In the course of one year, from January 2019 to January 2020, Tesla’s shares shot up by an astronomical 700 percent. For a brief time, when Tesla shares again dropped slightly, Elon Musk became the wealthiest person on earth, eclipsing the fortune of Amazon’s Jeff Bezos by almost $5 billion.
Billionaire tech investor Chamath Palihapitiya and chairman of Virgin Galactic wasn’t surprised. “I’ve looked up to him for a long time,” he said in an interview on CNBC in January. “About five or six years ago, I thought he was just building a great car company, but somewhere along the way we began to realize that he was actually building an energy company. He was showing us that climate change mattered. It’s taken six years for everyone to realize the same thing, and now he’s being rewarded.”
According to Palihapitiya, it makes complete sense that the world’s richest person is someone fixing climate change.
“Tesla is a distributed energy business, and they’re busy figuring out how to harness energy, store it and use it in a way that allows humans to be more productive,” he says. “The big disruption that’s coming is power utilities,” says Palihapitiya. “There are trillions of dollars of bonds, CAPEX, and value sitting inside the energy generation infrastructures of the world.”
A few years ago, Palihapitiya tweeted that he thought the world’s first trillionaire would be someone who fought climate change. “It may very well be Musk,” he notes. “But if it isn’t him, it will be somebody like him. And it will be because of this: finding a way to deliver clean energy and allowing the world to become sustainable. It will be an incredibly important thing that will be rewarded by the markets.”
The billionaire investor thinks that Tesla stock still has the potential to double, or even triple, in the years ahead and is confused as to why investors don’t see the bigger picture.
“I cannot understand why people are so focused on selling things that work,” he says, referring to traders who look for short term market gains. “Let’s say I owned a billion dollars of Tesla stock. If I sold it, I’d have a billion-dollar problem — what would I do next with all that money? Why not pay to stay with people who know what they’re doing? Musk is a guy who has shown himself to be one of the most important entrepreneurs in the world, so why bet against him? Instead, get behind people who have powerful characters, who know what they’re doing, and who aren’t going to bend to short term profits. Then, drive that train for 10 to 20 years to make the world a better place.”
Palihapitiya’s friend Bill Gurley, one of technology’s top dealmakers, has a phrase he often uses: “When the music’s on, you gotta dance.” Palihapitiya believes the music is now playing. “Today’s visionary entrepreneurs are dancing, they’re in rhythm and flow. Let them do their thing and get behind them — don’t sell a share, just let them create more value for you.”