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Elon Musk’s
Next Move

WRITTEN BY THOMAS HUGHES

Love him or hate him, Elon Musk is a colorful character with some wild ideas. If he’s not out changing the
way we do things, he’s making headlines both good bad. Noted for his eccentricity as well as his cutting-
edge brilliance, Musk is both a boon and bain to his investors. Investors, though well rewarded for their
risk, have had to put up with no shortage of antics including SEC actions. Through it all, he has remained
a visionary businessman and entrepreneur that not only thinks big thoughts but is able to carry through
on them as well. The purpose of this eBook is to explore Elon Musk’s business empire, uncover the
opportunities that are available, and speculate on what his next moves may be.

A Short Biography Of Elon Musk

Elon Reeve Musk FRS (born June 28, 1971) is an entrepreneur, industrial designer, and engineer. He is the
founder, CEO, CTO, and chief designer of SpaceX; an early-stage investor, CEO, and product architect of
Tesla, Inc.; founder of The Boring Company; and co-founder of Neuralink and OpenAI. A centibillionaire,
Musk is one of the richest people in the world.
Elon Musk was born in Praetoria, South Africa where he lived until early adulthood. The child of a Canadian
mother and South African father, Musk began his schooling in South Africa but quickly transferred to
Queens College in Canada. After two years at Queens College Musk once again packed his bags but this
time his destination was the U.S. He completed his schooling at the University of Pennsylvania with a dual
bachelor’s degree in Physics and Economics.
Musk went on to begin post-graduate work at Stanford University but didn’t complete the work. Instead
he, along with his brother Kimbal, embarked on what will become a very storied business career. His first
business was called Zip2 and provided city-guide software to local governments and businesses. It was
later bought out by Compaq in 1999 for $305 million. That same year, Musk co-founded online bank X.com
which will later merge with Confinity to become Paypal.com. PayPal.com was then bought out by eBay for
$1.5 billion before getting spun-off as a stand-alone company a decade later.

2002 - Elon Musk found Space-X. The company goes into the business of developing rocket and
spacecraft technology for sale or service to private individuals, businesses, and governments.

2004 - Elon Musk joins the board of Tesla Motors, Inc. and becomes the company’s Chief Product Architect.
By 2008 he is CEO of the renamed Tesla, Inc.

2006 - Elon Musk co-founds Solar City. It will soon be bought out by Tesla and become part of Tesla Energy,
a subsidiary of Tesla, Inc.

2015 - Elon Musk co-founds OpenAI. OpenAI is a non-profit organization researching and developing
“friendly” AI technology.

2016 - Elon Musk co-founds Nueralink. Neuralink is focused on developing brain-computer interfaces.

2016 - Elon Musk founds The Boring Company. The Boring Company is engaged in the construction
of tunnels.

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 What’s next for all of the companies
that Elon Musk is involved in?

Tesla Is All About Electricity

Tesla is well known for its place in the EV market holding 16% of the plug-in and 23% of the BEV market
share by volume. The company not only makes BEVs it is also engaged in the business of home electric
generation, batteries, and solar panels as well. As of the last earnings report, automotive revenue accounted
for 86% of the company’s net revenue.
What investors need to remember, especially in terms of the stock valuation, is that Tesla is more than
just a play on alternative energy and electric vehicles. Its groundbreaking work in the field of self-driving
vehicles, AI, solar panels, and battery technology is of importance as well. Interestingly, many of Musk’s
endeavors center around the brain, intelligence, and the harmonious interface of man and machine and
that can be seen in Tesla vehicles. Tesla is a leader in AI-powered self-driving and autonomous vehicle
technology as well as electrification.

Tesla - History & Current Status

Tesla, Inc was founded in 2003 as Tesla Motor Company, Inc. The company was founded by Martin
Eberhard and Marc Tarpenning with the aid of early investors like Elon Musk. The original goal was to
build a car company that was also a technology company built around the battery, software, and motor
technology. So far they have succeeded where no other EV company has but not in the way they first
imagined. Soon after the company’s founding, Ian Wright became the company’s third member and helped
lead a round of intense fundraising.
Elon Musk, although technically a “founder”, came to work for Tesla as chairman of the board soon after
the initial round of fundraising. His investment of $6.5 million was by far the largest by a single investor at
that early stage of the company’s life.

