Elon Musk net worth: how did Tesla CEO make his money? Is he still the richest man in world after Twitter buy?
The Tesla CEO, who is richer than Jeff Bezos and Mark Zuckerberg is now in second place to Bernard Arnault
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Elon Musk is arguably the most high-profile billionaire on the planet. Not only does he boast a net worth larger than those of Jeff Bezos and Bill Gates, but Mr Musk also owns famous businesses like electric car company Tesla, space exploration business SpaceX - and now, social media platform Twitter.
Over the last 10 years, everything the eccentric entrepreneur has said or done, including smoking weed on the Joe Rogan podcast and making controversial comments about the Russia-Ukraine war, has become global news within minutes. This level of fame (or infamy) has also seen his private life pored over.
The tech mogul’s relationships with the singer Grimes and actor Amber Heard, lovechildren with Neuralink executive Shivon Zilis, and the strange names of some of his other kids have all come under the media microscope.
Musk’s controversial Twitter buyout saw him fire thousands of staff, and propose charges for blue tick verification, which saw many users, including Stephen Fry, flock to alternative social media site Mastodon. But how did Elon Musk get so rich he could countenance buying Twitter ? Here’s everything you need to know.
What is Elon Musk’s background?
Elon Musk was born into a wealthy family in Pretoria, South Africa in 1971. His mother, Maye, is a Canadian dietitian and model, while his father, Errol, is an engineer. While Musk remains close to his mother, his relationship with his father is understood to be strained.
A recent interview with Errol Musk, who has two children with his own step-daughter, saw him reveal that he was not proud of his son’s achievements. Musk senior also heaped praise on Elon’s younger brother Kimbal at the apparent expense of the tech entrepreneur.
Elon Musk was reportedly good with computers when he was a child and designed a video game aged just 12-years-old. He left for Canada when he was 17 to avoid military service under the Apartheid regime - initially studying at Queens University, Ontario before transferring to the University of Pennsylvania in the US in 1992.
With a physics and business degree under his belt, Mr Musk briefly enrolled for a physics PhD at Stanford University, California. But he dropped out to set up online business directory Zip2 with his younger brother Kimbal in 1995. The pair sold the firm in 1999 for $307 million, with Musk himself receiving $22 million from the deal.
In 2021, Elon Musk revealed he has Asperger's syndrome - a condition which means he interprets the world around him differently to most other people. It partly explains why his behaviour can seem unusual at times.
How did Elon Musk make his money?
Unlike most other billionaires, Elon Musk made the bulk of his wealth through several successful business ventures. Most of the world’s other wealthiest people have relied on one big success, such as Jeff Bezos with Amazon or Mark Zuckerberg with Facebook. After selling Zip2, he went into online banking and payments with controversial businessman and libertarian Peter Thiel. The pair set up what would eventually become payments platform PayPal.
His stake in the business netted him $180 million when PayPal was snapped up by eBay in October 2002. But while Elon Musk’s money had thus far been made on earth, he was already looking to the stars. He founded SpaceX in March 2002 with the ambition of colonising Mars using affordable rockets.
A year later, he ploughed $6 million into Tesla despite the company having not even produced a real car. Both firms struggled initially, but SpaceX took off in 2008 after penning a $1.6 billion deal with NASA and Tesla’s first vehicle - Model S - went into mass-production in 2012.
SpaceX is now a key partner in NASA missions, while you can see Tesla cars on streets across the world as people have sought out more environmentally conscious modes of transport. The latter’s share price has pushed Elon Musk’s net fortune into the stratosphere. In 2021, the car company tripled in value to more than $1 trillion (£870 billion) - although it is now worth around $690 billion (£604 billion).
At the time of the launch of his Twitter buyout, Musk held between 17% to 21% of the company’s shares - a stake valued in the region of $150 billion (£131 billion). However, he sold roughly $8.5 million (£7.4 billion) of his Tesla stake in the run-up to his purchase of the platform. Musk then sold a further $4 billion (£3.5 billion) in shares following the completion of his Twitter buyout, bringing his overall 2022 share sell-off to $20 billion (£17.6 billion). Musk’s 48% stake in $100 billion (£87 billion) firm SpaceX makes up most of the rest of his fortune.
Elon Musk has also set out with two other business ventures in recent times. The Boring Company is a firm that digs big holes in the ground, while Neuralink is aiming to develop telepathic links to machines - an innovation which could transform the lives of people who have neurological disorders or severe spinal injuries.
Elon Musk’s Twitter buyout explained
On 4 April, Elon Musk bought a 9.1% stake in Twitter before announcing a takeover bid a few days later. It subsequently transpired the entrepreneur had been quietly buying up shares since January. The social media giant’s board initially sought to halt the buyout in a move that suggested they viewed it as a hostile takeover. But with shareholder pressure mounting, Twitter’s executives performed a u-turn - agreeing sell the company to Musk for $44billion (£38.5 billion) on 25 April.
However, this move was just the beginning of what would soon turn into a protracted saga. On 8 July, after almost two months of threatening to end the buyout, Elon Musk said he was pulling the plug on the deal due to the number of fake or spam accounts found on the platform.
At the time, there was speculation that the buyout had only been launched to destabilise Twitter, or to get it to reconsider its freedom of expression policies. Mr Musk alluded to his opinions of the site’s hate speech policies in a series of Tweets posted on 26 April, and has also previously said his buyout was a bid to “own the libs” - i.e. frustrate people who are politically central or left-of-centre.
Since the takeover, the billionaire has said he bought the platform “because it is important to the future of civilisation to have a common digital town square”. He added that he believes it can be used to break down societal divisions.
