Elon Musk slams one wealth measure as flawed, as he owns stock in his companies not a 'giant pile of cash'

  • Elon Musk slammed a measure of his fortune's growth as "silly" in a recent X post.

  • The Tesla and SpaceX CEO dismissed calculations of his wealth gains per second, minute, and hour.

  • Musk said he isn't raking in cash, but instead owns big stakes in companies he helped to build.

Elon Musk dismissed a measure of his personal fortune as absurd and misleading in a X post on Saturday.

The metric was flagged by one of the Tesla and SpaceX CEO's followers. It took the wealth that Musk gained over three years, and expressed it as nearly $2,400 per second, $143,000 a minute, or $8.6 million an hour.

"Such a silly metric," Musk posted. "It's not a giant pile of cash. I really just own stock in the companies that I was instrumental in creating."

"Technically, I 'lose' way more than that every time Tesla stock randomly drops," he added.

Indeed, Musk's roughly 13% stake in Tesla is worth around $100 billion — a big chunk of his estimated $232 billion fortune, per the Bloomberg Billionaires Index. He also owns around 42% of SpaceX, a position worth roughly $60 billion. Moreover, he owns about 80% of X — a stake worth around $16 billion — after buying the social-media platform formerly known as Twitter last year.

The value of Musk's Tesla position is calculated by taking the total number of shares he owns and dividing that figure by the company's stock price. However, it's hard to imagine that Musk would be able to sell all, or even some, of his shares at the prevailing market price without spooking other shareholders and causing the automaker's stock price to tumble.

Meanwhile, SpaceX and X are private companies with illiquid shares, so Musk's stakes are valued based on how much others paid for their slices of the businesses. If he wanted to convert his shares to cash, there's no guarantee they would fetch as high a price — especially if prospective buyers worried about how the companies would fare without Musk, or feared his disposals would spark a selling frenzy.

Tesla shares have doubled this year and soared more than tenfold within the past four years. Meanwhile, SpaceX notched a roughly $150 billion valuation following a funding round this summer. The upshot is that Musk's net worth has ballooned by $95 billion this year, making him easily the richest person on the Bloomberg Billionaires Index, and the biggest gainer on the list.

Other billionaires' fortunes are also based on stock they hold, and the amount for which they could theoretically cash in the shares. For example, Warren Buffett is worth an estimated $117 billion, as he owns $116 billion worth of stock in his Berkshire Hathaway conglomerate.

Read the original article on Business Insider