Elon Musk adds $2.3bn to his fortune in 60 minutes
INTERNATIONAL - Elon Musk’s fortune swelled by $2.3 billion in the span of an hour Wednesday after shares of Tesla Inc. soared in extended trading on stronger-than-expected fourth-quarter earnings and an accelerated timetable for the new Model Y crossover SUV.
The electric-vehicle maker’s stock, which closed at $580.99, surged 12% to $649 at 5:16 p.m. in New York, boosting the chief executive officer’s net worth to about $36 billion, according to the Bloomberg Billionaires Index.
Musk, 48, owns about a fifth of Tesla’s outstanding stock, which comprises the bulk of his fortune. His majority ownership of closely held Space Exploration Technologies Corp. accounts for about $14.6 billion.
Tesla’s shares have been on a roll since October, when the company posted a surprise third-quarter profit. Its market value is now well above $100 billion, and if it stays above that threshold for an extended period, Musk will be eligible to unlock the first chunk of a long-term compensation award that could net him more than $50 billion if all performance targets are met. He receives no salary or bonuses.
Within a year, the company achieved two of the milestones for Musk’s award: it brought in more than $20 billion in aggregate revenue over four quarters and booked more than $1.5 billion in adjusted earnings before interest, taxes, depreciation and amortization over that span. It also said the next Ebitda threshold --$3 billion -- is within reach.
For Tesla to achieve a $100 billion market value, its stock must climb to $554.80, based on the current number of shares outstanding. But it’s not a one-day event: the terms of Musk’s award require that both the six-month trailing share price average, as well as the 30-day trailing average, exceed that figure before the first tranche of options is released.
The tranche consists of 1.69 million options that would net Musk around $346 million if he exercised them and sold the shares immediately at the threshold share price, which could be a welcome payday for a billionaire who told a jury last month that he’s short on cash.
However, that’s an unlikely scenario. He hasn’t sold a single share of Tesla for years, apart from unloading $593 million of stock in 2016 to pay income taxes.
Additional reporting by Anders Melin and Dana Hull.