A private company is worth exactly what the last person to write a check says it is worth, which is a fine system right up until you try to use the number for anything.
The Round
Elon Musk’s tunneling startup, the Boring Company, is in talks to raise new funding that would value it at around $20 billion, according to people familiar with the discussions. The company is in talks to raise around $4 billion, some of the people said; the round hasn’t closed and the terms could change. Boring was valued at around $5.7 billion after a 2022 funding round that raised $675 million from investors including Vy Capital, Sequoia Capital and Founders Fund.
The company builds tunnel boring machines that it claims can dig underground more cheaply than traditional construction companies. It spun off from SpaceX in 2018 and owns a transportation network under the Las Vegas Strip in which drivers ferry passengers in Teslas to and from the convention center. It has pitched privately funded projects in cities including Baltimore, Chicago and Los Angeles, where it stood to make money from ticketed passengers — and many of those haven’t panned out. It is privately funding a new loop in Nashville, and in February announced a Dubai loop whose first four-mile phase would cost $154 million.
What the Mark Actually Measures
Many private-market investors see investments in Musk’s companies as sure bets and pay premiums for access to his portfolio. Investors who backed the $44 billion Twitter takeover were underwater for months, then made money after the billionaire rolled the company into his AI startup xAI and later folded that entity into SpaceX. SpaceX went public in June in a record-setting IPO that raised $86 billion; its market cap nearly doubled in the days after the offering before the shares fell around 50% from their peak.
That last clause is the whole lesson. Valuations of Musk’s public companies have tumbled in recent days: Tesla shares fell 15% in a single session, erasing $215 billion in market value, after the electric-vehicle maker missed earnings targets and reported negative cash flow for the first time in two years. A private mark that rises more than threefold in four years while the public comparables swing by a fifth in a day is not telling you about a tunneling business. It is telling you about the supply of late-stage capital.
No trade — there is nothing here to trade, which is the point. Private-market marks are a sentiment gauge, not a valuation, and the read-through is that late-stage capital remains abundant for anything adjacent to one particular surname.
Action: none. We do not buy pre-IPO access vehicles or the funds that promise it, and a mark-up on an unlisted infrastructure story does not change that. When the tunnel business has audited cash flows and a listing, it becomes a company we can have an opinion about.
- Private · The Boring Company · not listed, no position
- TSLA · Tesla · public comparable, index exposure only