Elon Musk’s $250 million Trump political contribution has boosted the value of his Tesla stake by nearly $50 billion
That’s a nice investment return if you can get it.
The New York Times reported last night that Elon Musk, the world’s wealthiest man, spent more than a quarter of a billion dollars down the stretch of this year’s campaign to get Donald Trump elected, according to federal filings.
While that seems like a crazy amount of money on its face, and it certainly is in the pantheon of political contributions, consider: so far it looks like he’s getting a pretty insane return on that investment.
Musk owns about 13% of the outstanding shares of Tesla, which has been on a rocket ship that took off the morning after Trump’s election. Since the market closed on Election Day, the value of his stake has gone up by some $48.5 billion, according to FactSet data.
That’s not to mention the potential increase in value of anything else he owns that’s gone up because of Trump’s election, too. Looking at you, SpaceX. Bloomberg’s tracker of billionaires’ net worth shows that Musk’s has ballooned by nearly $100 billion since November 4, from about $264 billion to nearly $362 billion.
That type of return on Tesla, over that time period, blows venture capitalists’ wildest dreams for a home-run investment in a startup out of the water. To put it into context, if you’d have put $250 million into Apple in the day the company debuted the iPhone, you still wouldn’t have made even half as much money by now as Musk has on Tesla through his support of Trump.
So yes, as far as political contributions go, Musk’s backing of Trump is unheard of. But it was pretty much a foregone conclusion that Tesla stock would rise if Trump were elected given the close ties between the two men and investors’ expectations for a relaxed regulatory environment, even if some tax incentives to buy electric vehicles would get scrapped along the way. The stock responded that way immediately, rising 15% overnight after Trump won.
Musk certainly knew that, he spent accordingly, and now he’s got $50 billion of paper gains to show for it from one stock alone.
