Here’s a quick breakdown of Elon Musk’s net worth over the last 45 days:
- October 21: $250 billion
- October 30: $300 billion
- November 1: $335 billion
- November 4: $340 billion
- November 9: $300 billion
- November 14: $285 billion
- November 18: $290 billion
- November 30: $300 billion
- December 2: $285 billion
- December 3: $270 billion
As you can see, Elon’s personal fortune has been riding quite the roller coaster recently thanks almost entirely to the up and down stock price of Tesla.
On November 4, Tesla hit an all-time high of $1,243 per share. At that level, Elon’s net worth briefly hit $341 billion. That allowed him to officially surpass John D. Rockefeller as the richest person in modern history. Tesla closed on November 4 at $1,229. At that level Elon ended the day in a dead tie with Rockefeller.
At this Friday’s closing price of $1,014, Elon’s $270 billion net worth is $70 billion down from its all-time high. I don’t know how he’ll make-do. Thoughts and prayers to the dogefather.
On the bright side, even with that major drop Elon is still comfortably the richest person in the world. He actually dropped a full $15 billion in a single day Friday, but his $270 billion net worth still tops Jeff Bezos by $75 billion.
One could argue that Elon’s own share sales are exacerbating his wealth drop. In the last 25 days, Elon has sold $11 billion worth of Tesla. Just last week he sold 934,091 shares for a roughly $1 billion windfall. Must be nice, right?
That’s $11 billion converted straight to cash that’s now sitting in a bank electronically like this:
Before you get too excited and imagine Elon splurging on an actual Scrooge McDuck pool of money with his $11 billion, there’s a decidedly less sexy reason for the recent stock sales. Elon needs to hoard cash to pay an upcoming massive tax bill.
As we detailed last month, Elon faces a $10+ BILLION tax bill over the coming months related to stock options that were granted in 2012. Back in 2012 Elon was awarded 22.8 million shares at a strike price of $6.24 per share. By our estimate, based on Tesla’s recent share price, Elon has experienced a roughly $24 billion gain thanks to these options. Options are taxed even if you don’t sell them so Elon is on the hook for around $10 billion worth of income taxes to the IRS and state of California.
I know what you’re thinking… Didn’t Elon move to Texas??!! Why is he still paying California??!!
It is true that by moving his full-time residence to Texas, Elon will no longer be subject to any state income taxes. That’s an extremely smart move for someone who will potentially sell a hundred billion dollars worth of stock over the coming decades. Unfortunately for Mr. Musk, California tax collectors are notoriously stingy and strict when it comes to people fleeing the state.
First off, it’s almost certainly true that California will consider Elon a resident in 2021 since he did not officially make the move to Texas until sometime in late June/early July. At the very least California will potentially consider Elon a partial resident for the year. Another challenge is that California will claim Elon was a resident of California when the income was actually earned and therefore he’s on the hook for the full bill.
And don’t think for a minute that California won’t release its auditing hounds to prove exactly when Elon left, if he ever came back and if he’s truly living that Texas life. I would too if someone owed me billions!