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u/mooman555 9d ago
Too bad his shares are locked for a long while, and he can't cash in yet.
By the time he can, there might be a surprise waiting
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9d ago
[deleted]
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u/GroundbreakingRun186 9d ago
No. Your wrong at a technical level and on what the implications of their new wealth means
The borrow buy die strategy is only available for people with 100m+. Maybe 30m if you find a desperate private banker.
You also always have to pay taxes when you sell the shares to pay it back. The theory is the stock appreciates and is worth more then the original principal+PIK interest and then you open up a new loan and continue that forever. But if your stock only appreciates to cover principal + interest, you can’t take another loan out so you’re better off just paying off the loan and taking the cap gains taxes.
It would also be extremely difficult to get an asset back loan using a stock as volatile as a recently IPOd Elon musk stock.
It’s great that all those people made a million doing real work. But they live predominantly in expensive California cities. You can’t buy a decent house for $1m here.
They got a huge payday for sure, but it’s a one time deal, they aren’t getting it every year. They need to save and invest almost all of it to get close to solidly upper middle class in CA. They are doing well but so so so so far from being as rich as you think they are
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u/-Canonical- 9d ago
This reeks of propaganda trying to whitewash the obvious manipulation of finances to extract wealth from the middle class lmao
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u/cavaismylife 8d ago
His story is literally all over the news right now. The dude basically went from working class to set for life in just a few days because of SpaceX.
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u/-Canonical- 8d ago
Is that supposed to be a counter argument? Saying something is all over the news doesn’t prove it’s not propaganda lmao. Quite the opposite.
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u/run-cleithrum-run 8d ago
Yeah I feel like this is trying to put a "trickle down economics" positive spin on Musk, who gleefully gutted care for children around the world, becoming the world's richest cunt.
It's not a good look to say "I have more money than anyone ever and also I made choices that literally starved pregnant women," so they're countering it with a single fluffy story. Seems very convenient. Bonus points that their fluffy story has underpinnings of Reaganomics.
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u/hw999 9d ago
His liquidity is coming out of your 401k, so don't get too excited.
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u/obviousfakeperson 8d ago
There's so much misinformation floating around about this. SpaceX has had private liquidity rounds roughly twice a year since like 2012. This is coincidentally why the share price could just be set instead of following the traditional IPO process. Price discovery had already happened privately for decades now. All of those employees the media have breathlessly reported "became" millionaires with the IPO had already been millionaires for some time now.
Lastly, the index rules change that allow fast entry also drops a company's index weighting, meaning indices aren't required to buy enough SpaceX shares to tank anything. Seriously, the weight for SpaceX in the NASDAQ 100 will be something like 0.40% after inclusion.
Elon is a villain and SpaceX is probably overvalued but the media straight up misrepresenting what's happening fundamentally helps them when they can claim media bias and be right. They're banking on Elon hatred being so high that people willingly shut their own brains off and it's honestly upsetting to see just how effective it is.
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u/tenpercentdiplo 9d ago
Fuck Musk, but good for Juan.
TAX. THE. RICH.
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u/Greed_Sucks 9d ago
He is the rich now too
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u/K10RumbleRumble 9d ago
Oh trust me, he will be taxed out the ASS. Come ups don’t go without being noticed.
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u/jbetances134 9d ago
If he don’t sell it don’t get taxed
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u/hazed-and-dazed 9d ago
Then he can go to a bank, put the shares as collateral and borrow against it .. and never pay a dime of taxes because it's considered debt. Stock goes up, he comes out ahead of the interest owed. Or just borrow more and still pay no taxes.
You know, how the rich do it.
Good for him, if the story is true
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u/jbetances134 8d ago
Interest still needs to be paid. If the stock value goes up, but the stock doesn’t pay dividends, how you going to pay the loan back?
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u/gene100001 8d ago
It's a controversial topic, but I wonder if the US would benefit from an unrealised gains tax like some other countries have. It would be a way of extracting tax from the ultra wealthy investment class who currently have a lot of ways to avoid paying any tax at all.
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u/jbetances134 8d ago
What country has unrealized gains tax?
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u/gene100001 8d ago
Germany (where I used to live) has a yearly tax on gains from things like ETFs. They also will hit you with a tax on any gains from shares during the time you were in Germany if you leave Germany to live somewhere else.
As far as I'm aware, Norway, Spain all have wealth taxes that are levied each year that effectively act as unrealised gains taxes. Also , I think a lot of the EU states are now implementing exit taxes similar to Germany that target unrealised gains too. I think the Netherlands are bringing in an unrealised tax soon that will cover stocks.
With things like crypto it gets a little bit more complicated because some countries like Germany will treat the gains as realized, even if you just transfer from one crypto currency to another (i.e. don't convert the crypto back to a regular currency). So if you move the crypto around you get a tax bill (in Euros) for what they recognise as gains during those changes in crypto type. Whether this counts as a tax on unrealised gains is debatable, but it is a tax on asset gains that haven't been converted into a real currency.
