Elon Musk Is Worth $1 Trillion And Is Still UNDERPAID

0:00Elon Musk is the world's richest man, but I think that he's underpaid and we're going to explain today why exactly that is. Now the SpaceX IPO launched on Friday. It's up 20%. The closing price on Friday was$160 per share and that drove the company's market cap to $2.1 trillion. A$2 trillion company is a big, big number. Now this is not surprising. There was rumors that the IPO was at least four times oversubscribed. So that meant there was more than$300 billion of investor interest that didn't make it into the fundraising process. Now, a big reason for this is that Elon's vision of the future, investors are buying into that.

0:31They believe in Elon. Take a listen to how Elon described his vision on Friday. I always think about this. There are always problems on Earth. There are always problems on Earth. There are always things that we wish to be better, that we want to solve here on Earth, and we should solve them. But there also have to be things that get you excited about the future, that make you glad to wake up in the morning, because you can't wait for what happens next. And that's the future that SpaceX wants to bring to you. Now, the other milestone that was achieved on Friday is that Elon Musk became the world's first official trillionaire.

1:10And that's a big number,$1 trillion. It's 12 zeros to be exact. To put this amount of money in perspective, you and I are closer in wealth to Jeff Bezos, Larry Page, or Sergey Brin than Jeff, Larry, or Sergey are to Elon Musk himself. So you gotta just imagine how crazy it is. You're one of the five richest men in the world. You look on the chart and you realize that Elon Musk has three times more money than you, even though you're one of the five richest men. That's simply crazy. It's insane. And I think that we're going to see Elon's wealth compound at a crazy rate over the coming years. Now, a big reason is that people are underestimating what SpaceX could accomplish over the next 36 months.

1:46Jordy Visser explained to me one potential outcome this weekend. Take a listen right here. So all of last year, when I was talking about micron. It was a$60 to$110 stock between January and let's say April, May, even in May. The reason people didn't want to own it is because they didn't think the earnings would happen. Okay, so then the stock goes to$700,$800,$900,$1 ,000. How does something go up a thousand percent from where it was during the first quarter of last year and it's still cheap today? Well, for that to happen, everyone's forecast on the exponential needs were wrong. This is the issue, is if SpaceX is able to send rocket ships up and back down, and by the end of 28, they're doing what he wants, which is thousands a year, which means at least three a day, where the ship is going up and coming back, then all of a sudden, the amount of satellites that he has out there, who else can do this?

2:43Who's the competition? That's part of what goes into a price. Can Google do that? They don't have the rocket ships to do that. Where are they going to secure the rocket ships? He has most of the satellites in space. So at some point, you have to get into the challenges of doing things on land, who the person is, and has he proved that he can do things that are unthinkable? And has he figured out a way to go through this? And we're all leaving out the fact that within the next five years, he'll be using humanoids to do a lot of this stuff. So I just think it's a very hard thing for people to get in.

3:09But if the earnings come through even slightly above expectations, and if he's sending rocket chips into space and they're coming back and then going back out in the same day, you're going to have a valuation change. Now, that's still on the distribution of outcomes, so I can see where people are bearish the name. I can see where they go through it. But Elon has proven that if you go against him on the possibility, he has enough of a fan base and enough people that have believed him and made a lot of money off him that I think that bid is going to be underneath no matter what. Now, that's a pretty exciting potential outcome, but not everyone is excited about this.

3:39Actually, not everyone is excited that Elon Musk became a trillionaire. In fact, there was a cast of characters that were publicly shaming Elon for his vast wealth. Bernie Sanders, he hates wealth. Bernie Sanders came out and he was swinging. He wrote that Elon Musk's rise to trillionaire status is not a time to celebrate. It's a call to action to take on the unprecedented income and wealth inequality that now exists and the greed and power of a ruling class that is destroying the social fabric of America. Bernie says that our democracy cannot survive when one man who contributed$290 million to get Trump elected becomes$700 billion richer since Trump's election.

