No, Elon Doesn’t Live in a Boxabl.

Boxabl's Casita (from their Facebook page)

​No, Elon Doesn’t Live in a Boxabl.
Investors Ask Natalie.
 
While I was on holiday/sustainability research in England last week, a new acquaintance asked me about investing in Boxabl. She was very excited about the opportunity based upon Elon Musk living in a Boxabl casita. She told me that the U.S. government had purchased hundreds of them. I’ve been a fan of prefab housing for quite a while. I was so impressed with the first platinum LEED rated home in the US, which was a prefab Living Home (now Plant Prefab), that I used to offer tours of it. It was the first I’d heard of Boxabl, so I decided to do a little digging.
 
The first thing I turned up was this Elon Musk tweet.

​No, Elon doesn’t live in a Boxabl, although he does have a prototype (which he might have been given). Elon lives in a competitor’s tiny home, which he claims he purchased for less money than the Boxabl costs. If you look in the fine print of the posts by Boxabl, you’ll see a disclaimer, “Elon Musk is not affiliated with Boxabl and has not endorsed the Boxabl securities offering.” However, it’s easy to get excited about a YOLO* investment, when you see 5 posts of Elon and one of Kanye West on Boxabl’s Instagram. (Who reads the fine print?)
 
Boxabl Gets an A in Marketing
Boxable has done a number of things right, mostly in its marketing. Getting Elon Musk to accept a prototype is quite an achievement.
 
The idea behind the design is cool, until you stop to consider just how small 375 square feet is, and just how expensive shipping costs of $10/mile from Vegas can be. As one Reddit user wrote, “I’m clueless on everything that would go into this, but I have lived in a 375 square foot apartment, and I must say it sucks ass.” (The factory-made LivingHome was about 2400 square feet – a real beauty.) There are no posted reviews (or pictures) from anyone who actually lives in a Boxabl casita because the company hasn’t received regulatory approval to sell to the general public yet (according to an email sent to me by Boxabl on Sept. 20, 2022).
 
Millennials are starting families. The real estate trend has been toward the purchase of larger homes and multigenerational housing. Although in theory a small dwelling should be more affordable, there is still the problem of the high cost of land. Cheap, tiny homes have been around for decades and haven’t really taken off.
 
Should We Invest?
While the hype is intoxicating, there are lots of red flags about investing in this company. It’s important to remember that even a good company with a popular product doesn’t always pay off for investors. Beyond Meat investors loved the company at $200 a share. It’s not as popular today at $16. Sometimes, big companies (like D.R. Horton) bet on unicorns that never get out of the gate (like WeWork). Great companies always start with a popular product (something that is still unproven at Boxabl), and a team that can deliver, while making a profit.
 
So What Are the Red Flags?
 
One of the biggest red flags is that I have sent multiple emails asking for a profit and loss statement, and I still haven’t received it. Investors are buying in without knowing how much money goes into the founders’ bank accounts versus operations, how much cash has already been burned through, and with no say or oversight in the matter. 100% of the voting is held by Paolo Tiramani (74%) and  Galiano Tiramani (26%). Additionally, Galiano has a history of serial startups – the last being a cryptocurrency exchange that ended in March of 2019 (red flag).
 
The Focus is on Investing, Much More Than Orders
On the home page, there’s a large tab to click and invest. After my search for Boxabl began, I started seeing ads everywhere luring me to invest.

Crowdfunding & Private Equity
Crowdfunding and private equity often fly under the SEC radar, so investors must do 10 times the due diligence. The marketing pitch deck makes no mention of a pathway to profitability. Homebuilding is a low margin business, so it’s important to understand how Boxabl is going to compete and stay in business.
 
More Red Flags
In addition to the troubled entrepreneurial track record and lack of financials and business plan, which would be reason enough to avoid investing, note the following concerns.
 

• Only 3 board members, and not one has any prior homebuilding experience.
• Family board. (The board is Paolo, Galliano and their 74-year-old CPA.)
• Inexperienced executive team. (Founder/director of engineering was in college just a few years ago. His only jobs have been with Paolo Tiramani).
• No financials provided.
• Illiquidity. (Who will buy your shares for more than you paid? Bear markets tend to squash IPOs.)
• Franchise model.
• Do people really want to live in a little box?

 
 
Bottom Line
Boxabl is excelling at the hype game. Whether the company can build, deliver and make money by selling affordable, tiny homes is not clear yet. Beyond that, whenever you have a family business bringing in beaucoup investment dollars with no oversight or accountability, that often turns out very badly for the undiscerning wallet holders, and very well, in the near term, for the people who can put their hand in the cash kitty without anyone slapping it away.
 
 
*You only live once.


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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

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