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Although Musk has been central to the company’s technology development he was not always involved
with day-to-day operations. That changed over time as he realized the path to profitability is understanding
every minutia of the business with the goal of trimming fat and increasing efficiency at every step of the
way. By 2008 the company’s original two founders were out following a series of disagreements leaving the
company’s future in jeopardy. That’s when Musk steps in to take control.
Musk became CEO in 2008 shortly before the company’s first model went into production. The Tesla
Roadster came to market in 2009 and was followed by the Model S in 2012, the Model X in 2015, Model 3
in 2017, and most recently the Model Y crossover in 2020. The Model 3 is the world’s all-time best-selling
plug-in electric vehicle and will likely hold that title for the foreseeable future. While the competition in EV is
heating up Tesla still outpaces its closest rival by thousands of basis points in terms of market share.

Analysis of Tesla’s current progress

Tesla’s status as the world’s leading EV manufacturer is solidifying every day. The company is working hard
to cement its production capabilities in all major markets including the construction of three gigafactories
and a possible fourth is on the way. The gigafactories are located in China, Germany, and the U.S. and
will be the three single largest end-to-end EV and battery production facilities in the world. Considering
the current global shortage of EV batteries, that move seems more than fortuitous and will help ensure
availability of parts as well as cut down on costs.
The biggest hiccup now is semiconductors and components. The global semiconductor shortage is
impacting the entire automobile industry from component manufacturers to OEMs and has production
of the Model 3 and Model Y at a standstill. More than 10,000 cars went on a “containment hold” in May
because of an undisclosed missing part with no idea when they’ll be completed. Not only will this cut into
quarterly results but it could back up the entire manufacturing process for months.
This leads us to speculate that one of Elon Musk’s next moves will be into the semiconductor industry.
The gigafactories are supposed to encapsulate EV manufacturing from end to end and so naturally should
include an ample if not an on-site supplier of microchips. Considering EV manufacturing is expected
to grow at a high double-digit CAGR for the next several decades it seems like building an EV-specific
semiconductor manufacturing facility is a really smart thing to do.

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The Shanghai Gigafactory is already in production and ramping on a quarterly basis. The Berlin Gigafactory
is expected to begin production by the end of the year. This is slightly behind schedule and due in part to
construction delays as well as sluggishness on the part of the German government and its approval process.
However, once completed, the factory will significantly enhance the company’s production capabilities and
allow it to grow unfettered for years to come. The U.S. Gigafactory is already operating on a limited capacity
and expected to be completed soon.

Tesla - New And Future Products

Tesla has at least 7 projects in the works and under development including a pickup truck, semi/tractor,
supercar, and van. Many of these vehicles are expected to launch in 2022 but there is little word on when
exactly they will come. This is what we know.

THE TESLA PICKUP TRUCK - The Tesla Pickup Truck was unveiled in 2019 to mixed reviews. The
futuristic design is reminiscent of B-quality sci-fi moves of the 70’s and 80’s but there is a method to the
madness … we think. The truck is expected to come in three models including single, dual and four-wheel
drive configurations with up to 500 miles of range. The entry-level price will start at $39,000 and go up from
there. The upshot is there are no fully electric pickup trucks on the market today. The down shot is that
increasing competition, specifically from the newly announced electric Ford F-Series, may curb demand.
Tesla says there are over 500,000 non-binding preorders so there is demand, the question is when it will
be tapped.

THE NEW TESLA ROADSTER - The new Tesla Roadster is going to be the fastest production EV on
the market says Elon Musk and with a top speed of over 250 mph, it will be. The Roaster will also have a
range of over 600 miles giving it the longest range of any EV on the market. Musk has also suggested the
Roadster may come with compressed air thrusters that will aid acceleration and possibly allow the car
to hover. The starting price is $200,000.

