Elon Musk took the stand on Wednesday in a Los Angeles courtroom as part of a defamation trial over his 2018 tweets, in which he called a little-known British citizen a “pedo guy.” During his testimony, a lawyer for the plaintiff asked Musk to estimate his net worth.
The Tesla and SpaceX CEO confirmed he has roughly a $20 billion fortune (Forbes pegs it at $23.6 billion), but added that his liquid assets are relatively low. “Some people think I have a lot of cash,” he said. “I actually don’t.”
The revelation adds to the stakes of the trial. If the jury levels a large judgment against Musk, he may have to sell part of his stake in Tesla or SpaceX, a move he has historically avoided. (Another possibility: He could borrow more money, using his shares as collateral.)
As much as 99% of Musk’s wealth is held in shares of those two companies, Forbes estimates, which helps explain his lack of liquidity. In 2018, for instance, the bulk of his compensation at Tesla came in the form of stock options. Musk declined to accept his base salary of $56,380.
More important, Musk, 48, owes more than $500 million in debts, according to financial documents published earlier this year. That includes $208.9 million in liabilities owed to Morgan Stanley and $213 million borrowed from an affiliate of Goldman Sachs. Musk has pledged nearly half of his Tesla stake as collateral for those loans.
Musk’s entrepreneurial journey stretches back decades. He made his first fortune after selling Zip2, a software firm, to Compaq in 1999 for a reported price of more than $300 million. Three years later Paypal, which he also cofounded, was acquired by eBay for $1.4 billion.
The South Africa native founded SpaceX in 2002 and joined Tesla in 2004; the firms quickly exhausted most of his PayPal earnings, according to a 2015 Musk biography.
“This is not the path to go to maximize riches,” he told Forbes in 2012, referring to SpaceX. “It’s a terrible risk-adjusted return.” Instead he founded the space exploration company, he said, because it was his way to “most affect the future of humanity and civilization.” He has made similar comments about his motivations at Tesla.
Musk’s recent behavior has distracted from that initial vision. In addition to the defamation suit, he stirred controversy in 2018 after tweeting that he was considering taking Tesla private, an announcement that caught investors by surprise. Following an SEC investigation, he paid a $20 million fine and stepped down as the carmaker’s chairman.
Since then Musk has remained a frequent presence in the headlines. Last month, during the introduction of Tesla’s new Cybertruck, he attempted to prove the durability of the truck’s “armor glass” windows with a metal ball. Instead the window shattered. “Oh my f***ing God,” said a surprised Musk. His chief designer tested another window. Then it shattered, too.
Still, Musk reports that more than 250,000 customers have preordered the vehicle. But, he tweeted, “Guess we have some improvements to make before production haha.”