Musk suggests Buffett buy Tesla stock, reveals Berkshire could have bought cheap in 2008

Warren Buffett.
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Warren Buffett’s Berkshire Hathaway should invest some of its excess cash in Tesla, Elon Musk said.
Charlie Munger had the chance to buy into Tesla at a $200 million valuation in 2008, Musk said.
Munger could have made 3,000 to 6,000 times his money, as Tesla is worth over $600 billion today.

Elon Musk has suggested Warren Buffett should buy Tesla stock, and revealed Charlie Munger had the chance to invest in the automaker at less than 0.1% of its current valuation.

Twitter user @gurgavin posted on Saturday that Buffett and Munger’s Berkshire Hathaway had over $128 billion in cash at the end of 2022, and asked which stocks the conglomerate should spend its money on.

“Starts with a T …” Musk replied.

“Munger could’ve invested in Tesla at ~$200M valuation when I had lunch with him in late 2008,” he added.

Musk’s tweet suggests that Munger — Buffett’s 99-year-old business partner and Berkshire’s vice-chairman — could have bought, say, 5% of Tesla for a measly $10 million in 2008.

Tesla went public two years later, securing a roughly $2 billion valuation. Its market capitalization skyrocketed during the pandemic, peaking at over $1.2 trillion in November 2021. The electric-vehicle company was still worth $617 billion as of Friday’s close.

Assuming Munger invested in 2008 and never sold any shares (and ignoring any dilution), he would have made 10 times his money on paper by the time of Tesla’s IPO. Moreover, his 5% stake would have briefly been worth $60 billion in November 2021 — 6,000 times his initial investment, and approaching 10% of Berkshire’s entire market capitalization and 60% of Buffett’s net worth.

While Tesla stock has roughly halved since then, Munger’s hypothetical position would still be worth about $31 billion today, or more than 3,000 times his original wager.

In reality, Munger declined to bet on Tesla in 2008, and instead spearheaded Berkshire’s $232 million investment in BYD that year. Berkshire’s stake in the Chinese EV maker and Tesla rival ballooned in value to over $7 billion by early 2021, and the company has cashed in well over $1 billion of BYD stock in recent months.

Munger and Buffett have never publicly invested in Tesla, but both men have weighed in on Musk and his car company.

Munger, 99, recently described Musk as a “very talented man but also peculiar,” and said he neither invests nor bets against the executive’s companies. He’s also underscored Musk’s positive contributions to civilization, and labeled Tesla’s survival in the brutally competitive automotive industry a “minor miracle.”

Buffett has also hailed Musk and Tesla’s unlikely success. While Musk has noted he isn’t the investor’s biggest fan and considers running Berkshire to be a pretty boring job, he’s also acknowledged Buffett’s skill and valuable role in the US economy.

It seems unlikely that Buffett and Munger will invest in Tesla anytime soon, given they own a chunk of a rival automaker, and have shied away from aggressively valued technology companies in the past. But Musk would clearly welcome their vote of confidence, and seems happy to give Munger a second chance to buy his stock.