There aren't many people wealthy enough to buy an entire social media platform on what seems like a whim, but Elon Musk is one of them. He's amassed an immense fortune, but many people may not be totally familiar with how he did it. There are a bunch of steps along his journey toward becoming a man worth $240 billion, but it basically boils down to making big bets on the right things.
How did Elon Musk become so rich?
Like many tech entrepreneurs, Elon started by founding several tech companies in the '90s, including one which eventually merged with PayPal. Elon became the CEO of that combined company and was eventually ousted. He remained a large stakeholder, though, so he got a sizable payday when the company was sold to eBay.
From there, Elon discovered Tesla, and that's where he turned his hundreds of millions into hundreds of billions. Elon became an initial investor in the electric car company in the 2000s and helped transform it into the kind of luxury car brand that many people wanted to buy. In the past five years, the company's stock price has soared 1,100 percent, and Elon's 20 percent stake in the company has grown as a result.
At the peak of Tesla's stock price, Elon was actually worth more like $340 billion, but his worth has declined as the stock price has dropped. Currently, he owns 14.9 percent of the company's outstanding shares, which is worth roughly $120 billion. When combined with his options package as the company's CEO, his total stake in Tesla is worth more than $170 billion and is therefore the lion's share of his overall net worth.
Musk has smaller stakes in SpaceX and now, Twitter.
In addition to his sizable investment in Tesla, Elon is also the CEO and a major investor in SpaceX, his private space travel company. The company's total valuation is roughly $125 billion, and Elon owns 44 percent of the company, which makes his stake worth roughly $50 billion.
Elon has actually had to liquidate some of his Tesla stock in order to finance his purchase of Twitter, which was a roughly $44 billion purchase. Thus far, many of the investments that Elon has made have paid off in increases to his overall wealth. Twitter doesn't seem like the same kind of product destined for growth, but perhaps Elon knows something about it that everyone else is missing.
It's also possible, though, that given his incredible wealth, Elon is comfortable taking a bit of a loss on Twitter. He clearly loves posting on the platform, so in some ways it makes sense that he would want to own it outright.
Twitter's future is hugely uncertain, but Elon had the money to pay for it, so he did. Maybe one man shouldn't be able to accumulate enough wealth to buy out entire social media platforms and bend them to his will, but that's how our system works, and Elon decided to exploit it to his own ends.