Elon Musk’s Boring Company aims to alleviate congestion, avoid traffic jams, solve today’s transportation problems.
The Boring Company: Company Profile
The Boring Company is Musk’s urban transportation dream. Let’s dive into The Boring Company and understand if you can buy The Boring Company stock.
What is The Boring Company?
The Boring Company, one of the private companies founded by Elon Musk, specializes in infrastructure and tunnel construction. It also aims to reduce tunneling costs by making smaller tunnels that are fast to dig and creating its own high-power boring machines. The Boring Company plans to build a large network of safe, transportation, utility and freight underground tunnels.
Elon Musk’s vision
The announcement of The Boring Company started with a tweet from Elon Musk in 2016. Musk, fed up with LA’s soul destroying traffic, said he would build a tunnel boring machine and start digging. If we had to choose between flying cars or tunnels, tunnels are going to be safer and weatherproof, unlike flying cars.
Musk’s rationale was that there are miles and miles of unused earth below roadways, which could be leveraged to solve traffic problems.
Musk is a talented entrepreneur, no doubt, and has gained a fair bit of notoriety on Twitter. The Boring Company proposes to create a high-speed, low cost transportation system to bypass ground-level congestion, basically, an underground tunnel that’s supposed to get you from point A to point B.
In May 2017, Elon Musk published a tweet about the tunnel boring machine he’d invented. Soon after, he added that The Boring Company would use the technology to build an underground tunnel.
At the launch, the company asked people to send in their ideas, and it was using a blog as an outreach. In August 2017, The Boring Company released a concept video.
How will The Boring Company transportation work?
Musk’s vision for The Boring Company is simple. He envisions customers buying a parking spot for The Boring Company, then riding a Tesla, a high-speed tunnel transport car, and having a wide range of transportation options. Tesla’s Model X will also be the first vehicle in the system.
Musk’s dream is quite a stretch. But the company’s aspirations to fix urban traffic problems and replace the auto industry are pretty feasible. The Boring Company is aiming to build the Hyperloop and a tunnel-based high-speed transport system.
What is the Hyperloop?
Hyperloop is a high-speed train travel concept. Hyperloop One, the leader in developing a Hyperloop transportation system, had launched the Hyperloop Pod Competition allowing university students to test their designs on a Hyperloop track at their home campus.
The top team won a trip to Hyperloop One to demonstrate their pods in an actual Hyperloop track. The contest allowed students to set their Hyperloop pod to 550 mph and ultimately reach 760 mph.
The Boring Company’s Projects
The Boring Company opened its first completed underground test tunnel section in Hawthorne, California, in December 2018. When the company completed the tunnel, its valuation shot up to $1.6 billion.
The Las Vegas Convention Center Loop is The Boring Co.’s first completed commercial project. The company has constructed twin .8-mile tunnels that will initially use chauffeured Tesla vehicles to help event visitors move around the convention center campus.
At the opening of the tunnel, a few people were able to hitch a ride in Tesla’s electric sedan at a speed of 35 mph, a far cry from the promised 150 mph speeds.
The Boring Company’s Business Model and Profitability
The company is seeking to fund its activities through a concept called “congestion pricing.” This is where city governments will pass laws where residents have to pay a fee to use certain roads.
Such is the case in London, which charges £10.60 (approximately $13.60) to drive into central London during peak traffic times.
Just imagine what Musk could do with a fraction of London’s traffic, and it’s easy to see the impact this would have on the company’s profits. Congestion pricing in London is now considered a success, which shows that Musk can make the wheels of business turn with ease.
But as brilliant as Musk is, we have to remember that he is a man with little experience i n the field of tunnel boring. He’s no expert, but he is learning more every day through his ventures with The Boring Company, however, Musk has made it clear that he wants to start this company slowly.
The best thing about his approach is that it can’t be labeled as a failure or success because so far the businessn the field of transportation, which is, of course, a capital-intensive business.
Musk has said the tunnel network would be an alternative to the freeway, and the idea would “open up the possibility of a new city being formed in the middle of LA.”
Can You Invest In The Boring Company?
The Boring Company is not publicly traded and is more of a concept right now, and like all new ideas, it needs a little boost from investors to grow. But it is a fantastic concept and may solve many problems in the urban transportation scene.
