Elections have consequences. Just ask Elon Musk and Tesla (TSLA) shareholders.
Here’s the deal: In 2022, Tesla stock was a total dog, falling 65% and costing investors billions. It roared back in 2023 — the stock slightly more than doubled. And last year, Tesla rose 62.5%, adding a whopping $506 billion to its stock market value and producing big gains even for investors who don’t own the stock directly.
The biggest individual gainer, as you’d expect, is Tesla’s biggest shareholder: its CEO and self-crowned Technoking (whatever that means), Elon Musk, whose stake rose by $111 billion last year.
Here’s what’s interesting. All but $2 billion of Musk’s 2024 Tesla gain and about 98% of what other Tesla shareholders gained came after Election Day, when Musk began hanging out extensively with Donald Trump and started calling himself Trump’s “first buddy.”
Musk’s $109 billion Tesla gain from Election Day through year-end 2024 dwarfs the $277 million that Musk spent to help finance Trump’s election. (Now that’s what I call a good return.)
There’s no way, of course, to tell how much of Tesla’s post-election price surge is attributable to Trump’s election — and Musk’s subsequent Trump-amplified public profile. But you can be sure those things didn’t hurt Tesla’s share price at all.
Huge as Musk’s Tesla gain was in 2024, it was only about 55% of the amount that his wealth rose last year, according to the Bloomberg Billionaires Index.
At year-end 2024, Bloomberg says, Musk’s wealth had climbed to $432 billion from $229 billion at year-end 2023.
That’s because of increases in the value of his other assets, which include big stakes in Space X, xAI, and The Boring Company.
You don’t have to be the richest person in the world, as Musk is, to have racked up a nice gain from Tesla’s price increase last year.
According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, investors with money tied to the S&P 500 index gained $87 billion last year of the $395 billion gain that went to investors other than Musk.
Last year, of course, was a terrific year for investors, with the S&P 500 showing a total return — price gains plus reinvested dividends — of 25.02%.
If you started last year owning $10,000 of the S&P 500, Silverblatt says, your investment had risen to $12,502.26 in value at year-end. Some $67.90 of that $2,502.26 increase is attributable to Tesla.
That’s not a lot compared with Musk’s 12-digit Tesla gain, of course. But it’s a nice return for those of us — including me — who have significant investments in S&P 500 index funds.
Or, for that matter, in total stock market index funds. Or in actively managed funds that have significant Tesla stakes. Or for people who own Tesla directly.
Even without the Musk-Trump bromance, Tesla is well worth keeping an eye on this year. Will Tesla have another great year like 2024? With its sales slipping for the first time in a decade, will it have a ratty year like 2022?
I don’t know, and no one else does either. But it sure will be fun to watch.
Musk Math bonus item: When you calculate Musk’s wealth, you can’t just multiply his Tesla stake — 715,022,706 shares — by the market price. That’s because more than 40% of his holdings — 303,960,634 shares — are shares on which he has options, not shares that he owns outright.
So you have to subtract the option price he’ll have to pay — $23.34 a share, about $7 billion — from the shares’ value. At year-end 2024, when Tesla closed at $403.84, the 411,062,076 shares he owns outright were worth about $166 billion and his option shares were worth about $116 billion above their option price. Hence, the $282 billion number I’m using.
I’m assuming, as the Bloomberg Billionaires Index does, that Musk will get to keep his Tesla options despite a decision last year by a Delaware judge canceling Musk’s 2018 compensation package. He’s appealing that decision.
Disclosure: I own one share of Tesla, which I bought to have access to shareholder filings. I’ll donate to charity any profit that I realize on my share.
Allan Sloan, a contributor to Yahoo Finance, is a seven-time winner of the Loeb Award, business journalism’s highest honor.
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