Watch CBS News

The world's wealthiest person: How did Elon Musk get so rich?

Tesla lawyers to question Elon Musk
Tesla lawyers to question Elon Musk ahead of trial: CBS News Flash Sept. 26, 2022 01:00

Tesla CEO Elon Musk, ranked as the world's wealthiest person by both Forbes and the Bloomberg Billionaires Index, last year explained that the secret to his wealth is simple: "I own 20% of a company that became very valuable."

Musk, whose wealth is pegged at $240 billion by Bloomberg, hasn't always been at the top of the heap. In early 2020, his wealth was just one-tenth of where it stands today, with his then-fortune of $25.6 billion placing him below the likes of Amazon CEO Jeff Bezos and Facebook CEO Mark Zuckerberg. 

Musk's remarkable jump in wealth is linked to his ownership stake in electric car maker Tesla, and to a lesser extent his holdings in ventures including Space X and Boring Company. Tesla, though, has been his primary vehicle for wealth creation, with the company's stock surging more than 1,100% in the past five years as investors rewarded the company for its huge growth in vehicle sales. Tesla's revenue jumped from $12 billion in 2017 to $54 billion in 2021. 

"I built these two companies and it was extremely difficult to build them," Musk told the conservative satire site Babylon Bee in December 2021, referring to Tesla and Space X. "Rewarding, too, but massively difficult ... and I didn't sell the stock in the companies."

He added, "My sort of impression was that you shouldn't take money off the table — or stock off the table — that a captain should go down with their ship."

Musk's wealth has ebbed and flowed over the past few years. At his peak, Musk was worth $340 billion, according to the Bloomberg Billionaires Index. That occurred in November 2021, when Tesla's stock price hit a record high of $414.50 a share, according to FactSet. Since then, the car maker's stock has dropped by about one-third.

Tesla stake

Although Musk said he doesn't believe in selling his shares, he has sold billions of dollars' worth of Tesla stock in the past year. One reason for offloading stakes in Tesla: a tax bill on stock options that were set to expire in August 2022, with Musk telling Babylon Bee that he "needed to exercise those options no matter what."

He also sold more stock in 2022 ahead of a court battle with Twitter. As of mid-August, Musk had sold nearly $7 billion worth of shares in the car maker. Musk tweeted that he sold the stake in order to avoid "an emergency sale of Tesla stock" if he loses his bid to cancel his $44 billion acquisition of Twitter. 

Currently, Musk's Tesla stake stands at 14.9% of its outstanding shares, an investment that is valued at about $124 billion, according to FactSet.

While Tesla doesn't pay Musk a salary, it has granted him generous options packages for hitting certain performance targets. When adding in options, Musk's stake is worth $176.3 billion, according to Forbes.

SpaceX holdings

Musk's rocket business SpaceX also contributes to his wealth. SpaceX was worth $125 billion in June 2022, with Musk's ownership at about 44%, according to Bloomberg. 

That would make his stake worth about $55 billion, although Bloomberg estimates the value at about $47 billion, as it assigns a 15% discount typical of big private tech companies that sell stock in the secondary market. 

Boring Company, Twitter 

Another $3.3 billion of Musk's wealth stems from Boring Company, which is a tunnel construction company he founded.

Musk also has $3 billion in Twitter stock, according to Bloomberg. He bought about 9% of the business before he made his bid to purchase the company, an effort that has since gone sour and is headed to court. Cash is also a big part of Musk's holdings, with Bloomberg pegging his holdings at about $17 billion. 

"I don't have any offshore accounts; I don't have any tax shelters," Musk told Babylon Bee. "I basically have Tesla and SpaceX stock ... everything is extremely transparent."

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.