“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 $136bn (£101bn) – an achievement that must be all the sweeter for the long history of public sniping between the two tycoons.
Bezos’ fortune currently sits at $183bn, a $68bn increase since last year. Over the same period, Musk’s wealth has soared by more than $100bn, putting him in prime position to ride behind his rival in the triumphal chariot, impatiently tapping his shoulder.
“These are risk-takers who defied the odds and now they’re both sitting at the top of the mountain,” says Dan Ives, managing director of equity research at Wedbush Securities.
“Bezos had an idea in the nineties about e-commerce, 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 skeptics never envisioned.”
How Elon Musk got the edge over Jeff Bezos
Amazon seizes the benefits of lockdown
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.
The company’s profits accordingly leapt 200pc in the the three months ending in September. One month earlier, Bezos became the first person in history to amass a neet $200bn.
While many bosses were toying with asking their teams to re-interview 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 e-commerce expert at Enders Analysis.
He says Bezos’ technology roots have laid a foundation for “the most flexible e-commerce 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.
Jeff Bezos | A carefully cultivated public image
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 1.1m active sellers in Europe).
As well as boasting a large range of items with (mostly) guaranteed speedy delivery, it has also benefited from families signing up for Prime memberships to watch football, or play games on Amazon’s live streaming subsidiary Twitch, as they stayed behind closed doors.
‘A golden age of electric vehicles’
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.
Uunlike Amazon, the pandemic had no obvious upside for an electric car company run by a man who predicted that Covid-19 would be eradicated in the US by the end of April. Yet shares have risen sixfold since the start of 2020 thanks to a wave of enthusiasm from investors who see a bright future for the first breakout electric car maker.
That has crowned Tesla as the most valuable auto company on the planet, with a market capitalisation of more than $500bn. At the time of writing, its value exceeded that of Toyota, Volkswagen, Daimler, General Motors and BMW combined – having been boosted last week by Tesla’s admission to the prestigious S&P 500 index.
All of which, according to Ives, makes Musk’s “jaw-dropping” feat more impressive than Bezos’s, indicating the scale of the tectonic global changes that Tesla is helping to bring about.
“We’re entering a golden age of electric vehicle adoption around the world, and right now it’s Tesla’s world and everyone else is paying rent,” he says. “Musk, with his back against the wall, has had one of the more historic comebacks in technology history.”
Ives predicts that Tesla will maintain a 60-70pc share of the electric vehicle market through the next decade, even as electrics expand from 3pc to 10pc of all sales. Crackdowns on carbon emissions across the world and the rise of Joe Biden to the US presidency create a “very fruitful backdrop” for the sector.
It is a long way from the end of 2018, when Tesla had yet to make an annual profit and its factories were stuck in “production hell”. Musk’s own leadership was in question due to his volatile behaviour on Twitter, which had attracted both punishment from regulators and a lawsuit from one of his targets.
To Ives, those questions have been decisively answered by Tesla’s production since then. He says that investors have largely accepted the “noise” as a cost of doing business with a man many of them see as a “modern-day Einstein”.
The company shows no signs of slowing. On Tuesday, Musk announced that Tesla is looking at expanding in Europe with a compact mass-market car, and a new “Cybertruck” pickup model is expected within two years.
The cult of Elon vs the empire of Jeff
What does 2021 hold for the two wealthiest humans? Widespread deployment of a coronavirus vaccine is certainly a bright spot, since it will probably trigger an economic rebound.
In retail, consumers are spending more time researching the ethics of products as they shop online, and remote workers are more likely to visit local shops for off-the-cuff purchases. Hearing of Bezos’ spiralling wealth while tear-jerking “thanks for your business” closure signs appear in one empty shop front after another, might they turn against Amazon?
Jain thinks not. “Jeff Bezos has been rich for a long time,” says Jain. “There’s always been people who avoided Amazon for various reasons but I think because we are going to be shopping online, everyone will be looking for a stable experience.”
Nor does he believe that a vaccine will dim Amazon’s lustre. “The rapid growth from the pandemic will temper, but online retail is pretty sticky. I don’t think it will go back to the levels before Covid-19, particularly among the older, die-hard high street shoppers who have had a taste for online shopping.”
As for Tesla, Siegel is still undecided on whether its current value is justified. But he says Musk will continue to benefit from the “cult of Elon”, which converted mere customers into zealous disciples of his high-octane “Iron Man” image.
“He shot a Tesla into space and then he played ‘Starman’ by David Bowie!” exclaims Siegel (fact check: this is true). “For the buyers it’s so much more than just a car company. It’s an affiliation, it’s a club, and Elon’s the head dude who flips the bird to the universe.”
Either way, Musk and Bezos will probably continue to skirmish, if not through their companies than through their personal involvement in the nascent space industry.
Here too, Musk has the upper hand. Last week SpaceX made history with its first full operational mission to the International Space Station. It plans to make lunar landings by 2022. Meanwhile, Bezos’s 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."
Свежие комментарии