Background Information
Elon Musk is the flamboyant creator and leader of Tesla, who has a net worth estimated to be around $60 billion. He currently holds an estimated 22.8 million Tesla common shares, representing around 19.9 percent of the entire company and is often recognized by the public as the face of Tesla. Musk bought Tesla in August of 2004 for $7.5 million, investing a $6.3 million syndicate loan plus a $1.2 million of his own money in the company. In 2020, Musk is estimated to be worth around $209 billion.
Relevant Data
Based on documents filed with the US Securities and Exchange Commission, Musk currently holds a 5.6 percent stake in Tesla, making him the largest shareholder of the company with 22.8 million shares. This translates to an estimated value of around $63 billion, taking into account Tesla’s current stock price of around $2,788 per share.
In addition to his stake in Tesla, Musk has an estimated 7.4 percent stake in SpaceX, the aerospace engineering firm he founded in 2002. SpaceX is currently valued at around $36 billion, giving Musk a total estimated net worth of around $209 billion.
Expert Perspectives
According to analysts and industry experts, Tesla’s current stock price of around $2,800 per share is only a fraction of what it could be worth in the near future. Tesla’s recent market capitalization of approximately $500 billion could easily double or triple in the coming years, lifting the stock price to around $10,000. If this happens, Musk’s stake will be worth more than $250 billion, making him the world’s wealthiest person.
In contrast, some experts have argued that Tesla’s stock price may have peaked and that it may be time to cash out. With Tesla’s stock up more than 700 percent in the last year, some industry veterans believe it is a sign of a potential “bubble” and that Musk’s large stake may be worth less in the near future as investors start to flee from the stock.
Own Insights and Analysis
As of April 2021, Musk is estimated to own around 22.8 million shares of Tesla which make up 19.9 percent of the entire company. Musk’s stake continues to grow as the company’s market capitalization rises. Musk’s estimated net worth of around $209 billion could increase significantly if Tesla’s stock price keeps increasing, giving him an even larger stake in the company. At the same time, there is some risk that Tesla’s stock could suddenly drop and that Musk’s fortune could shrink significantly if investors flee from the stock.
Economic Factor
In the long run, Tesla’s stock will depend largely on the strength of the global economy. As long as the global economy continues to strengthen and demand for Tesla’s vehicles and services remain strong, Tesla’s stock price is likely to continue growing. However, if the global economy begins to slow or enter into a recession, demand for Tesla’s products could suddenly evaporate, causing its stock price to plunge. This could have a major effect on Musk’s fortune, as he holds such a large stake in the company.
Political Factor
The success of Tesla is largely dependent on government policy. Currently, Tesla receives a massive tax credit from the US government, which helps keep prices of their vehicles more affordable. Any shifting of policies regarding electric vehicles, and their associated incentives, could have a detrimental effect on Tesla’s stock price, and on Musk’s fortunes. Similarly, international tariffs, economic sanctions and other geo-political factors could all have a significant effect on Tesla’s business and consequently on Musk’s stake in the company.
Examining the Risks
While investing in Tesla can be extremely lucrative in the long run, it also carries a high degree of risk. Tesla is a volatile stock and the company is involved in numerous lawsuits, which could have a major impact on the company’s stock price. Additionally, Tesla is largely dependent on government policies regarding electric vehicles and subsidies, which could also suddenly change. This could cause Tesla’s stock price to drop and Musk’s fortunes to shrink.
Analyzing the Rewards
Despite the risks associated with investing in Tesla, there are a few potential major rewards for Musk’s stake. With Tesla’s current market capitalization at around $500 billion, some industry experts believe that the stock could double or triple in the near future. If this happens, Musk’s stake will be worth more than $250 billion, making him the world’s wealthiest person.
Important Milestones
One of the reasons Tesla’s stock has skyrocketed in the last few years is due to the company’s numerous successes, particularly in the automotive industry. Tesla has achieved a number of important milestones in the last decade, such as the first successful production of an electric vehicle, the first autopilot feature, the launch of the Model 3 and the launch of the solar roof. These successes have translated into a bigger market share, which in turn has driven up the stock price and Musk’s fortunes.
Tesla and the Future
In the long run, Tesla has the potential to become one of the world’s leading automotive companies. The company is investing heavily in research and development of autonomous vehicles, as well as in renewable energy sources such as solar, wind and geothermal. If these investments pay off, and demand for Tesla’s vehicles and services remain strong, the company’s stock price will likely remain high, making Musk’s stake in the company even more valuable.
