‘Jeff who?” That was Elon Musk’s answer in 2016 when he was asked for his thoughts on Amazon’s founder, Jeff Bezos.
It was a bold riposte: Bezos was already the world’s fifth richest person, whereas the Tesla and SpaceX boss was only number 94.
Today, Bezos is unlikely to be asking “Elon who?” This year of disasters has been a stunning success for both men as record demand for their companies’ shares lifted the value of their own holdings to new heights.
And while Bezos was already Earth’s richest man before coronavirus, Musk has rocketed into second place with an estimated fortune of $US136 billion ($184 billion) – an achievement that must be all the sweeter for the long history of public sniping between the two tycoons.
Bezos’s fortune currently sits at $US183 billion, a $US68 billion increase since last year. Over the same period, Musk’s wealth has soared by more than $US100 billion.
“These are risk-takers who defied the odds and now they’re both sitting at the top of the mountain,” says Dan Ives, director of equity research at Wedbush Securities.
“Bezos had an idea in the Nineties about ecommerce, and many laughed and thought the vision was never going to bear fruit. Musk was able to build an electric vehicle industry that has reached a level of success that the sceptics never envisioned.”
At the start of the pandemic, Bezos seemed the undisputed king of the world. Lockdowns simply strengthened Amazon’s already unyielding grip on the high street. Its profits leapt 200 per cent in the last quarter and in August, Bezos became the first man to become worth $US200 billion.
While many bosses were toying with asking their teams to reinterview for reduced roles, Amazon employed 250,000 more workers – plus 100,000 temporary Christmas staff.
“Bezos and Amazon took the pandemic very seriously and didn’t fall asleep at the wheel like others did,” says Sanchit Jain, an analyst at Enders. Bezos’s technology roots have laid a foundation for “the most flexible ecommerce plan in the world”, which allowed Amazon the agility to switch quickly when necessary.
Its ability to handle strain on warehouse operations thanks to high demand looked like a walk in the park compared to supermarkets in the UK, which suffered shortages as households panic-bought.
When France threatened the marketplace with fines of €100,000 for any non-essential item it shipped, Amazon made the quick decision to suspend operations, focusing on other markets, rather than policing items (a difficult task with more than 1.1 million active sellers in Europe).
Not only does the company offer a large range of items and guaranteed speedy delivery, families have been signing up for Prime memberships to watch football, or play games on Twitch, as they stayed behind closed doors. With his number one status, Bezos is currently the only person that stands in Musk’s way to become the world’s richest person. But that could soon change if the pace of Musk’s wealth increase continues.
For many, the charismatic billionaire has the edge over Bezos thanks to Tesla’s share surge. The company has been riding a wave of enthusiasm from investors who see the electric carmaker’s future as bright.
This year alone, Tesla shares have risen more than 500 per cent, valuing it at more than $US500 billion.
Its share price has also been boosted in recent weeks by Joe Biden’s victory in the US presidential election and the announcement that it will be listed on the prestigious S&P 500 index as of December 21. And the company shows no signs of slowing. On Tuesday, Musk announced that Tesla is looking at expanding in Europe by entering the mass-market segment with a compact car. On a global level, Tesla is also due to market its new “Cybertruck” pick-up within two years.
As well as providing results – Tesla has seen five consecutive quarters of profit – Musk will continue to benefit from the “cult of Elon”, which has converted mere customers into zealous disciples of his high-octane “Iron Man” image.
Meanwhile, Musk and Bezos will probably continue to skirmish, if not through their companies then through their personal involvement in the nascent space industry. Here too, Musk has the upper hand. Last week, SpaceX made history as the first commercial company to shuttle astronauts from Earth to the International Space Station. It plans to make lunar landings by 2022. Meanwhile Bezos’s company, Blue Origin, is racing to create a landing system that could put astronauts on the moon by as early as 2024.
Despite their similarities, the two tech tycoons have different philosophies: Bezos is a master delegator focused on building a sprawling hierarchical business and jealous of his private life, while Musk is a mercurial hands-on engineer who loves the limelight.
As Ives says: “I wouldn’t expect them to be having dinner together any time soon”.
Source: Thanks smh.com