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THE TESLA SEMI - The Tesla Semi is a class 8 long-haul truck tractor with a range of up to 500 miles.
First revealed in 2017, it has been scheduled for production several times over the last few years but keeps
getting pushed back. The current date set for 2022 but we’ll see. Preorders from Anheuser-Busch, Pepsico,
FedEx, and others prove there is demand for the vehicle but we have our doubts as to when it will actually
launch. Investors looking to get into EV long-haul trucking would be better served to put their money into rival
Nikola (NASDAQ: NKLA) which is slated to begin production this year.

THE MODEL S PLAID - Perhaps a play on Mel Brooks movie Spaceballs, the Model S Plaid is the faster,
more luxurious version of the company’s already popular Model S. The basis Model S Plaid is already available
and a Plaid-Plus is on its way. The Model S Plaid boasts 0-60 in 2 seconds, a top speed of 200 MPH, and a
range of 520 miles.

TESLA’S $25,000 MODEL - Tesla recently announced plans to build a more affordable $25,000 model.
The new car may begin production in the next couple of years, or might not, and would be fully autonomous if
it were built. Tesla China has already formed an R&D team to develop the prototype so we have that at least to
look forward to.

THE TESLA CYBER QUAD - The Tesla Cyber Quad was first unveiled along with the Truck. The Cyber
Quad is a two-person all-EV four-wheel drive off-road vehicle we know very little about. The only detail we do
have is the Quad is expected to be released as an upsell to the Truck and may later be sold independently.
Polaris (NYSE: PII) is only one of several RV manufacturers already in production with such vehicles.

THE TESLA VAN

The Tesla Van is an adaptation of the Truck concept that encloses the bed and intended for final-mile delivery
services. There has been some speculation Musk will use the Van in conjunction with The Boring Company,
perhaps to shuttle people through his tunnels, but that is just speculation. The Workhorse Group
(NASDAQ: WKHS) would be our pick in this category.

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 Other Companies Elon Musk Is Involved With

SpaceX And The Final Frontier

SPACE EXPLORATION TECHNOLOGIES CORP. (SPACEX) is an aerospace manufacturer and
space transportation services company headquartered in Hawthorne, California. SpaceX was founded in
2002 by Elon Musk with the goal of reducing space transportation costs to enable the colonization of Mars.
Among the many goals of the mission is to build fully reusable rockets and vehicles and to that end, they
have had great success.
SpaceX manufactures the Falcon 9 and Falcon Heavy launch vehicles, several varieties of rocket engines,
the Dragon cargo capsule delivery system (used with the Falcon), crewed spacecraft, and Starlink
communications satellites.

SpaceX’s achievements include the first privately funded liquid-propellant rocket to reach orbit (Falcon 1
in 2008), the first private company to successfully launch, orbit, and recover a spacecraft (Dragon in 2010),
the first private company to send a spacecraft to the International Space Station (Dragon in 2012), the first
vertical take-off and vertical propulsive landing for an orbital rocket (Falcon 9 in 2015), the first reuse of
an orbital rocket (Falcon 9 in 2017), and the first private company to send astronauts to orbit and to the
International Space Station (SpaceX Crew Dragon Demo-2 in 2020). SpaceX has flown and reflown the
Falcon 9 series of rockets over one hundred times.
As part of its mission to reach Mars, SpaceX is also developing Starship. Starship is a privately funded, fully
reusable, super-heavy-lift launch system designed for interplanetary spaceflight. Starship is intended to
become the primary SpaceX orbital vehicle once it is fully operational.
• Starship will be fully reusable and will have the highest payload capacity of any orbital rocket ever
on its debut, scheduled for the mid-2020s.

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SpaceX is also developing a satellite mega-constellation named Starlink to provide commercial internet
service. In January 2020 the Starlink constellation became the largest satellite constellation orbiting
the Earth.
THE NEAR FUTURE DEVELOPMENTS ON FALCON 9, FALCON HEAVY, AND STARSHIP
The Falcon 9 and Dragon payload delivery systems began deploying humans to space in 2020 and so
far with great success. The first two travelers were U.S. astronauts Doug Hurley and Bob Behnken who
journeyed to the International Space Station. The ultimate goal will be to sustain quick, easy, cheap access
to space and the space stations for the purposes of science but, more specifically, the lucrative space
services and space tourism industry. It is our expectation the Falcon 9 mission could eventually be spun-off
as a stand-alone business, more than likely publicly traded, offering supplies, services, and equipment to
the greater space travel industry, but it won’t be. Going to Mars is one of Elon Musk’s personal goals and
one he will use the Falcon/Dragon system to pay for.

