Elon Musk: Risk, Ruin, and the Relentless Pursuit of the Impossible (Part 2)
How Many Times Has Elon Musk Nearly Gone Bankrupt?
The Risk, the Collapse, and the Resilience Behind His Three Near-Failures
Introduction
Elon Musk is among the world's wealthiest individuals, but his path to the top was anything but stable. He has faced the real prospect of bankruptcy three distinct times—each driven by extraordinary risk-taking, intense market pressure, and the singular conviction that his vision was worth everything.
This is a look at the moments Musk came closest to losing it all and what each one tells us about his approach to business, capital, and survival.
Crisis #1: The 2008 Financial Meltdown
By far the closest Musk ever came to personal and professional financial collapse was in 2008. Tesla was burning through cash at an unsustainable rate, and SpaceX had just suffered its third consecutive rocket launch failure. Musk had already poured nearly all his PayPal proceeds—over $100 million—into these two ventures.
At the end of that year, Tesla had just $9 million in the bank and was only days away from running out of money. SpaceX was similarly on the verge of collapse after burning through its initial funding. Musk himself was so cash-poor that he was borrowing money from friends to pay personal expenses, including rent.
The turnaround came in a matter of days through a series of near-miraculous events. A last-minute financing round, led by existing investors, saved Tesla from immediate bankruptcy. SpaceX's fourth launch of the Falcon 1 rocket finally succeeded after three failures. NASA then awarded SpaceX a $1.6 billion contract for cargo resupply missions to the International Space Station.
Without this convergence of events in late 2008, Musk has stated he would have lost both companies and gone personally bankrupt.
Crisis #2: Tesla's "Production Hell" (2017-2019)
Between 2017 and 2019, Tesla again teetered on the edge of financial collapse. As the company struggled to scale Model 3 production from prototype to mass manufacturing, cash losses mounted while short-sellers aggressively bet against the stock. Musk later revealed that Tesla was approximately three to six weeks away from bankruptcy at the height of what he called "production hell."
The operational stress was visible. Musk was sleeping in the Tesla factory, surviving on minimal sleep and high amounts of caffeine. Production targets were missed repeatedly, leading to questions about the company's viability. Yet Musk refused to accept outside investment terms that would dilute his control or compromise the company's long-term vision.
The breakthrough came through relentless operational focus. Tesla finally achieved consistent Model 3 production rates, moving from 5,000 cars per week to sustainable profitability. The company has been consistently profitable on an annual basis since 2020.
Crisis #3: The Twitter Acquisition Leverage Risk (2022)
In 2022, Musk acquired Twitter for $44 billion in a highly leveraged transaction that created unprecedented financial pressure across his entire business empire. While not a traditional bankruptcy scenario, the deal's structure introduced systemic risk to his wealth and control of other companies.
To finance the acquisition, Musk sold billions in Tesla stock, causing the share price to fall significantly and reducing his net worth by tens of billions. He also took on substantial personal debt obligations tied to the transaction. Financial institutions and investors grew concerned about potential conflicts between his Twitter ownership and Tesla leadership responsibilities.
The acquisition required Musk to pledge additional Tesla shares as collateral, creating a scenario where further Tesla stock declines could potentially force asset sales or threaten his control of the electric vehicle company. While Musk has stated he currently holds minimal personal loans against Tesla stock, the Twitter deal demonstrated how leverage can create cascading risks across a diversified business portfolio.
The situation stabilized as Twitter (rebranded as X) began generating revenue under new management structures, though the long-term financial impact of this highly leveraged acquisition continues to influence Musk's overall financial positioning.
The Lessons from Near-Bankruptcy
Total count: Three major financial crises
1. 2008: Tesla and SpaceX simultaneous collapse
2. 2017-2019: Tesla production scaling crisis
3. 2022: Twitter acquisition leverage risk
Each crisis followed a similar pattern: aggressive capital deployment, market skepticism, operational challenges, and ultimate resolution through breakthrough performance rather than conservative financial management.
Conclusion: Proximity to Failure as Strategy
Elon Musk has operated closer to the financial edge than virtually any other entrepreneur of his stature. But for Musk, proximity to failure is not a flaw—it's part of the formula. He has repeatedly stated that if something is important enough, you do it even if the odds are against you.
His track record demonstrates that being near bankruptcy is not always a sign of weakness. Sometimes, it is the price of transformation.
The question for other entrepreneurs and investors: How close to the edge are you willing to operate for the chance to create something truly transformative?
How do you balance prudent risk management with breakthrough innovation in your own ventures?
About the Author
Paul Scribner is the CEO of Raven Resources Corp. and General Holdings Limited. He leads investment and development initiatives across sectors including industrial services, infrastructure, real estate, and global consumer brands.
About General Holdings Limited
General Holdings Limited (GHL) is a diversified investment company focused on transformative opportunities across the Middle East, North America, and Europe. GHL pursues strategic partnerships, cross-border transactions, and innovative platforms in infrastructure, industrial services, consumer goods, and specialty finance.
About Raven Resources Corp.
Raven Resources Corp. is a Dallas-based management company building a vertically integrated SME operating platform. Through its subsidiaries, Raven acquires and scales resilient businesses in industrial services, infrastructure support, and real asset-backed sectors. The company is actively pursuing a public market strategy and long-term value creation through operating excellence and smart capital deployment.