How Tesla & SpaceX Just Survived The 2008 Recession

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Tesla & SpaceX NARROWLY survived the 2008 recession. I want to go over that story. Another question that we should be asking is how will they do in the next recession, especially if it is worse than the last one!

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Tesla and SpaceX are among some of the most famous and promising companies in the world. Tesla is a major force of innovation and is poised to change the car industry with its electric alternatives that look like they came out straight from a sci-fi movie, while SpaceX has raced to the top of the Forbes “Most Innovative Companies” list with a modest mission of “reducing space transportation costs to enable the colonization of Mars.”
It is this innovation premium that sets them and their founder - Elon Musk - apart from the rest today.

But in 2008 things looked very different. It might seem incredible but Tesla and SpaceX had very close calls with bankruptcy. The situation became quite dire very fast after Lehman Brothers - the world’s 4th largest investment bank - shut down and funding dried up. Tesla and SpaceX were just starting out and did not have the products or the cash flow to weather the storm.

Elon Musk made about $180m when PayPal, the company he founded in 1999, was acquired by eBay in 2002. He decided to put that money into SpaceX and Tesla. Even then the two companies looked shaky and struggled to cover their operating costs. Musk said "At the beginning in 2002, I wouldn't even let my own friends invest as I didn't want to lose their money." So when the capital funding suddenly stopped in 2008, Tesla and SpaceX were in real trouble.

Musk even said that at one point it looked like he would have to choose between the two companies, “I could either pick SpaceX or Tesla or split the money I had left between them. That was a tough decision. If I split the money, maybe both of them would die. If I gave the money to just one company, the probability of it surviving was greater, but then it would mean certain death for the other company. I debated that over and over."
During a South by South West (SXSW) conference he shared the story of how the two ventures were hanging by a thread in 2008. During a Q&A session, the entrepreneur told the audience that at the time he "gave both SpaceX and Tesla a probability of less than 10% likely to succeed.”
Musk also said it was the worst year of his life. As if the impending financial ruin of Tesla and SpaceX wasn’t enough, he was struggling to make ends meet himself and was going through a divorce, which was breathlessly covered in the press.

But Musk decided not to give up. He borrowed money from friends to cover his living expenses and rent. He was determined to save both companies, one way or another. "When you put your energy into building something, it's your baby, so I couldn't choose. I put the money into both."
He then began knocking on every door he could, talking to anyone who would listen and chasing the money needed to save his two biggest ventures.

Making matters worse, during that difficult year, Tesla had a speed bump with its early model Roadster and was hemorrhaging money. And SpaceX’s first three rocket launches detonated before reaching orbit. By that time, Musk had spent $100m on SpaceX. It is safe to say that if the 2008 Falcon 1 blew apart in the atmosphere again that fall, it would have been the end of SpaceX. But the launch went without a hitch, it made history becoming the 1st privately-funded liquid fuel rocket to reach orbit.
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DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.

Видео How Tesla & SpaceX Just Survived The 2008 Recession канала Tristan Cooper