While SpaceX will continue to refine the Falcon 9 mission the focus is on Starship. The first of many
Starship prototype rockets have already been made and are in test modes now. To date, there have
been five high-altitude tests of the system with most surviving to landing. At least one prototype, SN11,
experienced a “rapid unscheduled disassembly” before landing. Other prototypes experienced similar
disassembly after landing.
NASA has announced it will be using the SpaceX Starship to land the next round of Astronauts on the
moon. While no date has been set we expect to see this event happened within the next 5 to 10 years.

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PROGRESS & NEW DEVELOPMENTS ON STARLINK
Starlink is an ambitious project to create the world’s first, comprehensive, global, satellite-based Internet/
wifi connection. Basically, they want to make it so that everyone in the entire world can be connected to
the Internet wherever they go. To reach the goal, Starlink will deploy “thousands” of small, mass-produced,
low-earth-orbit satellites in a constellation array. The company hopes to have nearly 2000 satellites in orbit
by early 2022 and is well on its way. The total was over 1,500 in early 2021 and SpaceX uses the Falcon/
Dragon payload delivery system to launch 60 satellites into orbit on a regular basis.

The SEC has already approved up to 12,000 satellites for the constellation and there are efforts by
international bodies to expand that limit to over 40,000. The upshot is widespread connectivity, the
down shot is that tens of thousands of satellites orbiting close to the Earth are going to be noticeable.
Regardless, the company began beta-testing the service in 2020 and hopes to have near-global coverage
by early 2022.
• Among the first tests of the Starlink network was a Tweet from CEO Elon Musk.
• Starlink beta-testers report speeds up to 150 megabits per second which is considered a
faster than average speed.
• There are over 10,000 Starlink users and 500,000 pre-orders. Pre-orders are open to the public and
can be made via the website.
There are two advantages to Starlink’s system. The first is that Starlink uses the V-band spectrum which is
a little-used and widely available bandwidth. The second is that it utilizes low-Earth orbit which is also little
used because of drag. The drag at low altitudes typically means shorter orbital lifespans but that’s not a
problem for Starlink. Starlink’s application of constellation technology allows it to use cheaper, disposable
satellites in great numbers to provide a high degree of redundancy. For those wondering, the satellites
slowly burn up over 2-3 years and do not fall back to Earth.

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WILL STARLINK EVER GO PUBLIC?
On February 9th, 2021 Twitter user Jack asked Elon Musk in a Tweet “Will Starlink IPO soon? Would love
to invest.” Elon Musk’s answer was what the market wanted to hear but still did little to cement a timeline.
According to Musk, we can expect an IPO once they can predict cash flow but that may be a while.
Starlink has its advantages but there are disadvantages too. For one, you have to have clear access to the sky
for the system to work which makes it a hit or miss for most users. The second is cost. Although the monthly
cost is only $100 there is a $499 upfront fee for equipment that makes it a little prohibitive compared to other
services. So, while we are optimistic about the success of Starlink and want to own the stock, we aren’t
holding our breath waiting for the IPO.
WILL ELON MUSK TAKE SPACEX PUBLIC?
Elon Musk has no plans to take SpaceX public, at least not until there are regular flights to Mars, and that
won’t likely happen in our lifetimes. The reason is simple. He’s a visionary businessman and self-starter
that has little patience for shareholders and their short-term needs. In his view, going public would cloud the
company’s purpose as investors chase down more obvious revenue streams in search of profits.
This does not mean there won’t be a Starlink or Falcon 9 IPO but once again, we aren’t holding our breath in
anticipation. The development of Starlink and Starship takes a lot of capital and we don’t think Elon Musk is
ready to give up control of either one. Any profits generated by either Starlink or the Falcon/Dragon system
are sure to be reinvested in Musk’s ultimate dream of reaching Mars.

