How Elon Musk Became the Fourth Wealthiest Person in the World

The Forbes list of billionaires with the highest net worth was recently update to move technology entrepreneur Elon Musk, who has managed to triple his wealth during the coronavirus pandemic. The South African founder and CEO of Tesla Motors, the world’s most successful manufacturer of electric vehicles, is now higher on the Forbes list than Warren Buffet, and he has investors who feverishly trade shares of Tesla on Wall Street to thank for his billionaire status.

In just a couple of Wall Street trading sessions in August, Musk saw his wealth rise by about $7 billion to more than $90 billion. He is now just one spot below Jeff Bezos, CEO of internet shopping giant Amazon; interestingly enough, both Musk and Bezos have active interests in aerospace technology with the clear intent of sending humans to Mars one day.

Musk has often been compared to legendary American inventor Thomas Alva Edison, who was known for the diversity of the numerous patents he filed in his lifetime. Like Edison, Musk likes to keep his fingers in many pies, and this is one of the reasons he has been able to amass wealth since the days he was a software developer and early internet investor; however, most of his personal net worth is derived from his one-fifth ownership of all outstanding Tesla shares, a company that has only been around 10 years.

How Tesla Investors Created a Cult of Personality Around Musk

Wall Street analysts who follow Tesla have often remarked that the company is grossly overvalued. These are analysts who cannot reasonably deny the sheer success of the automaker in the electric vehicle space, but they also point out that the feverish action of Tesla shares, which trade on the Nasdaq under the TSLA stock symbol, are not commensurate with what the company has accomplished. According to Wall Street figures Tesla is more valuable than Toyota, and this is where the perspective is clearly skewed.

It helps to keep in mind that Toyota sells cars in just about every country around the world; this is something that will take Tesla at the very least another decade to accomplish. When you look at worldwide sales of passenger cars and light trucks, Tesla sells as many units as Porsche, but only about a tenth of Mercedes Benz or BMW. How can TSLA perform better than shares of Toyota?

One of the reasons investors are enamored with TSLA is that this is the only public company founded by Musk. SpaceX, the private aerospace firm that has managed to lock very lucrative NASA contracts, is not publicly listed on any financial exchange. It could be easily argues that Musk has been more successful with SpaceX compared to Tesla, but investors tend to associate all of Musk’s work with TSLA. Each time a SpaceX mission successfully lifts off a Falcon rocket and lands it back for a future mission, you can almost hear the sound of TSLA shares going up on Wall Street.

Wall Street investors and young day traders simply love Musk. They love how a member of Generation X can effortlessly hold Twitter and Reddit conversation with members of Generation Z. Musk is funny, irreverent, caustic, and strange. He is open-minded in some regards and obtuse in others. He loves to inject humor even in the most inappropriate situations. He smokes marijuana and tells his Reddit followers to only do so where it is legal, like in California. He has put all his real estate properties on the market because he wants to invest his own money into SpaceX with the goal of sending a space crew to Mars in his lifetime.

Musk is simply being Musk, but investors have forged a cult of personality and wrapped around TSLA. It is not surprising to learn that TSLA is the first stock young investor acquire on mobile trading platforms such as Robinhood. With all this in mind, we can almost bet that Musk will probably overtake Jeff Bezos on the Forbes list when SpaceX launches an initial public offering in the future.

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