‘I Gave My Last Cash To Save Tesla In 2008,’- Musk Recounts How Tesla Was Broke

Elon Musk has said that he gave the last of the $100 he gained from PayPal to save his electric car company in 2008.

Musk who is currently the third richest man with $156bn net worth according to Forbes revealed that at the time, he had nothing sellable after the financing round.

He made the disclosure in a tweet seen by THE WHISTLER.

Musk said, “Tesla financing round closed at 6pm December 24th 2008 – last hour of last day possible or payroll would’ve bounced 2 days later.

“I gave Tesla the last of my remaining cash from PayPal. Didn’t even own a house or anything sellable”

He said this while responding to a tweet by Ashlee Vance, an American business columnist and author.

Vance tweeted, “Just occurred to me that, during the 2008 financial crisis, both Tesla and SpaceX were close to going under. Fast forward to the 2020/2021 global plague, and Tesla is the most valuable car company and SpaceX is the largest rocket and satellite company and flies people too.”

Musk had in 2002 received $180m from the proceeds of the acquisition of PayPal by eBay for $1.5bn due to his 11.7 per cent shares in PayPal.

By 2008, the global financial crisis rocked many companies and Tesla was also badly hit.

The company needed $40m from a new financing round which was closing in December that year.

Its board approved $40m in convertible debt financing.

The fund was to help bolster Tesla’s cash balance that had dropped to $9m.

“Forty million is significantly more than we need,” Musk said in a statement in November 2008.
 

“However, the board, investors and I felt it was important to have significant cash reserves.”

In October that year,  Tesla failed to secure a $100m investment round leading to the sack of 24 percent of the company’s workforce.

It also delayed the development work of the “Model S” electric car.

But with the attempt to raise $40m, Musk personally pledged that the then start-up must have enough cash to keep up its $109,000 Roadster.

The Roadster was the first battery-powered performance car.