Elon Musk is now the world’s second richest person

Elon Musk, the enigmatic and eccentric CEO of four different companies, has always been a captivating, and controversial figure. From the infamous ‘going private at $420’ tweet and a public stoush with the United States Securities and Exchange Commission (SEC) to marketing flamethrowers and smoking cannabis on-air during a podcast, Musk is never far from the headlines of the investing world, it seems.

But that reputation has done nothing to dent this man’s ability to make money – a fact on full display today. Reporting in the Australian Financial Review (AFR) today reveals that, as measured by the Bloomberg Billionaires Index, Elon Musk is now the world’s second-richest person. He displaces the long-term incumbent of the No. 2 spot, Bill Gates, of Microsoft Corporation (NASDAQ: MSFT) fame. Bill Gates has only ranked below No. 2 once before in the past eight years. He was sitting at the No. 1 spot until 2017 saw Gates knocked off the perch by Amazon.com Inc‘s (NASDAQ: AMZN) founder Jeff Bezos. However, the AFR does point out that if Gates hadn’t donated more than US$27 billion to various charities since 2006, his position would be higher.

Tesla drives Elon Musk up the rich list

Mr. Musk’s net worth reportedly surged a staggering US$7.2 billion this week to US$127.9 billion ($175.3 billion), meaning he has also added an almost-inconceivable US$100.3 billion to his net worth in 2020 alone. The AFR points out that Musk ranked ‘just’ 35 on the index back in January.

Mr. Musk runs three private companies: SpaceX, The Boring Company and Neuralink as well as (of course) Tesla Inc (NASDAQ: TSLA), which is publicly traded.

And it’s Tesla that is driving Musk’s fortune today. The AFR tells us that Mr. Musk has around three quarters of his net wealth in Tesla stock at the current time, with his Tesla position worth around four times as much as his SpaceX investment.

That’s what tends to happen when a company goes parabolic, which is the only word that one can really use to describe the performance of the Tesla share price over recent years. Tesla shares are up more than 500% in 2020 so far, including 24% in the past month alone. They are also up more than 1,300% since May 2019, and up an eye-watering 13,500% since the company’s initial public offering (IPO) back in 2010.

Over the past month, the Tesla share price has soared, including by more than 8% in one day last week after it was revealed that the US$494 billion company would finally be added to the flagship US S&P 500 Index (SP: .INX) next month. This optimism is based on the fact that Tesla will see billions of incoming funds heading its way as index and exchange-traded funds (ETFs) that track the S&P 500 are forced to buy into the company come December. When Tesla is added to the S&P 500, it will be the seventh largest constituent by market capitalisation, just below Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B).

More reading

• It’s official: Like it or not, millions will own Tesla stock soon
• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news
• Average Aussie needs 22 weeks to earn what Elon Musk does in 5 minutes
• Here are the US shares that CommSec customers are buying
• Tesla Stock Jumps on News It Will Join the S&P 500

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Berkshire Hathaway (B shares), Microsoft, and Tesla and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short December 2020 $210 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Amazon and Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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