In recent weeks, Tesla CEO Elon Musk has once again become the world’s richest person on the back of the automaker’s surging stock. With roughly $70 billion being added to Musk’s net worth since the beginning of the year, some are pointing to the CEO’s recent trip to China as the culprit for Tesla’s rising share prices, and Musk’s subsequent reclaiming of the world’s richest person title.
Above: A Tesla logo on a Model 3 (Image: Casey Murphy / EVANNEX).
After falling to second-richest in December 2022, Musk has overtaken the top spot once again, as reported by Forbes. Tesla share prices have surged over 100 percent since the early January, pushing Musk past French entrepreneur Bernard Arnault. Musk is currently a 23-percent stakeholder in Tesla, including options.
According to the Bloomberg Billionaire Index, Musk was worth $205 billion as of June 6, while Arnault had just $187 billion on the same date. Following Arnault on the index were Amazon founder Jeff Bezos and Microsoft co-founder Bill Gates, with $150 billion and $128 billion, respectively.
The news comes after Musk visited China for the first time since before the COVID-19 pandemic, meeting with the country’s foreign minister and the minister of industry and information technology. Investors and analysts considered the visit positive news, especially as some say Musk is shifting to a renewed focus on Tesla after naming a new Twitter CEO.
“Playing nice in the sandbox in Beijing is something the Street is laser focused on to make sure there are no disruptions to Tesla’s expansion and tentacles within China for the coming years as this remains the #1 EV market in the world,” Wedbush analyst Dan Ives wrote.
Tesla reported its best profit margins and quarterly revenue yet for Q4 2022, at $3.7 billion. In the first quarter of this year, Tesla’s profit dropped to $2.5 billion, likely due to price cuts across the company’s entire vehicle catalog.
While price cuts and lowered profit margins were not initially well-received by some shareholders and analysts, Musk justified them by detailing a strategy of increasing vehicle volume on the road in the company’s Annual Shareholder Meeting. Musk also added that, even at zero profits on car sales, the company is well-poised to increase revenue and profits to software levels with the prospect of autonomy.
At the time of writing, during after-hours trading on Wednesday, Tesla shares are trading for $223.90 (-$0.67), representing a 0.30-percent drop from the market’s close. The company currently has a $701.44 billion market capitalization, and the stock is up 82.31 percent year-to-date.
Source: Forbes / Bloomberg Billionaire Index