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No, Elon Musk Is Not The Second Richest Person In The World — Here’s Why

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(Photographer: Andrew Harrer/Bloomberg via Getty Images)

Thanks to Tesla’s roaring stock, Elon Musk’s net worth has nearly quadrupled during the Covid-19 pandemic, racing from $24.6 billion in mid-March to a current $126.8 billion by Forbes’ estimate. But despite this meteoric rise, the 49-year-old is not the world’s second-richest person yet

Forbes currently has Musk in the No. 3 spot, behind Jeff Bezos, who reigns supreme at $182.6 billion, and French luxury goods tycoon Bernard Arnault, worth $140.6 billion. With the surge in the value of Tesla shares this week, Musk surpassed Bill Gates, who is now in fourth place, worth $119.4 billion

Musk owns 21% of Tesla but has pledged more than half his stake as collateral for personal loans; Forbes applies a 25% discount to his shareholding to account for the loans. Musk’s net worth estimate includes $25 billion worth of options that he was awarded since May as part of  a historic 12-tranche compensation plan. 

Musk became eligible for the fourth tranche in late October after Tesla exceeded the cumulative EBITDA requirement, but Tesla has yet to confirm in public filings that it has certified the results. A representative for Musk did not reply to a request for comment from Forbes in time for publication. Until the receipt of the fourth tranche is confirmed, Forbes is only counting some 25 million options from the package towards Musk’s net worth.

Musk also owns an estimated 48% of SpaceX, the rocket company that recently made its first launch with astronauts on board. Investors valued SpaceX at $46 billion in August. After applying Forbes’ 10% private company discount, Musk’s SpaceX stake is worth just under $20 billion.

Tesla’s shares have risen 36% since Tuesday November 17 when S&P Global announced that the electric car company would be added to the S&P 500 index on December 21. The addition to the index means that more mutual funds tied to the S&P 500 will buy Tesla stock. 

With a current market capitalization of $525 billion, Tesla is worth far more than Toyota ($198 billion) and GM ($66 billion) combined. In the first three quarters of 2020, Tesla delivered 318,000 cars, a small fraction of the number produced by the world’s larger automakers.

“I really couldn’t care less,” Musk emailed Forbes about his net worth in July. “These numbers rise and fall, but what really matters is making great products that people love.”

-By Hayley C. Cuccinello, Forbes Staff

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