The Boring Company

The Boring Company is a U.S.-based infrastructure and tunnel building company based in California.
Born from Musk’s frustration with above-ground transportation solutions in California The Boring Company
is focused on building intra-city “loop” tunnel systems that may one day be upgraded to Musk’s Hyperloop
ideas. The Hyperloop is a loop-based transportation system that uses sealed tunnels and compressed air to
propel passenger cars akin to those pneumatic systems used by drive-thru bank tellers.

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The Boring Company has completed one tunnel for testing Loop and Hyperloop traffic in Los Angeles
and there is another under construction in Las Vegas for Loop service. There are pending applications for
tunnels between Baltimore and Washington, D.C., and one connecting Dodger Stadium with Los Angeles.
The tunnel systems vary depending on intended purpose but could be empty, have a flat floor for pedestrian
traffic, or one of several transportation modes to carry passengers, cars, and freight.

The Boring Company was originally founded as part of SpaceX but became an independent company in
2018. At the time, Elon Musk owned more than 90% of the company with the remaining 6% held by SpaceX.
Since then, Musk’s ownership has been diluted via share sales and other capital-raising efforts.
Notably, The Boring Company designed tunneling machines are the same diameter as a Dragon model
space capsule. This leads us to believe The Boring Company may also be part of Musk’s dream of reaching
and colonizing Mars. The machines could be used to build tunnels for both travel and living as well as for
mining asteroids for precious resources among other applications.
WILL THE BORING COMPANY EVER GO PUBLIC?
We can not find any mention of plans to take The Boring Company public but that doesn’t mean they don’t
exist. Our take is that this company is still in the early start-up/R&D phase and far from a viable investment.
Based on what Musk has said about his other projects we don’t think The Boring Company will go public
until it has a commercially marketable product, an order book, and revenue none of which it has today.

Neuralink
Neuralink was founded in 2016 by Elon Musk and a consortium of leading scientists and entrepreneurs.
The company first made waves in 2017 when it reported work on a “sewing machine” like device that could
insert tiny threads into the brain. The threads are part of a neural interface that picks up brain signals and
transmits them to a computer.
The company’s near-term goals are treating brain diseases and other neurological disorders with the longer-
term goal of human enhancement and symbiosis with artificial intelligence. Notably, Elon Musk views
Artificial Intelligence as an existential threat to the existence of humanity.

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The work at Neuralink is controversial, to say the least, and caused no end of conflicts between the
company’s founding members. By 2021 only 3 of the original 8 were left and Musk, always the largest
shareholder, owns the overwhelming majority of the company.
As far as progress, Neuralink recently demonstrated a monkey playing the video game Pong using
the Neuralink device. While impressive, it’s not a first for science but there some other noteworthy
achievements. Among them are the type and number of neural links implanted and the wireless capability
of the device. The probes themselves are very thin and flexible, unlike previous rigid probes that ultimately
caused more damage than they could hope to correct.
The real opportunity with Neuralink, however, is the digital technology they are developing. The company
has designed an application-specific integrated circuit or ASIC to help study brain function and how
better to realize the dream of brain/computer interfacing. We see this technology aiding the quest for AI,
automation, self-driving vehicles, and the mission to Mars.
WILL NEURALINK EVER GO PUBLIC?
There are no plans to take Neuralink public that we know of. Like with his other projects, we don’t think Elon
Musk is in a hurry to have his research come under the thumb of public investors. At some point in time,
this company may produce a product or technology it can sell, until then we see this as an interesting line
of research that needs to be monitored and one that will likely feed into his other projects.

The Tesla Stock Forecast

One of the biggest debates on Wall Street today is what, exactly, is Tesla worth? Low-end estimates from
the likes of JP Morgan, Barclay’s, and Citigroup have the stock pegged in the range of $100 to $200. The
higher-end targets see the stock trading closer to $800 (Credit Suisse), $900 (Morgan Stanley), and even
$1000 (Wedbush).
The discrepancy in pricing revolves around how you look at the company and there are many facets to this
company. On the one hand, it’s an automobile stock and should trade close to 10X or 11X earnings like well-
established leaders GM and Ford. On the other, it’s an EV company with growth in the forecast so warrants
a higher multiple. The question is, how high of a multiple because 125X earnings is a little steep even for an
EV company.

