Ali Hasan
We recently wrote a blog about how Elon Musk could be the richest person in the world in the near future and our prediction came true. He has officially become the richest person in the world with a net worth of $188.5 billion.
This happened at 10:15 am in New York when his net worth was officially $1.5 billion more than Jeff Bezos’s net worth. A 4.8% rally in Tesla’s share price on Thursday boosted Musk past Jeff Bezos on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people.
Although his total net worth isn’t a surprising number by any means as in the past when Jeff Bezos was the richest person in the world, he had once crossed a net worth of more than $200 billion. In fact, he became the 1st person in the world to cross the $200 billion mark.
But, in reality it doesn’t matter whether its 188 or 200 billion as most of the wealth of these billionaire entrepreneurs are tied to a stock which means that they don’t have the same amount of wealth in cash. It’s almost 80-90% stock holdings.
But, what’s really extraordinary in Elon’s case is that he has achieved this in 12 months. Over the past year his net worth soared by more than $150 billion in possibly the fastest bout of wealth creation in history. Fueling 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.
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 unrealized 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.
Elon Musk is among the few people who had a spectacular 2020 and looks like 2021 will be the same for him. On the other hand, many investors think that the Tesla stock could soon come crashing down and this will result in lowering of his net worth.
When more and more automobile brands start manufacturing Electric Vehicles, Tesla will face a tough time as they will have to compete with everyone and could lose some market share to other manufacturers.
Only time will tell what will actually happen in the future.
