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How Elon Musk became the world’s second-richest person

Jessica Yun
·2-min read
Tesla CEO Elon Musk laughs as he talks to media as he arrives to visit the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin. - Tesla builds a compound at the site in Gruenheide in Brandenburg for its first European "Gigafactory" near Berlin. (Photo by Odd ANDERSEN / AFP) (Photo by ODD ANDERSEN/AFP via Getty Images)
Tesla CEO Elon Musk laughs at construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin. (Photo by ODD ANDERSEN/AFP via Getty Images)

Elon Musk has become the world’s second-richest person, thanks to the phenomenal growth of Tesla (TSLA) stock prices this year.

He’s now tied with Bill Gates, with the net worth of both billionaires at US$128 billion (AU$174 billion), according to Bloomberg’s Billionaire Index.

The Tesla founder’s net worth has soared by a dizzying US$100 billion this year - an increase of 364 per cent. Most recently, his wealth jumped by US$7.2 billion.

The jump in ranks is considerable. In January, he was only 35th on Bloomberg’s list.

How did Musk get so rich so quickly?

Two words: Tesla shares. According to Bloomberg, three quarters of Musk’s wealth comes from Tesla’s stock prices; rather than a salary, he ties his compensation with the company’s stock. The market value of his electric vehicle company has pushed past US$526 billion.

In January, a single Tesla stock was worth US$67.27. It’s now worth US$555.38, an eye-watering jump of 830 per cent.

The company’s share price has also experienced a sharp uptick recently due to Joe Biden’s US Election win. The President-elect is a vocal advocate for green and renewable energy, which spells good news for electric vehicles.

Though it had a few production hiccups, Tesla has scaled up its production of its popular electric cars, with the Model 3 now the best-selling luxury car in America.

Musk last year predicted that Tesla’s market cap would hit US$500 billion because of its self-driving cars, though the company is still refining this software, Business Insider reported.

Musk’s wealth puts him in tied second place behind Amazon chief Jeff Bezos, who is worth US$182 billion.

Gates held the title of world’s richest man for years before Bezos took the title from him. However, Gates has been donating billions of dollars to charity for years, with Celebrity Net Worth estimating he’s given more than US$50 billion since 1994.

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