Elon Musk, the outspoken South African-born entrepreneur behind Tesla and SpaceX, is now the richest person on the planet.
A 4.8% rally in the electric car maker’s share price on Thursday boosted Musk past Amazon.com founder Jeff Bezos on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people.
The engineer’s net worth was US$188.5-billion (R2.9-trillion) at 10.15am in New York, $1.5-billion more than Bezos, who has held the top spot since October 2017. As CEO of SpaceX, Musk is also a rival to Bezos, owner of Blue Origin, in the private space race.
The milestone caps an extraordinary 12 months for Musk. Over the past year his net worth soared by more than $150-billion in possibly the fastest bout of wealth creation in history. Fuelling his rise was an unprecedented rally in Tesla’s share price, which surged 743% last year on the back of consistent profits, inclusion in the S&P 500 Index and enthusiasm from Wall Street and retail investors alike.
The jump in Tesla’s stock price further inflates a valuation light years apart from other automakers on numerous metrics. Tesla produced just over half a million cars last year, a fraction of the output of Ford and General Motors. The company is poised for further near-term gains as US Democrats captured both Georgia senate seats and handed control of the US congress to the party that’s advocated for quicker adoption of electric vehicles.
Musk, 49, has benefited from Tesla’s stratospheric rise in more than one way. In addition to his 20% stake in the automaker, he’s sitting on about $42-billion of unrealised paper gains on vested stock options. Those securities come from two grants he received in 2012 and 2018, the latter of which was the largest pay deal ever struck between a CEO and a corporate board.
Despite his astronomical gains, Musk has said he has little interest in material things and has few assets outside his stakes in Tesla and SpaceX. He told Axel Springer in an interview last month that the main purpose of his wealth is to accelerate humanity’s evolution into a spacefaring civilisation.
“I want to be able to contribute as much as possible to the city on Mars,” Musk said. “That means just a lot of capital.”
The world’s 500 richest people added a record $1.8-trillion to their combined net worth last year, equivalent to a 31% increase. The gains were disproportionately at the top, where five individuals hold fortunes in excess of $100-billion and another 20 are worth at least $50-billion.
Less than a week into the new year the rankings have already been upended by extraordinary rallies. China’s Zhong Shanshan has vaulted past Warren Buffett to claim the sixth slot after shares of his bottled water company surged, adding $15.2-billion to his fortune. — Reported by Devon Pendleton and Dana Hull, (c) 2020 Bloomberg LP