19th December, 2024
For those who diligently watch world events and know how the markets move, Elon Musk’s recent surge to a personal net worth of $400 billion may not come as a surprise. It is a historic first, signifying that investors are pinning their hopes on the Musk-Trump relationship.
Following the President-elect’s victory in November, Tesla and Space X saw surges in share price. In 2024, Tesla shares rose nearly 71%, while Space X witnessed an insider share sale which pushed its valuation to $350 billion.
As the largest Tesla shareholder with 13%, Musk saw his personal wealth boosted from the purchase of as much as $1.25 billion of its common shares. Speaking about it in a post on X, Musk remarked, “What’s really crazy about this is that almost no investors wanted to sell shares even at a $350 billion valuation.”
Apart from Tesla and Space X, Musk also relies on Neuralink, his brain technology startup, which in tandem with Space X, relies heavily on government regulation and policy that could see friendlier reception by the Donald Trump administration.
How we got here
Musk’s journey to this financial zenith has been marked by a series of strategic moves and groundbreaking innovations.
Even on the weakened X (formerly Twitter) platform, Elon Musk’s ventures are not just about innovation but also profitability, with premium accounts on X offering revenue-sharing opportunities that attract creators and users alike.
Such bonuses and promotions often found in crypto, finance, and online entertainment spaces like Bonus Focus, help drive engagement and retention.
His wealth comes primarily from his stakes in Tesla, Space X, and other ventures like Neuralink and The Boring Company.
Let’s start with Tesla:
Tesla
The automotive company that insists on selling itself as a tech company has been on a historic run over the past month, pushing it to the first record close in three years. MarketWatch reports that the biggest gain it made was when General Motors announced it was abandoning its robotaxi business.
That refocused attention on Tesla’s recently announced robotaxi business, which the company has bet its future on. The expectation, as reported by Wedbush analysts, is that the robotaxi business could be worth $1 trillion by the end of 2025 and account for almost half of the company’s valuation.
As it stands, Tesla is the seventh most valuable company in the US, with a $1.37 trillion market cap. During its latest streak, the company saw its value increase by $240.3 billion. To put how insane that number is into perspective, that value increase is more than the total market cap of GM, Ford, and Stellantis combined ($139.8 billion).
Space X
In the aforementioned new deal to buy employees’ shares, Space X is now the most valuable private startup in the world. The company will buy about $500 million of shares with capital from investors.
In mid-November, Space X proposed pricing its shares at about $135, which would have put its valuation at more than a quarter of a trillion, but they seemed to have eked out another $100 billion as investors put more money in.
The company is now closely linked with all things space travel, including being awarded government contracts, some of which require high-security clearance. A notable event was its October flight on the Dragon spacecraft, which brought back a team of astrinauts who had been standed on the ISS for seven months.
This past June, it won a NASA contract to de-orbit the ISS when it is decommissioned.
The other companies
xAI:
This artificial intelligence startup raised $6 billion earlier this month at a validation of $50 billion, which is double what it was half a year ago.
Neuralink:
Meanwhile, Neuralink continues to pioneer brain technology, amid issues with the Securities and Exchange Commission, which is preparing numerous counts against him with regard to that company.
The Boring Company:
As for The Boring Company, things are somewhat quiet, except for the occasional announcement about something odd, like when he recently speculated about a 54-minute London to NYC trip via a Trans-Atlantic tunnel.
The Musk-Trump relationship
As President-elect Donald Trump seems poised to install Musk as the head of a proposed Department of Governmental Efficiency (the US already has something like this in place), many investors are expecting that he will be close enough to power to shape laws regarding regulations and promote business-friendly outcomes.
Musk’s businesses have also squeezed their way into international affairs, given his ownership of multiple international companies. The Pentagon has paid for his Starlink satellites to provide internet in Ukraine amid a damaging defence against a grueling Russian invasion.
NASA hires Space X for missions. The Boring Company is not just sitting around but has been hired by cities to dig infrastructure projects. Now, instead of holding all this power from the outside (as outside as it can get for the richest man in the world), he is going to be shaping government from within.
For many, especially those critical of the corrupting influence of billionaires in government, this is something to be afraid of. However, if there is anything to be learned from the recent surge in his net worth to unprecedented levels, investors may have a different opinion.