It couldn’t get better for Elon Musk as he becomes world’s 2nd richest man

By Rahul Vaimal, Associate Editor
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Elon Musk continues his winning steak as he grabs the position of second richest man in the world

2020 must have been a terrible year for many but for the American billionaire Elon Musk it couldn’t have gotten any better.

The year of dizzying climbs by Mr. Musk reaches a new height as the co-founder of electric vehicle and clean energy company Tesla passed Microsoft co-founder Bill Gates to become the second-richest person in the world.

The net worth of the 49-year-old entrepreneur rose from $7.2 billion to $127.9 billion, powered by yet another surge in the share price of Tesla. This year, Musk added $100.3 billion to his net worth, the most on the Bloomberg Billionaires Index, a list of the 500 richest people in the world. He was ranked 35th in January.

His rise up the ranks of wealth was largely driven by Tesla, whose market value is close to $500 billion. Tesla shares, priced more than four times as much as his stake in Space Exploration Technologies Corp., or SpaceX, constitute around three quarters of his net worth.

Meanwhile, it is to be noted that Mr. Musk doesn’t take a single penny in salary. He follows an incentive-based compensation structure where he gets paid when Tesla or SpaceX hits certain financial milestones.

In the last eight years, Tesla and Musk seem to have come a long way. In 2012, Tesla’s market value was around ‘just’ $4 billion. Tesla’s stock value has gone up dramatically in 2020. In the first two weeks of the year, it had gone up by nearly 25%. It estimated that Tesla’s market value will touch $500 billion soon.

Mr. Musk unseats Mr. Gates with the latest leap, who the Tesla billionaire has mocked on Twitter for having “no idea” about electric trucks. The two have also clashed bitterly over COVID-19. Mr. Gates, whose charitable foundation is one of the preeminent bodies funding vaccine research, has expressed concern about Mr. Musk’s supposed suspicion about the pandemic.

It is only the second time in the eight-year history of the index that Mr. Gates has been ranked lower than number two. For years, he held the top spot until being pushed down by eCommerce  Amazon founder Jeff Bezos in 2017. If he had not donated so generously to charities over the years, Gates’ net worth of $127.7 billion would be much higher. Since 2006, he has donated more than $27 billion to his namesake foundation.

Last week it was announced that Tesla will join the S&P 500 list as the largest new member causing waves in the market.

This year has been a prosperous one for the richest people in the world. The members of the Bloomberg index have collectively accumulated 23 percent or $1.3 trillion since the year started, amid the pandemic and massive layoffs that have disproportionately impacted the working class and poor of the world.