The big boy turns into a little girl. The awakened Musk angrily turns to the Republican Party. Today I realize I am myself. After completing Elden Ring, on October 28, 2022, Musk purchased Twitter for $44 billion.
People are not clear about Musk's true feelings at the time. The entire Silicon Valley and the Democratic Party have been bound for over 30 years. Even if some are dissatisfied with the Democrats, they mostly engage in balancing policies by donating to both parties. Businessmen like Musk who are All in Trump are truly too different.
But at least his longtime friend Peter Thiel can understand it all. Peter Thiel is Vance's sponsor, and Musk's gamble is actually Trump. Bright and dark, right and wrong; rather than saying this election is a victory for Trumpism, it is more accurate to say it is a comeback for Musk and Peter Thiel.
Ultimately, Musk is a businessman who hopes that the costs he incurs can generate more profit, especially since gambling on politics has direct consequences that can be settled abruptly. Victory in this election raises the question: what about four years later, or eight years later? Only by becoming a true controller can one stand invincible, and Musk's thinking is quite simple: to become the spokesperson for the entire American high-tech industry, to be the new benefactor of millions of workers, naturally he can weather political fluctuations.
This article roughly estimates how much Musk has invested in this election, as well as what direct and expected returns he might achieve.
"How many times the benefit of farming?" It was said: "Ten times." "How many times the profit of pearls and jade?" It was said: "Hundred times." "How many times the gain of being the master of a nation?" It was said: "Countless."
Twitter was acquired for $44 billion, but Musk did not buy it with cash; instead, he used Tesla stocks as collateral to borrow, with Sequoia providing $800 million.
America PAC, PAC stands for Political Action Committee, which allows Musk to exceed the limits of personal small donations and make other contributions. Musk's personal donations range from $110 million to $177 million.
The above are the two largest expenses, with direct donations around $100 million. However, purchasing Twitter was clearly aimed at assisting Trump's political campaign and should be included.
Next is Musk's potential profits. First are the Tesla stocks that everyone is excited about, which saw a single-day surge of 10%. Musk personally holds 20.5% of Tesla shares, and before acquiring Twitter, he held about 22% of Tesla shares. After acquiring Twitter, he went through a selling period, and the market generally believes this debt belongs to Musk personally.
Let's calculate a sum: of the $44 billion spent on acquiring Twitter, the debt belonging to Twitter is $13 billion. Meanwhile, Musk sold stocks worth about $23.08 billion at market price before and after the acquisition. Considering that Musk's acquisition of Twitter was purely a political speculation, the sum of $23.08 + $1.77 = $23.257 billion is his true investment cost for this election, as Twitter's commercial value is clearly lower compared to social products like Facebook, Instagram, and WhatsApp.
Calculating at a cost price of $23.257 billion, it is clear that Musk's return rate cannot be calculated as (2900-2620)/1.77=158 times based on the increase within five days. If there were such a good business, then obviously all speculators in the financial market would go crazy. A more reasonable estimate of Musk's actual profit should be (2900-2620)-23.257= $4.743 billion.
Of course, no matter how you calculate it, it's all for fun, so don't get too tangled up. Interestingly, Musk's additional profits mainly come from Bitcoin, Dogecoin, and the anticipated future government contracts, which may be the major part.
The wisdom of humanity is contained in two words: hope and waiting.
Musk has been preparing for the Republican-Trump victory for two years, but he's been pulling orders for SpaceX for over ten years, mainly government orders. This is similar to how Tesla relied on selling carbon credits in its early days. When a business grows to a certain extent, it's impossible not to interact with the government and enterprises. Considering these factors, let's see how much Musk can theoretically earn after this election.
Image description: Elon Musk's personal timeline
First is the Bitcoin that Musk holds through Tesla. He currently holds 11,509 Bitcoins, which is the remaining portion of the 43,200 Bitcoins purchased for $1.5 billion in 2021, with an average purchase price of around $35,000. Although Tesla has sold a portion in the meantime, experiencing losses and gains, the current value of this portion of Bitcoin is $860 million. Due to the frequent price fluctuations and for Musk, whose net worth is in the hundreds of billions, this is nothing. Let's tentatively calculate it as an expected profit of $1 billion.
Next is the profit from Dogecoin, which is truly incalculable. Although Musk probably holds Dogecoin, it's impossible to confirm or verify. It can only be considered part of Musk's concept stocks/coins, which really cannot be quantified.
Finally, there are government orders. Contrary to what many might imagine, the U.S. government's fiscal expenditure has remained stable at around 40-50% of GDP for years. Government orders are crucial for various large companies, especially high-tech enterprises. For example, Amazon's Bezos, who announced neutrality, offended Trump, leading Microsoft Azure to acquire the $10 billion government cloud service contract that AWS lost. To add, although Gates donated $75 million to Harris, Microsoft also made many donations to the Republican Party and even cut its DEI department (Diversity, Equity, and Inclusion), showing a flexible political positioning.
Currently, Musk's companies include SpaceX, Twitter (X), Tesla, The Boring Company, Neuralink, and xAI. The main products that can secure government contracts are rocket launches and Starlink communication services. For example, by the end of Trump's first term in 2020, Musk had secured about $8 billion in government rocket launch contracts, mainly from NASA and the Air Force.
Currently, with Boeing's struggles (two astronauts are still up in the sky), and Bezos's Blue Origin progressing slowly, during Trump's second term, rocket launch contracts will significantly increase. In June this year, NASA awarded SpaceX a contract worth $843 million.
In addition, the U.S. government will strengthen support for the next generation of communication networks, and Starlink has already secured a $70 million contract with the U.S. Space Force. These services will further increase with Trump's presidency.
Conclusion
If Zhang Juzheng is a model of scheming for the country but clumsy in personal affairs, then Musk is the embodiment of Lü Buwei. Engaging in business is not as good as venturing into political investment; with $23 billion and two years of planning, Tesla's stock price alone recouped costs within five days, generating nearly $5 billion in profit.
From a long-term perspective, the government contracts and subsidies over the four years will become more tangible as D.O.G.E. becomes increasingly real. Although the big boss claims to cut $2 trillion in government spending, it certainly doesn't include his own government contracts.
