Elon Musk becomes the world’s richest person
A year ago we would never have seen this coming, but Elon Musk has officially surpassed Jeff Bezos to become the world’s richest person, with an astonishing estimated $195 million net worth.
This comes after Tesla Inc. has had a highly successful year, with share price climbing higher and higher throughout 2020. The electric-automaker’s shares peaked 7.9%, boosting Musk past Amazon.com Inc. founder Jeff Bezos on the Bloomberg Billionaires Index, which ranks the world’s 500 wealthiest people. Musk is worth $194.8 billion, or $9.5 billion more than Bezos, who owns Blue Origin, the rival to Musk’s Space Exploration Technologies Ltd., or SpaceX, in the private space race.
Not many people have occupied the position of richest person in the world in recent years, however it is not surprising as a dramatic change in stocks has turned the world upside down as of late.
Musk has seen the most dramatic change of all, of course. The engineer, born in South Africa, has accumulated over $165 billion over the past year, in what is probably the world’s speediest wealth creation in history. What caused this sudden rise is an unexpected raise in Tesla’s share price, surging 743% only during the last year thanks to consistent profits, inclusion in the S&P 500 Index and enthusiasm from both Wall Street and retail investors. The shares have gained more than 23,900% since its 2010 initial public offering, including a 5-for-1 stock split last year.
Tesla manufactured just over half a million cars during 2020, which is a fraction of what Ford Motor Co. and General Motors Co did. The jump in its stock price therefore further inflates a valuation light years apart from other automakers in various criteria.
Tesla’s current market value stands at $773.5 billion, which is much larger than that of Facebook. Larry Ellison’s 2% stake in Tesla is enough to place Elon Musk in the world’s richest 175 people alone. If we include Ellison’s Oracle shares, Musk is ranked 10th.
Musk’s rise is even more surprising considering his many scandals and mess-ups in the last few years, mostly originating by his spontaneous tweets. In 2018, he agreed to pay a $20 million fine to the Securities and Exchange Commission and resign as chairman of Tesla after tweeting a notion to take the company private at $420 a share, with “funding secured”, which is something he actually never did.
Musk has claimed on several occasions that he is “cash poor.” The majority of his net worth is linked to equity of his companies, including Tesla (which pays no dividends) and closely held SpaceX and the Boring Company, a tunneling venture. He has confessed to not have any interest in the materialism that comes with wealth.
Last year, he tweeted about his wish to sell almost all of his physical possessions, including houses. He said to German publisher Axel Springer in a December interview that the main purpose of his wealth is to accelerate humanity’s evolution into a spacefaring civilization.
After the news of his new status broke out on Thursday, Musk tweeted “How strange” then said “Well, back to work.”
He has followed up with at least one trend among the super-rich. He confirmed last month he had relocated from California to Texas, a state that has become popular among the wealthy for levying zero income tax.
Had it not been for his divorce, Bezos would still lead on Musk, even with Tesla’s major rise. The divorce saw Bezos transfer a quarter of the family Amazon stake to his ex-wife, MacKenzie Scott, and his philanthropy. He donated shares worth about $680 million in November.