4:15He then says that our economy cannot sustain itself when one man owns more wealth than the bottom half of our society, when 60 % of our people live paycheck to paycheck, when we have the highest rate of childhood poverty of any major nation, and when our kids will have a lower standard of living than their parents. Now, Bernie claims this is not just about wealth. It's about power. Musk and his fellow oligarchs, they want it all. And Bernie says that together, the people must fight back, that you can and must create an economy and a government that works for all, not just Elon Musk and his fellow billionaires.

4:45Now, here's the thing. Here's my take about this. I actually think that Bernie's commentary, he takes a kernel of truth and he extrapolates the conclusion out into a crazy socialist plan to confiscate private citizens' wealth. But Bernie is right. Too many people do live paycheck to paycheck. Childhood poverty should be eradicated. And every parent wants their kid to have a better standard of living than themselves. All of this seems like common sense. Let's identify the problems, let's be honest about them, and then try to figure out what the potential solutions are. But the problem is that Bernie doesn't understand that capitalism is our only chance to solve these problems.

5:17For example, SpaceX is creating nearly 5 ,000 millionaires as part of the IPO process. Those people include cafeteria workers, welders, janitors, and other non-white collar roles. These are the people that we want to create wealth for. NVIDIA, they created almost 30 ,000 millionaires who work at their company. Amazon and many others, they have estimated to have created thousands of millionaires as well. Whether we're talking about Elon Musk or any other private sector company, this wealth is being generated by growing the pie. Elon Musk did not need to make anyone poorer in order for him to create trillions of dollars in value for himself, his shareholders, and his employees.

5:53That's the beauty of capitalism. As Ron Barron put it, Elon is trying to save humanity. Take a listen to Ron's explanation here. They have to change everyone's life, changing lives. Do you think he felt a sense of satisfaction on Friday? Because obviously he's not driven by the same things as everybody else. Well, if you're worth a trillion or two or three trillion or five, what difference does it make? And that's not what he's interested in. He's trying to save humanity. And when I was listening to the interview that he did with Jamie Dimon, and the last question was, so Elon, every time I talk with you, I learn something.

6:32Every time I talk with you, I learn something. And so, you know, what do you think about this? And he says, well, I'm hoping that some future AI will say not a bad job for human. And so his goal is not the way other people's goals are outlined. And so when he's talking about what he's done so far, that's just the beginning. Now, more importantly, Elon has created this wealth by solving hard problems at scale. Tesla's consumer car is one of the safest on the market. It has saved countless lives of humans. Combine the physical car safety with the innovative full self-driving technology and you get a car that is objectively safer than anything else on the market.

7:15Who doesn't want to own a safe car? Who doesn't want to have a car that could potentially save their life? Of course, a lot of people do. SpaceX has not only brought down the cost of space launches, but as Bill Ackman wrote, SpaceX and its technologies will cause an acceleration in the growth of wages and wealth creation globally, including some of the poorest communities in the U.S. and around the world. Access to low-cost, high-speed communications everywhere will allow children around the world to be educated, families to build businesses, and life-saving medical knowledge and care to be available everywhere.

7:46Even CNN, who isn't exactly the biggest fan of Elon Musk, CNN had a nice gentleman come on and talk about Elon's impact on American society. Take a listen right here. Are you saying because Elon Musk exists and is a wild success that that is somehow to the detriment of all the people you're mentioning? Elon is creating an environment where entrepreneurship, where success, where building is celebrated. The only reason anybody's mad about this, let's just be honest, is because he supported Donald Trump for president. If Elon Musk had never gotten involved in politics, had never supported Trump, he'd be getting ticker tape parades right now for building this amazing company and sending rockets into space.

8:23It's all political. And the people who should love Elon Musk are the ones who hate him for that reason. Now, this is the type of impact that billionaires and trillionaires are supposed to have. It's like a modern day Batman. They spend their money, time, and energy trying to improve the lives of other people. They're saving lives. They're improving the day-to-day experience for humans. If Elon ran a nonprofit, he would be hailed as the second coming of Mother Teresa for this type of positive impact. And we haven't even talked about Neuralink helping the disabled, the boring company extracting people from wasted time and traffic, or the plethora of other projects he's involved in.

