Elon Musk saw a significant increase in his net worth during the COVID-19 pandemic period, largely due to the growth and success of his companies. Here’s a guide to understanding how Elon Musk’s wealth grew during the pandemic:
How Did Elon Musk Get So Rich During The Pandemic
- Tesla’s Stock Surge:
- Stock Appreciation: During the pandemic, Tesla’s stock price surged dramatically. In 2020, Tesla’s stock split 5-for-1, but even after accounting for that, its value increased significantly.
- Profitability: Tesla achieved consistent profitability, which qualified it for inclusion in the S&P 500, further boosting investor confidence and demand for its shares.
- Growth in Deliveries: Despite initial factory shutdowns due to the pandemic, Tesla ramped up production and deliveries of its electric vehicles, outpacing many skeptics’ expectations.
- SpaceX:
- Crewed Missions: During the pandemic, SpaceX successfully launched astronauts to the International Space Station, marking a significant milestone for commercial space travel.
- Starlink: SpaceX also began the more widespread deployment of its Starlink satellite constellation, aiming to provide high-speed Internet globally. This has the potential to become a significant revenue stream for the company.
- Neuralink and The Boring Company: Although these ventures didn’t contribute as massively to his wealth as Tesla and SpaceX, there was consistent progress in both. For instance, The Boring Company secured contracts for tunnel projects, and Neuralink showcased some of its advances in brain-machine interface technology.
- SolarCity/Tesla Energy:
- As the world continued its shift toward renewable energy, there was growing interest in solar energy solutions. This benefitted SolarCity, which was acquired by Tesla and now operates as Tesla Energy.
- Tesla’s energy storage solutions, like the Powerwall and Powerpack, also saw increased interest.
- General Market Trends:
- Tech Stock Rally: During the pandemic, tech stocks, in general, saw significant appreciation as investors anticipated and then witnessed a digital transformation and a shift to remote work.
- Low-Interest Rates: Central banks around the world lowered interest rates to stimulate economies during the pandemic. This made borrowing cheaper and often led investors to the stock market in search of better returns, further driving up stock prices.
- Public Perception and Brand:
- Elon Musk’s personal brand, his vision for a sustainable future, and his knack for achieving what many consider impossible have made him a magnet for both supporters and detractors. This visibility often keeps his companies in the spotlight, which can influence stock prices.
- Other Factors:
- Sales of other assets: Elon mentioned selling most of his real estate holdings.
- Compensation plan: Elon’s unique compensation plan with Tesla, structured around milestones, allowed him to earn options that increase in value with the company’s stock price.
It’s important to note that while the value of Musk’s holdings increased dramatically during this period, it doesn’t mean he liquidated those assets and turned them into cash. Much of his wealth is tied up in the stock of his companies. As with all stocks, the market value can fluctuate, and it’s contingent on the continued success and growth of his ventures.