SpaceX listing makes Elon Musk the world’s first trillionaire

Aalto University finance professor Vesa Puttonen says SpaceX’s stock is for many a ticket into the Elon Musk fan club rather than a bid for profit.

Elon Musk became the world’s first trillionaire on Friday when his rocket, satellite and space company SpaceX listed on the stock exchange, according to Yle.

“A billion is nothing anymore. A trillion is an incomprehensibly large sum of money,” Puttonen said.

He suggested comparing Musk’s wealth to Finland’s gross domestic product, which last year totalled €280.57 billion. Musk’s fortune is currently about 3.6 times that amount. Finland’s state budget expenditures this year are just over €90 billion; Musk’s wealth could cover all of Finland’s costs for more than 11 years.

“It’s important to remember that this is a notional wealth. Musk’s money is tied up in the shares of his companies,” Puttonen noted.

SpaceX’s share price rose nearly 20% on its first trading day, reaching $161.50 after peaking at $176 during the session.

Puttonen said the exceptional interest in the space company is largely explained by people’s need to believe in the future. In an era of wars, pandemics and general gloom, he said, people are inspired by Musk’s grand ideas.

“He thinks on a very large scale, and people want to be part of that. Whatever he does, the Musk believers are involved in everything.”

The professor said SpaceX cannot be compared to any other company, as its value cannot be explained by traditional metrics—just like its founder.

“The appeal of Musk’s entire persona is that he cannot be pigeonholed.”

Normally, Puttonen said, people invest in a company because they hope it will generate returns that repay their initial investment within a few years. With SpaceX, however, the company has posted massive losses, and its ambitious space travel plans are, in Puttonen’s words, “literally off the ground.”

“The popularity is based on nothing other than the belief that you should be on Musk’s rocket.”

At the listing ceremony, Musk promised his company would take humans to the Moon, Mars and eventually beyond.

Puttonen said some investors believe Musk’s vision of a Mars colony will come true and that SpaceX will become one of the world’s most profitable companies. For others, the realism of SpaceX’s promises is irrelevant.

“For some, the stock is just a ticket to the Elon Musk fan club. If you put a small amount of money into it, fine, but I wouldn’t recommend anyone invest their pension savings in it.”