It comes despite Elon Musk previously saying he would welcome disgraced former US President Donald Trump back to Twitter - a move that could prove to be extremely divisive. Trump was permanently suspended from the social media site in January 2021 “due to the risk of further incitement of violence” after rioters attempted to overturn the result of the 2020 US election at the Capitol in Washington DC.
Trump, who used his Twitter account to denounce his critics and announce policy on the hoof during his time in office, has previously said he would not be reactivating his account. He now publishes his thoughts on his own social media app Truth Social.
In July, Twitter sued Musk in a lawsuit that would either have forced him to follow through on the takeover or pay out a hefty financial penalty. Since the takeover launched, Twitter had brought in a hiring freeze, laid off workers, halted discretionary spending and fired two of its top managers. But this trial was paused after Elon Musk said he was resurrecting his bid on 10 October. Days later, it was revealed Musk’s conduct in the deal was under federal investigation.
On 26 October, Musk tweeted a video showing himself walking into Twitter HQ holding a sink, before reports emerged on 28 October that his buyout had been completed. This latter date had been the deadline for the buyout, with Musk facing a trial had it not gone ahead.
He completed the deal with backing from Oracle software group founder Larry Ellison, and the cryptocurrency platform Binance. A consortium of banks and financial institutions, including money from repressive regimes in Saudi Arabia and Qatar, also helped to finance the takeover.
Musk soon changed his profile bio to ‘chief twit’ and tweeted: “the bird is freed.” Senior Twitter executives, including CEO Parag Agrawal, were immediately fired, with a significant number of staff also forced out of the door - although there are signs some have since been rehired. It is expected Elon Musk will become the firm’s CEO.
As well as changes to Twitter’s behind-the-scenes operations, Elon Musk has proposed charging for account verification and could also expand the app into areas beyond publishing. He has previously said he wants to create something called ‘X’, which would operate in a similar way to China’s WeChat app. Essentially, Twitter could become a place where you could buy food, pay a taxi fare or game. Such a move could greatly increase the revenues generated by Twitter as it would allow it to sell on more user data for advertising purposes - a similar business model to Facebook’s owner Meta, and one that could prove necessary given the platform is struggling to turn a profit.
Since his takeover, Musk has been more measured than his previous statements have suggested. He has put plans to welcome back banned people on hold and has said the site’s policies have not changed. The entrepreneur has announced the creation of a ‘moderation council’ that will have a range of “diverse viewpoints”.
In an open letter to advertisers, he has also insisted Twitter will not become a “free-for-all hellscape” where there are no consequences. It has been seen as an attempt to quell anxiety from firms that their adverts could appear next to hateful content. Ford owner General Motors has already announced it will pause advertising on the platform until it receives further clarity on the direction Twitter will be taking.
Why is Elon Musk controversial?
Elon Musk is a divisive figure - idolised by people who like his maverick streak, and detested by those who despise his views and his wealth. As well as his stance on free speech, recent controversies surrounding Musk include his downplaying the severity of Covid-19 and reports of a poor working culture at Tesla - claims he denies. He has also been criticised for stunts, including running a Twitter poll on how to secure peace in Ukraine.
As well as these statements, Musk has come under fire for arguing against higher tax rates for rich people. His comments came despite an investigation by news site ProPublica finding he paid an unusually low rate between 2014 and 2018.
While his business success is in no doubt, Musk’s erratic public behaviour in recent years has also led to several high profile gaffes that have cost both him and his investors millions of dollars. One of the most famous was when he smoked weed during a filmed podcast interview with Joe Rogan in 2018 - something which crashed Tesla shares by more than 9%.
That same year, he also blamed marijuana for an announcement he made on Twitter about taking Tesla back into private ownership for $420 a share - the number 420 being a reference to weed. Tesla shares rose 11% with the Tweet, but the subsequent marijuana revelation saw them dive 8.8% just a few weeks later.
It also led to a battle with the US Securities and Exchange Commission - a government body that regulates stockmarket activity - which accused Musk of providing misleading information about his intentions. Musk was taken to court by his investors who believed that they had been deceived by a buyout that never happened.
On Friday 3 February 2023, the SpaceX CEO was cleared of wrongdoing, Following the jury’s verdict the billionaire took to Twitter to share that he was “deeply appreciative” of the jury’s findings.
The SEC has since opened another investigation into whether Musk and his brother broke insider trading laws after he published a Twitter poll in November 2021 asking his followers whether he should sell off some of his Tesla stake. The poll came just hours after his brother had allegedly sold $108 million in Tesla shares.
What is Elon Musk’s net worth?
Musk is no longer the world’s richest person. According to Forbes, as of 4 February, Elon Musk was worth £184.2 billion (£152.8 billion). In January, the Tesla CEO broke the world record for the largest loss of personal wealth in history, according to the Guinness Book of Records.
It is estimated that Musk’s personal net worth has fallen by as much as $200 billion (£167 billion) since November 2021, although it is almost impossible to confirm the exact number. His fortune peaked at around $320 billion (£264 billion) in 2021, with most of his wealth in his Tesla stocks, with their market value has dropping by around 46% this year on the back of worse-than-expected trading, while it is expected his Twitter deal will lose him more money than he’ll gain.
Despite no longer being the richest person in the world, to put his wealth into perspective, Elon Musk is worth more than the gross domestic product (GDP) of more than 150 countries and territories, according to the latest World Bank data. This includes the entire GDPs of countries like Portugal, New Zealand and Iran. Musk’s wealth equals just under 10% of the UK’s entire GDP.