Musk is also known to invest in projects with his own money so it might be beneficial if you invested. However, most of Musk’s ventures are not geared toward investors and instead focus on making a difference in people’s lives.
The future of transportation is still a topic of debate, but Musk’s intentions are to modernize the idea and make a difference to urban population centers.
Could it be a market opportunity for long-term investors in the future? Maybe.
That said, investors can’t buy stock in the company right now. The Boring Company was formed as a subsidiary of SpaceX, and it became a separate and fully independent company in 2018.
Tesla revealed in an SEC filing that it works with his businesses SpaceX and The Boring Company. SpaceX paid Tesla about $5 million for various services and purchases of car components in 2020 and about $2 million worth of components in the first quarter of 2021. It’s fair to say that Musk and the SEC haven’t exactly been friends.
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Is The Boring Company Stock publicly traded?
No, the company is privately owned, with Elon Musk being the primary shareholder, owning a majority of the equity. The Boring Company investors include early employees of SpaceX and venture capital firms, including Vy Capital, Craft Ventures, 8VC, Future Ventures, and Gigafund, own the rest. The company raised a total of $233M in venture capital funding over 2 rounds, with the latest funding raised on July, 2019.
The Boring Company Stock Price
The Boring Company is not publicly traded so the Boring Company Stock Price is $0.
Is Investing in The Boring Company Risky?
Investing in The Boring Company stock is definitely risky for retail investors. We don’t have access to the financial statements of The Boring Company, so we can’t gauge profitability yet.
They could be raking in the green, but it is impossible to say for sure.
We’ve seen Musk make bold promises before, only to fall way behind schedule. That said, the concept of a tunnel network in major cities is brilliant and could probably bankroll itself over time once it becomes operational and profitable.
Some of the recent transport solutions suggest that Musk is getting closer to achieving his goals, which can only mean that investors will be looking for him to deliver more of the same.
The Boring Company may have a rather exciting idea for the future of transport. While this may sound exciting for a commuter, investing in The Boring Company stock may not be the most lucrative investment opportunity.
If we look at the other businesses and sectors Musk is involved with, investors would be making quite a risky investment in The Boring Company.
With an estimated current valuation of $1 billion, The Boring Company is considerably less valuable than most of Musk’s other ventures. With a similar capital structure as Tesla, the IPO price could be $25.
The Boring Company IPO: Will The Boring Company go public?
Given that Elon Musk has many commitments with Tesla and SpaceX, he might decide to focus on those two companies. Taking into account his vision of building a transport system of the future, his primary focus might be on The Boring Company.
It is not clear if Musk plans to take The Boring Company public or sell it. However, it’s possible that he takes one step at a time and decides how best to finance his projects.
He might need more capital investment for Hyperloop and a tunnel-based transport system. So he might consider going public with The Boring Company in the near future.
Elon Musk is also open to taking on investors, but it’s not clear if his vision of an underground travel network can produce significant revenue for investors in the short term.
Again, since he has many commitments, he might not want to take The Boring Company public in the near future. There is no set Boring Company IPO date.
Future of The Boring Company
The Boring Company has many challenges it has to face. The tunnels are exorbitantly expensive, costing $1 billion per mile to build.
If the company wants to make its mission of solving traffic problems a reality, it would need to bring this down to at least a tenth of the current costs.
However, the Boring Company may have a way to get around local governments in the United States and the world.
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The Boring Company has made its case for constructing a network of tunnels in order to provide commuters with an alternative mode of transport around congested cities such as Los Angeles and Chicago.
However, we do not know how they plan to make this a reality, and whether the cost saving and time boosting benefits will be enough to convince commuters to use The Boring Company’s transport system.
In addition, we don’t have access to their financial statements, so it is unclear how the company is doing in terms of profit and revenue.
Additionally, with Elon Musk having many commitments already, it might be some time before The Boring Company stock is publicly traded.
Although traveling underground in a Model 3 Tesla is not exactly the future of transportation, other than helping Musk sell more Telsas, let’s wait and see if there will be more remarkable features in future.
If the company becomes public, you can then invest in The Boring Company Stock.