Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, missed out on a major investment opportunity when he passed on Tesla early on, according to Elon Musk, the CEO of SpaceX and Tesla. Musk recently took to social media to remind Buffett that he could have invested in Tesla when it was worth almost nothing, and he chose not to. This missed opportunity is particularly striking considering that Tesla’s market capitalization now stands at around $700 billion, representing a monumental increase from its early valuation. In this article, we explore the details of Buffett’s missed chance and his relationship with Musk.
Warren Buffett’s Missed Opportunity: Passing on Tesla When it Was Worth Almost Nothing
Back in March, Elon Musk pointed out that Warren Buffett could have invested in Tesla when the electric vehicle (EV) company was valued at just $200 million. At that time, Buffett chose not to invest, despite the enormous potential that Tesla would eventually realize. Tesla’s market capitalization has since grown to over $700 billion, making it one of the most valuable companies in the world. Musk’s recent comment on social media serves as a reminder of the missed opportunity that Buffett had to invest in Tesla when it was still in its nascent stages.
Elon Musk Reminds Buffett of His Missed Investment in Tesla
Elon Musk’s recent tweet was a direct response to a post highlighting Warren Buffett’s vast wealth and the value of Berkshire Hathaway. Musk’s tweet emphasized that Buffett had the opportunity to invest in Tesla when it was essentially worthless, but he did not take advantage of it. Musk’s comment underscores his belief that Buffett missed out on a significant investment opportunity that would have yielded substantial returns. Despite their differences, Musk seems to have a strong desire for Buffett’s validation and recognition.
Tesla’s Market Cap Soars to $700 Billion – A Reminder of Buffett’s Missed Chance
Tesla’s impressive growth over the years makes Buffett’s missed opportunity even more glaring. From its humble beginnings with a valuation of $200 million, Tesla’s market capitalization has soared to approximately $700 billion. This massive increase in value serves as a constant reminder of the financial windfall that Buffett could have realized had he invested in Tesla during its early stages. However, it is important to note that investing in a company like Tesla, which was disruptive and considered high-risk, may not have aligned with Buffett’s investment strategy.
Buffett and Munger Were Wary of Investing in Tesla, Opted for BYD Instead
Warren Buffett and his longtime business partner, Charlie Munger, were not inclined to invest in Tesla during its early days. Buffett and Munger typically seek out dominant and profitable companies in industries they understand, which may explain their hesitancy to invest in a company that was unprofitable and attempting to disrupt established players in the automotive industry. Instead, in 2008, Berkshire Hathaway invested $232 million in Chinese electric vehicle maker BYD. This investment turned out to be successful, with Berkshire’s stake exceeding $7 billion by 2021.
The Love-Hate Relationship: Musk’s Desire for Buffett’s Approval Despite Their Differences
Elon Musk and Warren Buffett have had a slightly contentious relationship over the years. Musk has publicly criticized Buffett’s investment strategy and his lack of interest in investing in cutting-edge companies like Tesla. However, Musk has also acknowledged Buffett’s expertise and wisdom, quoting him on Tesla earnings calls and expressing a desire to meet him in the past. Despite their differences, Musk seems to hold a certain level of respect for Buffett and would have liked him to be a Tesla shareholder.
Warren Buffett’s decision to pass on investing in Tesla when it was worth almost nothing serves as a reminder of the missed opportunities that even the most successful investors can have. While Buffett and his business partner Charlie Munger opted for a different investment in the EV space with BYD, the tremendous growth and success of Tesla have made Buffett’s missed chance more apparent. Musk’s recent comments on social media highlight his desire for Buffett’s recognition, despite their occasional clashes. Despite the difference in investment philosophies and strategies, both Buffett and Musk have had a significant impact on the business and investment landscape.
Analyst comment
This news is negative for Warren Buffett as it highlights his missed opportunity to invest in Tesla when it was valued at a low price. The market will likely see increased scrutiny on Buffett’s investment decisions and may question his ability to identify high-growth companies. However, it is important to note that this missed opportunity may not have aligned with Buffett’s investment strategy, which focuses on dominant and profitable companies.
