Elon Musk Pledges Priority For Tesla Loyalists In Future IPOs, But VC Vinod Khosla Wants Dividends First: 'Reward Long-Term Beliefs'

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Tech billionaire Elon Musk sparked a debate on Saturday with his promise to prioritize longtime shareholders of his companies, including Tesla, Inc. TSLA, if any of his private ventures go public.

What Happened: Musk, on social media platform X (formerly Twitter), stated, “I’ve mentioned something like this before, but, if any of my companies goes [sic] public, we will prioritize other longtime shareholders of my other companies, including Tesla.”

This sparked a response from venture capitalist Vinod Khosla, who believes Tesla’s existing long-term shareholders deserve dividends before rewards are extended to outsiders.

“For starters, I wish the holding period for capital gains was much longer. Reward long term beliefs. Company pays dividends based on holding period? … what else?” Khosla tweeted.

See Also: Everything You Need to Know About Tesla Stock

Why It Matters: Tesla currently doesn’t offer dividends, one of two such outliers among the “Magnificent Seven” companies.

Musk has a history of founding innovative companies. Some, like Tesla, are public, while others, like SpaceX and Neuralink, remain private.

SpaceX’s Starlink satellite internet project has been rumored for an IPO. In 2020, Musk hinted at prioritizing small retail investors during such an event.

Starlink reportedly achieved breakeven cash flow in November 2023, rekindling hopes for an IPO.

Musk’s OpenAI rival, xAI, last month secured $6 billion in a Series B funding round at a reported post-money valuation of $24 billion.

Incidentally, Khosla is known for his early investment in OpenAI, a company Musk co-founded in 2015 but later left due to differences.

Four years ago, Musk also seemed to think a Tesla investor’s suggestion to form a holding company called X, which would work as a parent company for Musk’s many ventures, was a “good idea.”

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