The Deal That Catapulted Elon Musk to the Centibillionaire League

The Deal That Catapulted Elon Musk to the Centibillionaire League

Tesla’s Elon Musk has climbed past Facebook’s Mark Zuckerberg in the billionaires chat table. The tech prodigy saw his asset value leaped to $115 billion after Tesla’s 5-1 stock split on Monday that yielded 12% surge.

Monday’s activities saw Musk secured a top three position in the league table of billionaires. He is now only poorer than Jeff Bezos, the world’s richest man with $205 billion net worth and Bill Gates, the second richest in the world with $126 billion net worth.

The year 2020 has seen Elon Musk viciously climbed the billionaires’ ladder amid the success of his business adventures, including SpaceX’s space trip.

However, his earnings have come from mainly Tesla, whose stock has risen to 1000% this year, putting the company’s worth around $475 billion.

The Making of a Centibillionaire

In 2018, Musk got Tesla’s shareholders to approve a pay package that does not involve salaries or cash bonuses. The deal means that Musk will be paid through 20.3 million stock options over the course of 10 years, in 12 equal blocks of 1.7 million options. His stock payment happens whenever Tesla achieves its operational and market value goals.

Musk qualified for the first block of stock payment on May 28, when Tesla hit a $100 billion market cap, and was paid a whopping $1.8 billion on July 10. He has received multi-billion dollars payment in stock options since May and will likely receive more before the end of the year.

Musk was worth about $32 billion in January this year, but has witnessed his net worth skyrocket by about $90 billion to get him a prominent place among centibillionaires. Musk owns about 20% of Tesla’s shares, making him the highest shareholder of the company, and putting him in a position to climb higher before the year runs out.

In addition to Tesla, Musk has been working on his space projects that consist of satellite internet and commercial trips to Mars. The Starlink satellite internet, a project geared toward providing high speed broadband internet for locations where internet access has been poor, unreliable, expensive, or not available has scaled the hurdles to success. Over 700,000 people are said to be already demanding the internet service in the US alone.

The Starlink project aims to provide satellite internet service in the Northern United States and Canada by the end of 2020, and reach as many locations as possible globally in 2021.

On his Space trips project, Musk said SpaceX is planning to start the assembly of a prototype of the Super Heavy rocket booster that will take its starship into orbit. Starship is SpaceX’s platform for the moon, mars and beyond travels, and Musk, while acknowledging the challenge, said he is working with SpaceX to see that commercial space trips become a reality in 2021.

“This is uncharted territory. Nobody’s ever made a fully reusable orbital rocket… and then having something twice the size of a Saturn V (the rocket that astronauts travel with to the moon) that’s also fully reusable… that’s really something else, that’s profound. That’s the gateway to the galaxy or at least the solar system,” he said.

SpaceX has been working on the development of Starship at its Texas site, Boca Chica. The company has raised $1.9 billion in new funding due to emerging interest in SpaceX rockets, which has surged since the successful trip of the Dragon Crew to space, and the company now has oversubscription of nearly $2 billion.

According to Forbes, the global space economy is expected to be worth at least $1.1 trillion in 2040. SpaceX’s Starship will have the capacity to accommodate 100 passengers per trip at the cost of about $50 million per seat.

Apart from SpaceX and Tesla, Musk also runs other companies called Hyperloop and OpenAI. With this great future full of business adventures, he will likely usurp Bill Gates to the second position soon.

Musk will be due to receive the third block of his stock options in the near future, CNN said if Tesla maintains a market value more than $200 billion over the course of six months, and in four consecutive quarters smash its operational and market value goals, with either revenue above $30 billion or $3 billion in earnings, before interest and taxes, Musk will amass massive wealth.

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