Matt Levine, Columnist

Elon Musk's Flamethrower Stunt Feels Like an ICO

His sold-out $500 fire hazards operate mainly through clever internet hype, much like initial coin offerings.

February 2, 2018 at 7:00 AM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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I haven't followed Elon Musk's flamethrower-selling stunt closely, but I gather that the gist of it is that he got some flamethrowers, peddled them on the internet for $500 each, and will use the money to fund the operations of The Boring Company, the company he started to (1) drill tunnels or something and (2) conduct hilarious pranks. And it worked: "Elon Musk Stops Taking Flamethrower Orders After $10 Million in Sales," congrats everyone. The Boring Company is not a public company, so I do not expect to follow up in six months with a story about a securities fraud investigation over its failure to disclose to investors that the flamethrowers could light people on fire.

But it is an interesting experiment in corporate finance, no? The proceeds from the flamethrowers "will help bankroll the boring machines, lawyers and lobbyists Musk is relying on to execute his plan to build tunnels under parts of Los Angeles and the Baltimore-Washington Parkway." It is a way to fund the future operations of a startup that: