AP
- Warren Buffett should have invested in Tesla early on, Elon Musk says.
- Buffett could have bought in when Tesla was worth 0.1% as much, or less than $7 billion, Musk says.
- Musk and Buffett have traded numerous compliments and jabs over the years.
Warren Buffett should have invested in Tesla when it was worth a tiny fraction as much, Elon Musk says.
"Too bad he didn't invest in Tesla when it was 0.1% of today's value lol," Musk said in a X post over the weekend.
The Tesla and SpaceX CEO and X owner was responding to George Mack, who writes a newsletter about the best 0.1% of ideas, videos, and articles he creates or comes across. Mack had posted an analysis of a question that Buffett once posed a college class: "If you could invest in a friend and get 10% of their income for life -- who would you pick?"
Musk's post suggests that Buffett's Berkshire Hathaway could have bought into Tesla when it was worth less than $700 million, given the electric-vehicle maker's market capitalization was $682 billion at Friday's close. If Buffett had invested, say, $70 million for a 10% stake, the position would now be worth about 1,000 times as much or $70 billion today, assuming no dilution.
Musk has previously said that Berkshire had the chance to buy a stake in Tesla for under $200 million in late 2008. The automaker notched about a $2 billion valuation when it went public two years later, and its market cap peaked at over $1.2 trillion in November 2021.
However, Buffett and his team poured $232 million into Chinese EV maker BYD in 2008 instead. That wager ballooned in value to over $7 billion by early 2021, and Berkshire has cashed out over $1 billion of profits in recent months.
Even if Berkshire hadn't invested in BYD, it's hard to imagine that Buffett would have bet on Musk. The famed investor prizes value, predictability, and profitability, and Musk has said many times that Tesla was on the brink of bankruptcy during the financial crisis.
Still, Buffett has given kudos to Musk for not getting crushed by industry giants like Ford and GM, and for working to solve some of the world's toughest problems.
For Musk's part, he's pointedly said that he isn't Buffett's biggest fan, and views his job of allocating capital as boring. But he's also underscored the investor's exceptional skill at investing and the value it provides. Also, given Musk's numerous comments about how Buffett missed out by not betting on Tesla, it's clear he would welcome the Berkshire chief's backing.