8:56Like I said, the second coming of Mother Teresa if it was a nonprofit. it. But now I understand why exactly do people hate Elon for all of this wealth? Well, many people don't like Elon because of politics. It's unfortunate, but that's just how modern society works. Allegiances and sometimes logic is just drawn by party affiliation. Are you red or blue, right or left? One of the big critiques of Elon from the Democrats is that he wouldn't have these companies or their related wealth without the help of the government. These critics insinuate that Elon got handouts in order to enrich himself. If that was true, then that would probably be a big problem.

9:28A lot of people would be up in arms about it. Frankly, I wasn't that well informed on the details of what happened or didn't happen with the government funding. So you know what I did? I went and I tried to find out what was the facts. I spent time looking into it this weekend. The best explanation I found comes from Digital Sam I Am. What a great name. And here's what he wrote. He wrote that Elon Musk was awarded, note not given, cost per result contracts to perform a service for the US government. The total of those SpaceX specifically is$22 billion, which includes repaid loans, state tax incentives, etc.

9:58The deal was simple. Put stuff into low Earth orbit at or below a set cost. If SpaceX does it below the set cost, SpaceX keeps the difference. If it doesn't, the company is responsible for the overrun. They had real skin in the game, it seems. The end result was that SpaceX and Elon lowered the cost of getting one kilogram into low Earth orbit by 95 to 97 % versus what NASA was paying previously. And for the record, every other company around at the same time was offered the same opportunity to bid on the contract. It's just that Musk and SpaceX are the ones who want it. Now, the handout narrative implies the taxpayers to patron and SpaceX is the dependent.

10:32Duh. The cost data, though, shows the exact opposite. Before SpaceX, NASA was paying 80 to 86 million dollars per seat. SpaceX delivered the exact same thing for 55 million dollars. SpaceX saved the United States taxpayer 300 to 465 million dollars each year on that simple thing alone. The U.S. sends about 15 astronauts to space each year. Now, on the lunar landing, NASA estimated that SpaceX's fixed price bid saved$20 to$30 billion versus the Boeing preferred cost plus approach. So SpaceX saved the U.S. taxpayer more than the total value of the contracts it earned on a single project. Plus, it also provided the U.S.

11:09government with the requested services to put stuff in low Earth orbit and at the best possible price. Now, my take is that if this explanation is true, which to the best of my knowledge, it is, That's what I saw from the people who've actually gone and looked at the data. And SpaceX was able to solve a hard problem at scale. That's how capitalism works. The entrepreneurs and companies that solve problems are given the economic reward. And that's why we need more trillionaires. The only way to make a trillion dollars is to solve an insanely hard problem at scale. You may have to solve multiple problems, in fact, to reach that level of wealth.

11:40It's impossible to become a trillionaire without positively impacting millions and millions of people's lives. So rather than attack people for succeeding, which is a very short-sighted and uninformed view, We should be encouraging everyone to solve bigger and harder problems. Maybe everyone can't become a trillionaire, but almost anyone can become a millionaire by solving problems in the local community. Grow the pie, solve problems, reward solutions, celebrate success. That is how innovation, prosperity, and economic freedom are achieved. So let's not lose sight of these hard truths. We need more trillionaires.

12:11And for all of those that are simply willing to go and claim that Elon doesn't deserve this, The one thing I will remind you, never, ever bet against Elon Musk. He's driven by solving problems. And at the end of the day, the money comes because he's building and solving global issues, right? The world's biggest problems, the world's biggest business opportunities. And there is already a lot of conversation among the frontier AI labs and the White House on both sides of the aisle of taking a ownership position in these companies. I think that we're, you know, also when I interviewed Elon on my Moonshots podcast twice in the last year, one of the things he said was that we're going to see double digit GDP growth in the next 18 months, triple digit GDP growth in the next five years.

13:03And that's on the back of these technologies. I don't, you know, he's one of the greatest wealth creators, not by, you know, by, you know, stealing from people. He's creating value over and over again. I don't think you want to, you know, disrupt this value creation engine that Elon has. That's it for today's show. Thank you guys so much for watching. Please remember to subscribe on YouTube. My goal is to get to 1 million subs on YouTube. So go hit that button and help us out. And I'll see all of you live from the desk of Anthony Pompliano tomorrow.