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A recent Tesla share price increase pushed Elon Musk past Jeff Bezos to make him the richest person in the world, according to a ranking of the world’s wealthiest people on the Bloomberg Billionaires Index. Musk’s net worth, which according to Bloomberg reached the highest ever recorded for an individual at $208 billion on Friday, can be attributed to Tesla’s share price increases over the last year, but Musk’s involvement with Paypal and SpaceX helped pave the way to his current financial status. Tesla’s market capitalization has been drastically rising since the beginning of last year. Since January of 2020, Tesla stock has risen from $80 billion to over $800 billion and, while much of Musk’s fortune is due to the rising Tesla share price, he also scored big in his collaboration with PayPal and SpaceX.
Elon Musk was born in 1971 in South Africa and spent his youth reading books and studying computers. He is the eldest of three children and currently a citizen of three countries, including Canada and the United States. In 1995, Musk moved to Silicon Valley where he registered in a Ph.D. program at Stanford University. Musk and his younger brother decided to create a startup an online directory equipped with maps called Zip2. In 1999, the brothers sold Zip2 for $307 million to Compaq. Then, on his own, Musk formed an online financial service company called X.com, which would merge in 2000 with a company called Confinity to become PayPal.
In 2002, eBay bought PayPal for $1.5 billion worth of eBay shares. Since Musk was the largest shareholder in PayPal, over 11 percent of its equity, he suddenly held $165 million worth of eBay stock. Ever the serial entrepreneur, Musk founded SpaceX in 2002 with the intention of building spacecraft for commercial space travel. Musk believes that mankind’s long-term survival is at risk if limited to only one planet and his ultimate goal is Mars colonization. With no training in aeronautical engineering, Musk was still able to create and lead a team of rocket scientists at SpaceX, taking the company to the level of NASA. In 2008, a well-established SpaceX was contracted by NASA to transport cargo to the International Space Station. It is difficult to value SpaceX due to its unique technology and because it is not publicly traded, but Morgan Stanley values the company at over $100 billion.
Elon Musk: Roadsters, Satellites, & Surging Stock
Much of SpaceX’s value comes from its Starlink satellites, in which the company received permission from the United States government to launch for the purpose of providing internet service. Starlink boosts competition in heavily populated areas typically dominated by one or two providers and makes broadband service more accessible in rural areas. The Starlink satellite program alone is worth over $40 billion and it’s estimated that, by 2040, Starlink will reach an annual cash flow of up to $24 billion.
Musk has long been associated with the Tesla brand, but he didn’t join the company until 2004 when he invested $30 million into it and became chairman of the board of directors. Despite launching the Roadster, the company’s first consumer product, in 2008, Tesla faced serious financial difficulties. With less than $10 million in cash on hand, 10 percent of the company was sold to Daimler and a loan from the Department of Energy for $465 million also helped it to survive. When Tesla went public in 2010, it opened on the NASDAQ at $17 per share and raised $226 million through its IPO. After tough losses in 2019, Tesla rebounded strongly in 2020 with 500,000 vehicle deliveries helping stock prices to surge and driving Musk to the status of the world’s richest man.
Sources: Biography, Forbes, Tesla
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