Elon Musk Soars Past Warren Buffett to Become the Seventh Richest Man in the World

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by Bhushan Akolkar · 3 min read
Elon Musk Soars Past Warren Buffett to Become the Seventh Richest Man in the World
Photo: Web Summit / Flickr

Tesla’s mammoth growth in 2020 has helped Elon Musk to add over $43 billion to his personal fortune just in the last six months. Currently, Elon Musk is the highest-paid CEO in the U.S. drawing a $595 million payday check.

Tesla Inc (NASDAQ: TSLA) stock zoomed past $1500 levels on Friday rising the fortunes of Tesla CEO Elon Musk by $6.1 billion in a single day. As per the Bloomberg Billionaires Index, Elon Musk becomes the seventh-richest person in the world with his net worth at $70.5 billion. Since the beginning of the year, Elon has added over $43 billion to his net worth as the Tesla stock surges more than 250% year-to-date. With this, Musk moves ahead of investing guru Warren Buffett as well as Google LLC (NASDAQ: GOOGL) tech titan Sergey Brin.

Tesla (TSLA) stock has witnessed a massive rally on Wall Street as the company continues to surprise investors with its massive production output. Despite the COVID-19 crisis and lockdown, Tesla has managed to beat the analysts’ estimates by a handsome margin.

Elon’s leadership abilities have also helped the company to become the world’s largest carmaker surpassing Toyota Motor Company (NYSE: TM). Tesla will be releasing its Q2 2020 results next week on July 22. If the company reports a fourth consecutive GAAP profit, it will be poised to enter the S&P 500 index.

The 49-year-old Tesla CEO currently holds a 20% share in Tesla and this account to his total of $70.5 billion net worth. Also, his majority ownership in SpaceX accounts for a $15 billion valuation. Musk also becomes the highest-paid CEO currently in the U.S. drawing $595 million payday.

By the end of May 2020, Tesla had granted Elon Musk stock options worth $1.8 billion today. Now, in just over two months, this is likely to repeat again. As per Musk’s pay package plan, the Tesla CEO could get 20.3 million stock options over the course of the next 10 years.

What May Help Musk to Move Even Higher from Buffett

Earlier this month, Tesla surprised Wall Street investors and analysts by announcing over 90,000 vehicle deliveries during Q2 2020. The market analysts expected Tesla to deliver 72,000 vehicles but the company has clocked 25% above that.

Now, it is more likely that Tesla will report the fourth-consecutive profit in its July 22 results, a key parameter to enter the S&P 500 index. If Tesla manages this milestone, analysts are giving the next target as $2000 for TSLA stock. Jim Bianco, head of Bianco Research in Chicago, noted:

“Even if you don’t like Tesla and you think it’s overvalued, the fact that it is going into the index would mean trillions of dollars would have some kind of position. As part of their benchmark, portfolio managers would not be able to ignore it.”

On the other hand, Galaxy Digital founder Mike Novogratz has warned against the valuations of tech companies. On Friday he said:

“We are in irrational exuberance — this is a bubble. The economy is grinding, slowing down, we’re lurching in and out of Covid, yet the tech market makes new highs every day. That’s a classic speculative bubble.”

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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