Wuff

Elon Musk is the richest person in the world thanks to the shares of Tesla, Xitter, xAI, and SpaceX that he owns. He’s forced xAI to acquire Xitter and now SpaceX to acquire xAI in order to hide their losses inside a more valuable company, but his stakes in Tesla and SpaceX provide most of his estimated net worth of an obscene $500-850 billion dollars.

Some people point out that this isn’t real wealth, it’s “paper” wealth. He may own billions in Tesla shares, but if he sold all his Tesla shares tomorrow, that would crash the TSLA stock price, so he wouldn’t rake in the current value of his share of Tesla, $90 billion as of 2026-02-10 (and throughout the rest of this post). So is his wealth just fake “paper wealth” or is it real?

Poor rich illiquid kid

One term for the mismatch between on-paper value and what you can get for something is “realizable liquidity,” but that seems more to refer to the contrast between assets that can quickly be converted into cash and fixed assets like buildings that are harder to liquidate; stocks fall in the middle. Claude.ai calls the stock worth issue a “liquidation discount” or “illiquidity discount” resulting from the “market impact” or “price impact” of dumping a lot of shares.

But there doesn’t seem to be any robust formula for working out this discount, Claude-ai guesses it would be 20-40% for Musk, so in a fire sale he’s only worth $300bn, not $500bn. Large shareholders reduce their positions slowly to minimize the discount, and certain investors are required to file a “10b5-1 plan” with the SEC setting out how they will sell their shares, so they can’t time their stock sales to happen immediately after good news or before bad news. Elon Musk doesn’t seem to have filed such a plan, but maybe he’s secretly selling and figures he’ll get a slap on the wrist for undisclosed stock sales from the convicted orange grifter’s administration.

Give me more shares or I’ll tank my own company.

In the past Elon Musk has got spending money by taking out loans against the value of his Tesla shares. In general rich company owners hate selling stock, because a) they would actually have to pay significant taxes (the horror!), and b) it reduce their control. But to buy Xitter (pronounced as in President Xi of China) he had to actually sell a few billions in Tesla. That plus Tesla issuing and selling more shares over the years (including to Toyota and Mercedes) means Musk only owns ~13% of Tesla shares.

So the thin-skinned troll publicly muses about losing interest in Tesla unless he regains ownership of more of the company. Instead of telling him to go f*** himself and finding a CEO who’ll focus only on Tesla instead of spreading racist tropes and lies on Xitter and dreaming of moon bases and datacenters in spaaaace, the Tesla board is so afraid he’ll leave and the stock will drop that they agreed to a trillion-dollar pay package that will give Musk the greater share of Tesla that he wants (and far more than all the stock grants to mere employees to give them a motivating stake in the company’s future). This is patently ridiculous; if Tesla meets the various targets in the compensation plan, Musk’s existing share of Tesla will be worth a trillion dollars, which is incentive enough to any “normal” executive. But he wants more, always more.

The whole pie is worth less than a slice, but a slice is worth whatever the market says it is

Even if he can’t turn all his wealth into cash money in a week, Musk’s wealth is very real. If a mere $10-millionaire sells $1M of assets, they have 10% less assets. But if fElon sells TSLA stock to raise $100M of cash money tomorrow that would only be 250,000 shares which is a tiny 0.4% of TSLA daily trade volume, and he’d still have 99.9% of his ~$90 billion of “paper wealth” in TSLA stock. He would have to disclose that he’s dumping TSLA stock in an SEC filing which would increase negative sentiment on Tesla… but it seems nothing will pop Tesla’s insane P/E ratio (395 times earning).

Tax wealth!