Some people may not be aware that Elon Musk was one of the founders, which would later become PayPal as we know it today. His company X.com, which was an online financial institution, merged with Confinity, a money-transfer service. So, does Elon Musk own PayPal?
No – he was CEO of the company until he was ousted in October of 2002. However, he remained the company’s largest shareholder, with 11.7% of PayPal’s shares. Exactly two years after being ousted as CEO, eBay acquired PayPal for $1.5 billion in stock.
Musk made up to $180 million from the sale, and his ties with PayPal were cut once the shares were sold. He may no longer own any part of PayPal, but the sale of his shares was a turning point in history.
Before PayPal
Musk had two previous, successful, ventures before becoming a co-founder of PayPal. His first was a joint venture with his brother Kimbal, in 1995. What started as a company that provided businesses with an internet presence, turned into a company that worked with newspapers to create online city guides.
In 1999, Zip2 was sold to Compaq Computers, who used it to enhance their AltaVista search engine. This was in the pre-Google days and AltaVista was the Google of the day.
Short Stint
Elon and Kimbal took their share of the money from the sale of Zip2 and started a company called X.com, which was an online bank. A year later X.com acquired Confinity, one of his major competitors. Confinity was a cryptography company and specialized in Palm Pilot payments.
There was some discourse in Silicon Valley, and PayPal at the time and Musk ended up being ousted from his position of CEO, after a couple of years.
Originally after the merger, the company kept the name X.com, but testing showed that customers found the name to be too vague, and some thought it had to do with pornography. So, it was decided that the name of Confinity’s main product would work, and changed the company name to PayPal Inc.
PayPal and eBay
After being ousted from the company as CEO, Musk remained the majority shareholder, owning 11.7% of the company’s shares. When eBay purchased PayPal in 2002, Musk made somewhere between $165 million and $180 million from his shares. The two companies would later go on to split in 2015.
The only relationship he’s had with the company since was in 2017 when he purchased the X.com domain from PayPal, as it held sentimental value.
Life After PayPal
Never one to sit still, after being ousted from PayPal, Musk immediately went to work after conceiving an idea of having a greenhouse on Mars and being able to grow food on the planet. In May of 2002, using $100 million of his own money, he bankrolled Space Exploration Technologies. Or, more commonly known as SpaceX.
The company’s mission is to be able to make space travel more affordable, allowing regular people to be able to experience it. Musk feels the best way to do this is to create rockets that can be reused, as previously rockets were a one and done product.
Without the time or capital that became available to him from leaving PayPal, he may never have started SpaceX. We could be several years behind from advancements such as landing non-manned rockets on a platform in the ocean, or a reliable way to quickly bring supplies to the Space Station, just to name a couple.
Shortly after starting up SpaceX he became a part of Tesla and is the longest-tenured CEO in the automobile industry. Again, if he hadn’t left PayPal, we could be years behind in technology when it comes to electric vehicles.
In addition to the two big companies, he’s also a part of several other companies and industries working on advancements for humankind. He doesn’t seem to be bothered by the fact that he doesn’t own PayPal.