Tesla Motor's Elon Musk Divorce Whoa's
Is all fair in love, war and electric cars? Maybe a little warfare is taking place in the divorce of Tesla Motors mogul Elon Musk. The Silicon Valley entrepreneur, venture capital golden boy and billionaire is broke. At least that is what the latest papers filed in his divorce proceedings with soon to be ex-wife, novelist Justine Musk, are reported to say.
According to Reuters, Musk claims to be out of cash. Somehow, one of the most successful businessmen in one of the most successful and competitive areas in the world, is living off loans from friends. Reports from many sources state that Musk has been living off those loans since October 2009 and "spending $200,000 a month while making far less." Does it seem a bit odd that an accomplished entrepreneur would so cavalierly live in a cash flow negative manner, possibly jeopardizing the future of his business?
The questions are indeed flying over whether or not the "brokeness" of Musk could possibly affect the future of Tesla, especially regarding its impending IPO. According to The New York Times, Tesla too is borrowing from friends to ease a cash shortage. Toyota has agreed to buy $50 million in shares at the time of Tesla's initial public offering -- if it manages to go public before Dec. 31. But, until then, Tesla must keep the cash coming in, especially as it owes $42 million from its purchase of the NUMMI plant in Fremont, Calif., where it proposes to manufacture its new line of cars in conjunction with Toyota. And now, unlike in the past, there will be no more cash infusions from Musk.
Coming back down to earth from the rarified air of Valley wheeling and dealing, what will the alleged lack of cash mean to Musk's ex and support payments for his five children? Keeping a sense of humor, the soon to be ex-Mrs. Musk has made public "the extent of my golddigging" as noted by Autoevolution. As sounds likely under California community property laws, Justine Musk is looking for: the house, alimony and child support, 6 million cash, 10 percent of Musk's stock in Tesla, 5 percent of his stock in SpaceX and, but of course, a Tesla Roadster. The presence of Musk's very young fiancée, Talulah Riley, can't have helped matters.
Autoevolution reminds us not to cry for Musk as the broke billionaire still owns 65 percent of Tesla Motors. If the IPO comes to fruition, it could raise Tesla's value to some $1.4 billion.
Broke is in the eye of the beholder.
Related Resources:
- RPT-Tesla says not affected by CEO's divorce dispute (Reuters)
- Elon Musk Is Broke (Autoevolution)
- California Marital Property Laws (FindLaw)
- Jamie McCourt, Frank McCourt, And One Expensive Divorce (FindLaw's Celebrity Justice Blog)
- Divorce and Community Property Information Center (provided by Stettner & Morris)
- Divorce FAQ (provided by Law Offices of Irwin D. Tubman, LLC)