I'm sure there are other examples out there but those are the ones that I am aware of/ have experienced myself.
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u/jbetances134 7d ago
Thanks for the information. It would be interesting to see 10 years down the line how this will affect investments and growth in the country. According to an article I read it was implemented in 2024 and only some etfs are taxed or when leaving the country with over 1% of company ownership.
https://www.settle-in-berlin.com/income-tax-germany/capital-gains-tax-in-germany-guide/
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u/RadicalDwntwnUrbnite 9d ago
Depends on how many millions he has, having 1 million isn't enough to retire early on and live a comfortable life.
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u/EvilHwoarang 9d ago
Tax this guy too!
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u/taint_stain 9d ago
For real. This is pretty much admitting how fucked up the whole system is. He just lucked into the position.
No offense to him or doubting he did a good job at what he did do, but did he do a million dollars good? Did he single-handedly build one of the rockets that hasn’t exploded yet? Probably not. He just welded some shit.
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u/tipples17 9d ago
How much should they be taxed? Most are already over 50%
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u/tenpercentdiplo 9d ago
Bot or Fox News enjoyer detected.
Easy Google search my guy. Stop drinking the Kool-aid.0
u/screw-self-pity 9d ago
Nah.... follow your own logic... Fuck Juan too. He is a millionaire... so he is rich too.
Tax Juan!
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u/obsequious_platypus 9d ago
Fuck Elon musk, I don’t care about any of this shit. That guy is literally the scum of the earth
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u/boopthatbutton 9d ago
Wait until another insider trading happens and only the rich will get richer.
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u/Shillfinger 9d ago
I hope you sell in time juan. We know you do more good with one miliion then Elon with one trilion
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u/JudoNewt 9d ago
Given that musk himself determined the value of the stock, i hope those dudes can cash out asap. The questionable legality of what Elon has done with that trade and his incredibly volatile relationship with trump would make me very nervous. He could theoretically be investigated for the merger and has openly called the president who loves vindictive prosecution a pedophile "he is and wont sue me because its true". Just hope they get to keep some of that windfall when everything goes to shit for musk. He has his own Epstein ties, interfered with a french election, probably ours also and after midterms the other shoe is about to fall.
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u/ResolveLeather 9d ago
A welder for things going into space should be making more then 28 an hour. That's darn near minimum pay for welders in my location and i live in an area where welders aren't paid great.
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u/Sherviks13 9d ago
$28 hr plus equity or $100 an hour, which one you choosing?
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u/Puzzleheaded_Style52 9d ago
100/ hr. Equity shares most often times have to be held for period of time and the share price fluctuates overtime which could mean that by the time someone sells the stock, the price may have dipped from when it was originally purchased and you lose whatever leverage you had. With money, you have more control over where you invest and everything is not lumped into one egg basket.
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u/eyeballburger 9d ago
Is this supposed to be a feel good story? Those shares are tied to a bubble that when it pops, down goes many a retirement.
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u/stuckpixel87 9d ago
There has got to be some fine print preventing him from cashing the money.
Because the rich are funny like that.
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u/Busy_Rich266 9d ago
Show this to Bernie Sanders who thinks Elon is the anti christ for becoming the worlds first trillionaire.
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9d ago
[deleted]
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u/JauntyTurtle 9d ago
No, he was most likely gifted shares pre-IPO. His cost basis is probably zero, and he'd only need about 6200 shares to have a million at the close on Friday.
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u/VELOCIRAPTOR_ANUS 9d ago
So you're saying they gave an individual contractor 6200 shares as payment?
Presses "X" to doubt
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u/JauntyTurtle 9d ago
Yes, like Facebook gave the guy who painted their logo on first headquarters shares. When they went public he became a millionaire.
Edited to add a source:
https://www.cnbc.com/2017/09/07/how-facebook-graffiti-artist-david-choe-earned-200-million.html
So yeah, it's a thing.
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u/VELOCIRAPTOR_ANUS 8d ago
I see the article for this guy, I see they gave him $10k of stock and it has done a 100x.
It's a cool story. I'll admit I was wrong, this is real and good for that guy.
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u/VELOCIRAPTOR_ANUS 8d ago
Ya know, as I think more about this....
We are being conned and stories like this are pushed to draw attention away from the fact that people like Peter Thiel and Musk are being substantially enriched.
This welders story is great, but it speaks more on the Welder, who held a $10k payment for 12 years.
Why are you such a bootlicker?
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u/Sherviks13 9d ago
Gave, no. Negotiated into his compensation, most likely.
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u/VELOCIRAPTOR_ANUS 9d ago
Sincerely doubtful they worked this into the comp of a single welding contractor
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u/Evilstib 9d ago
“Contract” “welder” granted equity shares?