Who’s overtaken Elon Musk as the world’s richest person?
CEO of Tesla Motors Elon Musk on the left, LVMH luxury group CEO Bernard Arnault on the right
By Piero Cingari
Published on 29/01/2024 – 10:40•Updated 12:05
Share this article
Comments
The change in the leaderboard is a symptom of diverging business empires and rapid movements in market performance.
Bernard Arnault, the head of LVMH (Louis Vuitton Moët Hennessy), has claimed the title of the world’s richest person, surpassing Tesla’s Elon Musk.
Arnault’s net worth now stands at an astounding $207.6 billion (€191.5 billion), edging out Musk’s $204.7 billion (€188.74 billion), according to the latest Forbes “Real-Time Billionaires List”.
Arnault experienced an extraordinary boost in wealth last week, with his net worth increasing by $22.7 billion (€20.9 billion) in just one day on Friday, representing a remarkable jump of 12.3%. In stark contrast, Elon Musk saw his fortune plummet by $18 billion (€16.6 billion) on the previous day, marking an 8.1% decrease in his net worth.
This flip in fortunes underscores the diverging paths of their business empires, particularly evident following the release of their latest financial reports.
Who is Frédéric Arnault? The next-gen billionaire at the helm of LVMH watches
Billionaire tax needed to tackle inequalities, says EU research group
Record-breaking 2023 for LVMH
LVMH, the luxury goods powerhouse led by Arnault, reported a record-breaking year in 2023.
The conglomerate’s performance across its prestigious brand portfolio, which includes renowned names such as Louis Vuitton, Christian Dior, Fendi, and Tiffany & Co., witnessed a remarkable surge in revenue, reaching an impressive €86.2 billion for the full year.
This represents a substantial 13% increase over the figures from 2022, significantly surpassing the €85.74 billion forecasted by analysts.
The most substantial revenue growth within the LVMH group was observed in its selective retailing sector, which saw a remarkable 25% increase from the previous year.
This surge was attributed to the outstanding performance of Sephora and the growth of DFS, buoyed by the recovery of international travel.
LVMH’s gross profit reached €59.28 billion, marking a 9.4% increase, while net profit climbed to €15.2 billion, registering an 8% rise compared to 2022.
Bernard Arnault, maintaining a cautious yet optimistic outlook, said, “While remaining vigilant in the current context, we enter 2024 with confidence, backed by our highly desirable brands.”
The French billionaire also expressed expectations for 2024 to be an inspiring and exceptional year, highlighting LVMH’s participation in the Paris 2024 Olympic and Paralympic Games.
The positive sentiment surrounding LVMH was reflected in its stock market performance, with shares surging by 12.81% to €773.10 following the announcement. This substantial increase represented the largest one-day jump since October 2008, propelling Arnault to the pinnacle of the global wealth rankings.
Tesla faces setbacks
On the flip side of this wealth equation is Elon Musk’s Tesla. The electric vehicle giant reported a modest 3.5% increase in fourth-quarter 2023 revenue, reaching $25.2 billion (€23.2 billion), and an annual revenue of $96.8 billion (€89.3 billion), up 15% from 2022.
However, Tesla’s gross profit experienced a significant 15.3% drop to $17.66 billion. Despite Tesla’s net income soaring to $7.93 billion (€7.3 billion), marking a substantial 115% increase, this exceptional performance was largely due to a one-time tax benefit of $5.75 billion.
Looking ahead, Tesla offered a cautious outlook for 2024, anticipating a “challenging” year for the global auto industry and projecting a “material” dip in its own profitability margins. This outlook prompted several Wall Street analysts to revise down their expectations for Tesla, leading to downgrades of the stock.
Following the earnings release, Tesla’s shares declined by 12%, contributing to Elon Musk’s descent to the second spot among the world’s richest individuals.
The stark contrast in the financial fortunes of Bernard Arnault and Elon Musk highlights the volatile nature of wealth in the modern business landscape, where rapid shifts in net worth can occur in a matter of hours, driven by the market performance of their respective empires.
