Warren Buffett missed a trick by not investing in Tesla at a rock-bottom valuation, Elon Musk says
- Warren Buffett could have invested in Tesla when it was worth almost nothing, Elon Musk said.
- Buffett passed on Tesla at a $200 million valuation in 2008, Musk previously said.
Warren Buffett missed a trick when he passed on Tesla early on, Elon Musk said.
"He could've invested in Tesla when we were worth basically nothing and didn't," the SpaceX and Tesla CEO posted on X, the website formerly called Twitter, on Thursday.
He was responding to a post highlighting Buffett's vast wealth and the enormous value of his Berkshire Hathaway conglomerate.
The electric-vehicle pioneer noted in March that Buffett could have invested in Tesla when it was worth just $200 million. The automaker's market capitalization was $687 billion at Thursday's close – or more than 3,000 times higher.
Musk also highlighted in February that he had lunch with Buffett's business partner and Berkshire's vice-chairman, Charlie Munger, in late 2008. The Tesla chief said Munger could have purchased a stake in Tesla at the same $200 million valuation, but declined to do so.
Tesla secured a $2 billion market cap when it went public in 2010. Its value surged as high as $1.2 trillion in November 2021, but has tumbled by more than 40% since then.
Still, if Buffett and Munger had purchased, say, a 10% stake, it would be worth about $69 billion (assuming no dilution). That figure is close to 8% of Berkshire's market value.
However, Buffett and Munger were never likely to invest, as they famously look for dominant, profitable companies in industries they understand. In 2008, Tesla was losing money, attempting to disrupt powerful incumbents such as Ford and General Motors, and trying to revolutionize the transportation industry. Betting on the fledgling EV maker was probably too risky a prospect for Buffett and Munger.
However, the Berkshire duo opted to invest $232 million in Chinese EV maker BYD in 2008 instead. Berkshire's stake mushroomed in value to more than $7 billion by early 2021, and the conglomerate has cashed in well over $1 billion of its BYD stock in recent months.
Musk would clearly like Buffett to be a Tesla shareholder, despite his jabs at the investor in recent years. He's slammed Buffett's job of researching companies and allocating capital as "super boring," questioned his public image as a "kindly grandfather," and declared he's not the Berkshire chief's "biggest fan."
On the other hand, Musk has acknowledged the value of Buffett's work, quoted him several times on Tesla earnings calls, and even expressed a desire to meet him during an interview in 2008.
As for Buffett, he's questioned why Musk tweets himself into trouble, and once challenged the tech billionaire to disrupt the candy business. More recently, he's credited him for beating the odds with Tesla and tackling virtually impossible problems.