If you can get several tens of millions of dollars, liquid, on fairly short notice, there's almost nothing you can't buy on a whim. You may as well have infinite money. It doesn't matter that you can't liquidate another 90-99% of your net worth easily. You borrow $60m for that second yacht, then pay it off as soon as the tax situation looks favorable for realizing some gains. No big deal. Live like (er, better than) a king, pay taxes like a pauper. It's the American way.
Larger sums are only really useful for making big-splash investments. Like this. As far as personal spending goes, it's no obstacle, so it doesn't matter that they can't easily turn their entire net worth into a literal billions-of-dollars balance in a checking account.
Right, big-splash, chest-thumping investments are about the only thing that might be a problem. Not ordinary purchases. But that's not so much buying something, in the ordinary sense, as shifting investment strategy.
At least one reason it matters is the gigantic numbers poison public discussion of wealth. People commonly claim things like Musk can single-handedly end world hunger because he has enough net worth to buy everyone food for the next 20 years. That isn't true if there is no way for him to liquidate enough of that worth without destroying the worth in the process. What these people actually can do is give away equity shares to the poor, but you can't buy food with equity shares. Or, in Bezos case, since he owns Whole Foods, I guess he can just give away food.
Didn't he end up not helping at all after previously committing billions to it?
I feel like he's not obligated to do anything, but ignoring his commitment makes him a worse person, and there are probably amounts greater than zero which do not encounter the issue you describe
It seems to me like they did, they came up with a plan and everything.
Are we sure Elon isn't just claiming that he forever wants more detail, like a sealioning troll, because in actuality he wants the money for himself more, and never actually intended to make the donations he committed to? Occam's razor would suggest that is actually the case.
I mean, if we was serious about it, after he received the plan, did he ask for more detail on any of the items he didn't understand?
it's actually just a plan, not a 'so-called "plan"', whatever that means
>It doesn’t say how they’ll spend the money aside from allocations
the way the money will be spent, is by allocating money to the items that it will be spent on, which are detailed in the plan.
that seems good enough to start for me, but where did Elon ask for more info than that? I asked this in the previous post, but very conspicuously got no answer.
surely he didn't just _forget_ about _billions of dollars he committed to donate to charity?_
That's true but wealth at that level is essentially relative anyway.
There's little you can do as a billionaire that you couldn't do as a hundred-millionaire when it comes to simply buying things for liquid cash. You can buy all the houses, boats, private islands, etc. that you want.
The only meaningful difference in wealth at that scale is buying fundamentally scarce things: specific real estate and private islands, favors from politicians, private time with other powerful people. For all of those, you are competing with other wealthy people to win them, so it's relative wealth that matters.
I agree with your point in general, but I think you'd need to scale the two example numbers each up by an order of magnitude. A hundred-millionaire is definitely rich, but can't buy all the houses, boats, private islands, etc. that they want. A single property or a yacht can easily cost well into the tens of millions. Plus if you're living in a $10M+ home, your annual expenses are presumably significant, so you'd want to keep a fair amount to live off of.
It's probably ridiculous to most to think of hundred-millionaires being financially constrained, but I do think there's a material difference in the buying power of $100M and $1B without getting into unique goods.
> Most if not all of these people can't liquidate even close to their "net worth"
I think that's broadly true, though some of the older ones might be able to. Bill Gates, for example, has diversified his wealth out of Microsoft (and he doesn't control the company these days, anyway). I don't think the market would punish Berk or AutoNation, for example, nearly as hard as they've punished Tesla for Elon cutting his ownership stake.
It's not punishment. Stock price * shares != actual value of the company. As more shares go onto market, demand naturally decreases as supply satiates existing demand, thus causing the price to decrease. I'm sure this is covered in some basic economics course that I never took.
And yet we treat the market cap as the actual value of the company. Also, sometimes the actual value can be more—for instance if a buyer comes along who wants all of your company, to take it private.
It would be interesting if there were some way to calculate something like the "cash net worth" of individuals. Work out what they could actually reasonably expect to get if they liquidated all their assets. Obviously it would be a pretty rough estimate, but you'd definitely see some reshuffling of the richest people lists.
Call it what you will, I don't think it's just the economics of putting more shares on the market. When the CEO dumps ownership, he is signaling a lack of confidence.
What did Bill Gates signal when he diverted his Microsoft stock into the Bill Gates Foundation back when he was forced to step down as CEO after the antitrust lawsuit?
Not all sales are equal. Here you have a guy who essentially arrived at the end of the road and brought Microsoft where only Standard Oil arrived before.
Both had extinguished all their natural competitiors and had to be essentially stopped by the US Federal Govt.
Stark contrast with the CEO of a luxury automaker who inflated a financial bubble to enrich himself who is now selling to buy a social media platform.
The evidence against this is that tsla stock has gone up since musk said the deal was "on hold". This may be because the market expects him to not have to increase supply by selling more shares, but he's already trying to arrange outside funding to limit what he has to sell.
It could be that confidence in musk and his brand is having more of an impact on share price than supply and demand. He's behaving erratically and is clearly distracted from running tesla by this twitter fiasco. I'm not sure what weighs more on the minds of institutional investors.
Which is why it's not at all unexpected that the Twitter board after some hand-wringing jumped on the deal because even at a "loss" someone who offers to turn your illiquid assets into cash without tanking the value of those assets is literally the dream exit.
Except the Twitter board had almost no shares between them (Jack being the only exception). I recall reading that none of them even tweet, but that's neither here nor there.
Drug dealers are just middlemen though. Would you really trust the chemist that has never tried their own goods and has an overall disdain for drug usage.
Kind of stretching the analogy, but you hopefully get my point.
Most if not all of these people can't liquidate even close to their "net worth"