed a golden opportunity by not investing in Tesla.
Musk's Response to George Mack
Musk's comments came in response to George Mack, who had posted an analysis of a question that Buffett once posed to a college class. The question was, "If you could invest in a friend and get 10% of their income for life — who would you pick?"
The Missed Opportunity
Musk suggests that Buffett's company, Berkshire Hathaway, could have invested in Tesla when it was valued at less than $700 million. Given Tesla's current market capitalization of $682 billion, a 10% stake would be worth about $70 billion today, assuming no dilution.
Berkshire's Alternative Investment
In 2008, instead of investing in Tesla, Buffett and his team poured $232 million into Chinese EV maker BYD. This investment grew to over $7 billion by early 2021, with Berkshire cashing out over $1 billion in profits in recent months.
Buffett's Investment Philosophy
Even if Berkshire had not invested in BYD, it is unlikely that Buffett would have bet on Musk and Tesla. Buffett values predictability, profitability, and reliability, while Musk has openly admitted that Tesla was on the verge of bankruptcy during the financial crisis.
Mutual Acknowledgment
Despite their differences, both Musk and Buffett have acknowledged each other's strengths. Buffett has praised Musk for facing tough competition from industry giants like Ford and GM and for tackling challenging global issues. Musk, on the other hand, recognizes Buffett's exceptional investing skills and values the backing of such an influential investor.
While Buffett may have missed out on Tesla, Musk believes that the Berkshire chief's investment would have been welcomed. Musk has repeatedly emphasized Buffett's failure to bet on Tesla, indicating that he would have appreciated the support from such a renowned investor.
Source: Business Insider
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By: tmohamed@insider.com (Theron Mohamed)
Title: Elon Musk: Warren Buffett Missed Out on Investing in Tesla
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-elon-musk-warren-buffett-investing-ev-berkshire-valuation-2023-11
Published Date: Mon, 13 Nov 2023 11:28:56 +0000
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