From Netscape to Twitter... The Maverick Musk Who Presented a New Model of Investor Activism

Elon Musk [Photo by Reuters Yonhap News]

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[Asia Economy Reporter Hyunjin Jung] One day in 1995, Elon Musk, a young man from South Africa, submitted his resume to Netscape Communications, the first web browser. After graduating from the University of Pennsylvania and staying in California to pursue a master's degree at Stanford University, he decided to get a job, believing that the internet could change the world. However, he never received a single response from Netscape, and although he lingered on the first floor of the headquarters, he left without speaking to anyone.

Musk, who is now leading changes in the world by founding Tesla and SpaceX, decided to start a business at that time. The resume incident became a turning point for him to continue founding companies and investing. The key was that he invested the initial funds he earned in his twenties into new future businesses, continuously growing his capital.

According to The Wall Street Journal (WSJ) and CNN, Musk raised his first funds through entrepreneurship. During the height of the dot-com boom in 1996, he received $28,000 from his father and founded Zip2, an internet archive company that helped his younger brother Kimbal Musk transition media companies online. This company was sold in 1999 to Compaq Computer, a U.S. personal computer company, and Musk acquired $22 million at the age of 27.

Afterward, Musk spent $10 million on purchasing a McLaren sports car and invested the remainder in his next startup, an online banking service company called X.com. This company was acquired in 2000 by Confinity, which later became known as PayPal. In 2002, when eBay acquired PayPal, Musk, the largest shareholder, secured over $100 million at the age of 31.

From this point, Musk’s eccentric path began in earnest. His next focus immediately turned to space. In 2002, he founded Space Exploration Technologies, now known as SpaceX. At that time, SpaceX faced bankruptcy as its initial launch attempts failed three times. However, the fourth launch succeeded dramatically, earning recognition for its technology and potential. SpaceX recorded a corporate valuation of $100 billion last year and is collaborating with NASA.

In 2004, Musk joined as an early investor in Tesla, which was founded the previous year. When Tesla went public in 2010, Musk’s net worth approached $300 billion. Since then, he has established Neuralink, The Boring Company, and expanded his interests to cryptocurrencies.

Having acquired Twitter, Musk is now expected to bring changes to the mergers and acquisitions (M&A) market. Patrick Jenkins, Deputy Editor of the Financial Times (FT), evaluated this acquisition by saying, "Elon Musk has created a new model of activist investing." He viewed the Twitter acquisition process itself as highlighting how underperforming companies are vulnerable to pressure from such activist investors. With inflation rising and interest rates increasing, the stock market is struggling, giving investors more incentive to intervene actively to prevent stock price declines. He predicted that there will be more active involvement from these investors in the future.

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