Thread by @jpr007

@elonmusk @valleyhack So let’s think about this for a minute

10 to 20 years from now the Tesla businesses driving clean transportation and sustainable energy will be maturing

- they will be big businesses

- they will be strong businesses

- they will be profitable businesses

@elonmusk @valleyhack And they will be cash-generating businesses

Some folk might think that Tesla should pay out those cash flows as Dividends

- but that forces the share owners to pay income taxes from those Dividends

Which immediately cuts the value of that cash

@elonmusk @valleyhack Other folk might think that Tesla should pay out those cash flows as Stock Buybacks

- but that forces the share owners to pay capital gains taxes on those shares that get removed from circulation

Which also cuts the value of that cash

@elonmusk @valleyhack So paying out cash to investors is generally not capital-efficient

And it is better for a company to reinvest its investors’ capital in new growth opportunities

@elonmusk @valleyhack And now Elon Musk reminds us that :

“Long-term purpose of my Tesla stock is to help make life multiplanetary to ensure its continuance”

“The massive capital needs are in 10 to 20 years”

@elonmusk @valleyhack Which is perfect timing for Tesla to start investing its excess cash generation into helping make life multiplanetary

- and we can easily imagine numerous ways that its technology expertise should be able to assist with that huge mission

@elonmusk @valleyhack Normally large companies face the problem of only having smaller business opportunities to invest their excess cash into

- so it is hard for these new businesses to move the needle in terms of sustaining the corporate growth rate

@elonmusk @valleyhack But helping to “make life multplanetary” is actually a bigger business opportunity than Tesla’s current business mission

So we can be confident that there will be no shortage of new large-scale growth drivers

- and no shortage of interesting new challenges for the talented team

@elonmusk @valleyhack To grow a business to a large scale you need four ingredients :

✅ Large scale opportunities

✅ Core technologies or capabilities

✅ Great human talent

✅ Access to sufficient cash

@elonmusk @valleyhack These should all be present 10 to 20 years from now on a scale sufficient to drive Tesla forwards beyond what we can see today

And realistically, without approaching it this way how would it ever be possible to think of making life multiplanetary ?

@elonmusk @valleyhack There are no other sources of funding large enough and intelligent enough to allow this idea to be pursued beyond a few trips to the Moon

History has already shown us that

@elonmusk @valleyhack So when we think about the opportunities for teamwork between Tesla and SpaceX, it is fair to say that the accomplishments of the present are merely prelude to the future

- the building blocks if you will for a practical future of extraterrestrial life

@elonmusk @valleyhack @threadreaderapp unroll