The ongoing rivalry between Elon Musk and Jeff Bezos has acquired a new dimension.
Elon Musk’s dramatic entry into the Forbes 400 Top Ten this year has put Jeff Bezos, currently the richest man alive, on notice. After accomplishing the incredible feat of quintupling his net worth in a span of 12 months, the next stop for Musk could well be World Number 1. However, Bezos who is currently sitting on a stash of $202 billion is not an opponent to be taken lightly.
After quintupling his net worth in a span of 12 months, the next stop for Elon Musk could well be Jeff Bezos’ World Number 1 spot.
The coronavirus crisis has taken a heavy toll on the world’s business elite who together accounted for nearly $8.7 trillion of global wealth in 2019. With stock valuations plummeting, many former billionaires have been humbled. With investors flocking to safe-haven commodities like gold, market sentiment has been at its lowest ebb in years. However, the pandemic has spared and even spurred the growth of tech fortunes from Silicon Valley to China.
The Pandemic Affect on the Rich List
With the Forbes 400 for 2020 being released, investors and the public at large must be keenly watching how the unprecedented rally in tech stocks in the recent past plays out for Elon Musk whose personal net worth crossed $100 billion for the first time this year. Musk upstaged Mark Zuckerberg to claim the number three spot in the first week of September.
The Tesla boss has seen his personal net worth swell by tens of billions of dollars fueled by investors betting big on Tesla. He edged past Zuckerberg’s $111.09 billion fortune as his own net worth grew to a mind-boggling $115.4 billion. In the span of less than a year, Tesla’s stock value has galloped more than 475%, vaulting Musk ahead of Microsoft’s Steve Ballmer, Oracle’s Larry Ellison, investment whiz, Warren Buffett and of course, Mark Zuckerberg.
In less than a year, Tesla’s stock value has galloped more than 475%, vaulting Musk ahead of Steve Ballmer, Larry Ellison, Warren Buffett and Mark Zuckerberg.
Comparisons are already being drawn between Musk’s rapid rise through the ranks of the world’s richest in the span of just one year with Bezos’ own incredible feat in 2018 when he unseated Bill Gates to take the number one spot in a similar amount of time.
Tesla stocks on overdrive
Jeff Bezos himself was worth around $114 billion in September last year. Since then Bezos has added a whopping $86 billion to his fortune taking him well over the $200 billion mark- a first for any one man, alive or dead! Incredibly enough, that’s nearly double what he was worth 12 months ago. Musk’s feat is no less amazing. He didn’t even figure in the Top 10 last year.
Having broken into the exclusive centibillionaire club, Musk is now clearly in the reckoning for a shot at Jeff Bezos’ crown in the near future. To be fair, Tesla’s revenue is not even close to Amazon’s and experts put the exponential increase in its stock prices down to frenzied buying by investors which is expected to be a short-term phenomenon. However, despite a 5 for 1 stock split to rationalize the price, demand for Tesla stock has soared more than 300% since last year, according to analysts.
Watch: Is Elon Musk on course to be the world’s first trillionaire?
There is no denying that Musk is over 5 times richer today than he was a year ago. The turn of events bears a close resemblance to Bezos’ own momentous rise to the top spot. In 2017, Bezos’ net worth was estimated by Forbes at $81.5 billion which nearly doubled to $160 billion in just 12 months as Amazon’s stock soared to new heights.
Though most of his wealth comes from Tesla’s staggering growth, Musk has boldly pursued new opportunities in diverse domains. SpaceX is now entering a critical growth phase and will soon contribute more substantially to Musk’s net worth. Among the technocrat’s latest ventures is a neurotechnology venture, Neuralink which aims to develop a “Fitbit for your skull” while The Boring Company – launched in 2016 – is building a tunnel network exclusively for electric vehicles.
Musk’s recent ascent bears a close resemblance to Bezos’ own momentous rise to the top spot.
Amazon reigns supreme
Despite giving up 25% of his Amazon shares to ex-wife MacKenzie last year, Jeff Bezos has managed to hold on to the number one spot on the Forbes Rich List this year. The e-commerce boom fueled by the coronavirus pandemic has given Amazon’s valuation a double digit boost. The e-commerce giant’s global sales is estimated to cross $416 billion by the end of 2020, a growth of nearly 24% year on year.
The e-commerce boom fueled by the coronavirus pandemic has given Amazon’s valuation a double digit boost.
Bezos is now worth $202 billion, miles ahead of his nearest rival, Bill Gates. While this makes him unassailable at least in the near term, it should not be forgotten that Bill Gates enjoyed a $35 billion lead over him as recently as four years ago. It must be said, however, that Bezos has decisively proved the experts who warned him that Amazon was spreading itself too thin with its aggressive diversification strategy wrong. True to form, he is actively scouting for new acquisitions to build on Amazon’s core competencies.
Watch: How Jeff Bezos’ fortune grew amid the Pandemic
Like Tesla, Amazon stock has also been a hit with investors throughout lockdown. After a precipitous sell-off prompted by fears of a catastrophic e-commerce collapse, Amazon made a strong comeback by late August 2020 with revenues hitting $88.9 billion in Q2 2020. To maintain its competitive edge well into the future, the company is doubling down on opportunities in cloud computing, self-driving vehicle technology and digital healthcare.
Bezos has decisively proved the experts who warned him that Amazon was spreading itself too thin with its aggressive diversification strategy wrong.
Can Elon Musk conceivably overtake Jeff Bezos?
While Amazon currently has a market cap of more than $1 trillion, Tesla and SpaceX are market leaders in their own right. Unlike Bezos, Musk’s business approach relies much more on gut instinct than any strategic analysis. Though their paths are set to cross much more often in the future- with respect to the billion-dollar commercial space market, for example – Musk’s appetite for aggressively leveraging debt could hobble his dreams of making it to the top of the Rich List.
Unlike Bezos, Musk’s business approach relies much more on gut instinct than any strategic analysis.
Despite Musk’s ability to take on seemingly insurmountable challenges, his lack of patience could be a stumbling block. The future clearly belongs to next-generation technologies like space flight, satellite clean energy and low-cost transportation. All bets are off as to what might happen in this battle between giants.