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One reason the stock warrants such a high multiple is Musk himself. An investment in Tesla is more than an
investment in autos, EVs, batteries, and solar. An investment in Tesla is an investment in Elon Musk’s vision
and that vision is revolutionary. In our view, the value of Tesla stock is the sum of Tesla shares plus the Elon
Musk premium which includes all of his other projects. Tesla and SpaceX are not likely going to merge but
we would not be surprised to see the company start making space and tunnel-capable vehicles.
Looking at the Musk empire from the historical perspective there are two things that stand out. The first
is that all of his projects seem to have a connection be it alternative energy vehicles, vehicles for space
travel, autonomous driving, brain/computer interface, and AI. Basically, they all seem to play into a theme
that could lead Tesla, SpaceX, and The Boring Company to become the premier providers of extraplanetary
vehicles and infrastructure services in the solar system and that is not a joke.
The second is that Elon Musk isn’t afraid to combine projects when he sees a benefit to them. This is evi-
denced by Tesla’s purchase of SolarWind, the purchase that transformed Tesla Motors into Tesla, Inc. With
that in mind, we think it not only possible but likely one or more of Elon’s non-publicly traded companies
will be merged together or even possibly bought by Tesla over the coming years. The takeaway is that, if
you want to invest in Elon Musk and his projects, unless you’re an accredited investor, your only option is to
buy Tesla.

THE BEARS ARE HUNGRY FOR TESLA

If the name Michael Burry sounds familiar it should. He rose to fame shorting the mortgage market during
the lead-up to the 2008 financial crisis and is the basis for the movie “The Big Short”. His newest project is
an investment firm called Scion Asset Management and it is betting big against Tesla. The firm reported it
held puts on 800,100 shares of Tesla as of March, 31st with no word on when they expired. With Tesla down
more than 33% from its 2021 high he and others like him stand to make a lot of money depending on when
it is they opened their positions. The risk for the market is that short-sellers and bearish trades will cap
gains or even drive shares lower in the near to short term. In our view, a move below the $550 level could
spell doom for this stock unless and until some new catalyst emerges.

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THE TECHNICAL OUTLOOK: TESLA IS IN CONSOLIDATION, LOWER PRICES ARE POSSIBLE
The price action in Tesla began going ballistic in mid-2019 and barely paused for the next two years.
The move took the stock up more than 1800% from mid-October 2019 when the action started to heat
up but has since let off some steam.
The stock is down now more than 33% from the 2021 high and looks like it might be sitting on support
but we’re not confident support will hold. With growing headwinds in the form of microchip shortages,
component shortages, rising input costs, delays with the Gigafactories, and an uncertain product launch
schedule we see a real chance this market could continue to sell-off. If the $550 level fails to hold, the
downside targets exist at the $400, $300, and $200 levels.

Strong Support?
Possible Target

Bearish

Dialing into the daily chart it looks like support is holding up at the $550 level at least for now. Price action
is bouncing upward from $550 with sympathetic indicators but it is still too soon to tell if there will be a
full reversal and recovery of the recent all-time high. At best, the near-term action is going to be sideways
without a catalyst to move prices and the next best catalyst we can see is the Q2 earnings release
scheduled for July. Until then we urge investors to be extremely cautious with new money and keep a close
eye on the $550 support level if you already own the stock.

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 Oversold and consistent
Bouncing from support level with support at current
price levels

TESLA IS A THREAT TO ITS OWN SHARE PRICE

Tesla is a cutting-edge technology company not only researching and developing new EV and battery
technology but also building out a massive infrastructure to support its end goals. To that end, it needs
a lot of cash, a lot more cash than sales of electric vehicles alone will allow. Tesla hasn’t been shy about
selling shares to raise money in the past and is very likely to do so again now, while share prices are still
so high. The latest sale was at the end of 2020 and brought in roughly $5 billion while diluting shareholder
value. With short-sale action in the air, analysts like Bank of American lowering their price targets, and the
possibility Tesla will sell more shares we think the risk in Tesla is firmly skewed to the downside in 2021.

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