Elon Musk, the chief executive of Tesla and SpaceX, is now the richest person in the world.
An increase in Tesla’s share price on Thursday pushed Mr. Musk past Jeff Bezos, the founder of Amazon, on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people.
Mr. Musk’s net worth was $195 billion by the end of trading on Thursday, $10 billion more than that of Mr. Bezos’s. Mr. Musk’s wealth has increased by more than $150 billion over the past 12 months, thanks to a rally in Tesla’s share price, which surged 743 percent in 2020. The carmaker’s shares rose nearly 8 percent on Thursday.
“How strange,” Mr. Musk said on Twitter. “Well, back to work,” he added.
Mr. Musk, a South African-born entrepreneur, would not have been able to edge out Mr. Bezos — who has held the title of the richest person in the world since Oct. 2017 — were it not for Mr. Bezos’ philanthropy, including his donation of $680 million worth of Amazon shares in November, as well as his divorce, which caused him to relinquish about 25 percent of his stock in the e-commerce giant to MacKenzie Scott, his ex-wife.
But the rally in Tesla’s stock price was also propelled by the company’s success last year. Tesla delivered nearly 500,000 cars in 2020 as sales rose 36 percent from the year before. The company reported profits in the last four quarters, and its stock was added to the S&P 500 index.
As his fortune continues to grow at an unprecedented rate, Elon Musk has now become the world’s richest person, officially overtaking Amazon AMZN -0.2% CEO Jeff Bezos.
Shares of Musk’s electric-vehicle maker Tesla TSLA +4.9% rose by another 8.2% as of 11:30 a.m. EST on Friday, pushing Musk’s net worth up by $12.5 billion, to $189.7 billion. That makes him the wealthiest person on the planet, according to Forbes’ estimates.
Despite a report from Bloomberg earlier this week claiming that Musk became the world’s richest person on Wednesday, by Forbes’ calculations, the Tesla chief didn’t officially take the number one spot until Friday morning. He’s now nearly $5 billion ahead of the former world’s number one, Jeff Bezos, who has a net worth of $185 billion as of 11:30 a.m EST.
Musk initially overtook Facebook FB -1.6% CEO Mark Zuckerberg (who is worth $96.9 billion today) to become the world’s fourth-richest person in early November, then surpassed Microsoft MSFT -0.2% cofounder Bill Gates (worth $122 billion today) for the number three spot. A month later, Musk leapfrogged over French luxury tycoon Bernard Arnault (worth $154.8 billion today) to become the world’s second-richest person.
Tesla’s billionaire CEO has added $165 billion to his fortune since March 2020, when he was worth $24.6 billion. Much of that increase is thanks to Tesla’s skyrocketing share price, which rose more than 720% in 2020. It has gained another 20% in the first week of 2021.
Arguably the world's most popular entrepreneur, Elon Musk, has now also become the world's richest one. With a total net worth of $188 billion and rising, Musk has now overtaken Amazon's CEO, Jeff Bezos, to become the wealthiest person in the world, according to the valuation by Bloomberg's Billionaire Index -- a list of the top 500 richest people in the world.
Interestingly, this is the first time since October 2017 that Bezos has been dethroned from his position at the top of this list. He now currently sits second at a net value of $187 billion. The founder of Amazon has seen his wealth fluctuate a little over the last few months owing to difficult market conditions.
Musk's move to the top of the list is also quite interesting as it follows close on the heels of him passing Bill Gates in November to become the second-richest person in the world. While most of the world has had a bad 2020, Musk personally saw his valuation soar in 2020 to the tune of more than $150 billion.
How Elon Musk reacted
Musk who is the founder of many innovative companies such as Tesla and SpaceX reacted rather strangely to going top of the Bloomberg Billionaire Index. Reacting to a tagged tweet from an account called "Tesla Owners of Silicon Valley" with the text "@elonmusk is now the richest person in the world at $190 billion", he simply said, "How Strange". But he didn't stop there, as he responded with another Tweet, "Well, back to work."
How Elon Musk became the richest person in the world
The primary reason behind Elon Musk's staggering growth in wealth is the rise in Tesla's shares which recently rallied 4.8 per cent to boost Musk's valuation beyond that of Bezos Bezos', net worth. As mentioned above, this surge has been one of the many that Tesla has seen this year, boosting Musk's overall net worth during the past 12 months by over $150 billion.
Tesla is really turning into a cash cow for Musk who has gained from the electric car maker's rise immensely. Musk currently holds 20 per cent stake in Tesla and over that also owns about $40 billion of unrealized paper gains on vested stock options.
It is also prudent to note that while Musk has become the richest person in the world, his wealth, much likes Bezos' is parked in stocks, which as we know are very volatile. Because of the nature of the instrument, this wealth is not easily transferable into real cash as Musk risks devaluing the company's stocks and by extension his wealth, if he attempts to sell a chunk of his owned shares on the market.