Elon Musk Is No Longer the World’s Richest Person, Falls Behind Bernard Arnault
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Elon Musk Is No Longer the World’s Richest Person, Falls Behind Bernard Arnault

Tesla CEO trails the European mogul on the wealth rankings amid a slump in the car maker’s shares

By JOSEPH DE AVILA
Thu, Dec 15, 2022 8:00amGrey Clock 3 min

Elon Musk is no longer the world’s richest person.

Mr. Musk, the Tesla Inc. chief executive and new owner of Twitter Inc., gave up the unofficial title Tuesday to European mogul Bernard Arnault for Earth’s wealthiest individual, according to Bloomberg, which publishes a ranking of the richest people in the world. A prolonged slump in Tesla’s stock has wiped out more than $100 billion of Mr. Musk’s net worth this year.

The net worth of Mr. Musk, who claimed bragging rights as the wealthiest person in January 2021, is valued at $163.1 billion as of Tuesday morning, according to Bloomberg. He now trails Mr. Arnault, the chairman and chief executive of luxury conglomerate LVMH Moët Hennessy Louis Vuitton, whose personal wealth is estimated at $170.6 billion.

Tesla didn’t respond to a request for comment. An LVMH spokesman declined to comment.

When Mr. Musk first reached the pinnacle of the Bloomberg Billionaires Index almost two years ago, he overtook Amazon.com Inc. founder Jeff Bezos, driven by a meteoric rise in the value of Tesla. The car maker’s shares have fallen sharply this year, though, amid concerns about demand. Mr. Bezos has also fallen in the wealth ranks and is now the fifth-richest person, largely reflecting a drop in Amazon’s stock amid recession fears. Mr. Bezos has said he plans to give away most of his fortune to charity.

For many executives and founders, their net worth is at least partially tied up in shares of their businesses. That means volatility in stocks and other holdings can sway their measures of wealth. Establishing their exact net worth can also be tricky, in part because many of their holdings are private.

Mr. Musk is compensated in stock awards as Tesla’s CEO and doesn’t accept a cash salary from the electric-car company. He has accumulated most of his wealth in recent years as Tesla has turned profitable.

Photos: Elon Musk Buys Twitter. Here’s How He Made His Fortune

In January 2020, Mr. Musk’s net worth was valued at about $28 billion, according to Bloomberg. As Tesla’s stock soared, so did Mr. Musk’s wealth, which peaked at $336 billion in November 2021. He has lost more on paper this year than any other billionaire, according to Bloomberg.

Mr. Musk, a serial entrepreneur, runs rocket company SpaceX, formally known as Space Exploration Technologies Corp. He also founded Boring Co., an underground tunnel business, and neuroscience startup Neuralink Corp. In October, Mr. Musk acquired Twitter for $44 billion. He has sold some Tesla stock this year at least in part to fund the Twitter deal, including selling $4 billion worth of shares last month.

It has been a rocky period for Twitter since Mr. Musk took ownership. He fired about half the staff, and the social-media company has seen waves of people leaving. It suffered “a massive drop in revenue” and was losing $4 million a day, he said soon after buying the business. Mr. Musk has said he aimed to make Twitter less dependent on advertising revenue that accounted for about 90% of sales, though efforts to introduce a paid subscription service have suffered repeated delays. He later said bankruptcy is a possibility for Twitter.

Mr. Arnault’s wealth, meanwhile, is largely tied up in the luxury empire LVMH.

A businessman from Northern France, Mr. Arnault bought the storied French fashion house Dior out of bankruptcy in the 1980s and then used it to amass a stake in LVMH. This shareholding structure remains in place today: the Arnaults own more than 97% of Dior, which in turn owns 41% of LVMH. The family also owns close to 7% of LVMH directly, with total voting rights of well above 50%.

Like some of his peers, Mr. Arnault went on a spending spree over the past three decades, allowing him to build economies of scale in advertising, shop leases and department-store space between his dozens of brands.

Ultimately, Mr. Arnault came out on top in a bruising race to become the biggest in the industry, earning the nickname “the wolf in cashmere” for the way he pursued acquisitions. LVMH’s wines-and-spirits division houses Dom Pérignon champagne and Hennessy cognac. Its fashion and leather goods unit includes brands like Loewe, Celine and Fendi, while the conglomerate also owns American jeweller Tiffany & Co. and watchmaker TAG Heuer.

Having gone on a tear since 2015, the luxury industry also has held up better than most this year. LVMH reported strong revenue in the most recent quarter as wealthy consumers continued to spend freely on luxury goods despite the uncertain economic backdrop.

Indian industrialist Gautam Adani is currently the third-richest person in the world, according to Bloomberg. Mr. Adani is the chairman of his namesake Adani Group, an India-based conglomerate involved in initiatives including green energy, power and gas distribution. His push into green energy comes as Indian Prime Minister Narendra Modi has stressed development for infrastructure and renewable energy. Shares of Mr. Adani’s publicly traded businesses have risen this year.

Mr. Adani is the first person from Asia who has ranked this high on Bloomberg’s wealth index, long dominated by U.S. tech entrepreneurs. Earlier this year he became a centibillionaire, with his net worth exceeding that of Warren Buffett.



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How the Middle East Became the Latest ‘Gold Rush’ in Marketing

The Middle East is set to be the fastest-growing marketing region in the world, driven by momentum in countries such as Saudi Arabia

By MEGAN GRAHAM
Tue, Jun 18, 2024 5 min

Saudi Arabia’s fledgling advertising industry and continued growth in the sector in the United Arab Emirates are helping to make the marketing business in the Middle East the fastest-growing in the world.

Ad spending in the Middle East is projected to increase 8.1% to $6.6 billion this year, up from 3.5% last year, according to advertising research firm WARC.

That expansion is building from a much smaller base than in many other ad markets. The Netherlands alone will generate $6 billion in ad spending in 2024, up about 2.3%, WARC said. But it is also enough to outpace every other region in 2024, the firm said.

“It reminds me almost of the gold rush,” said Reda Raad , chief executive of TBWA\Raad Group, an ad agency based in Dubai, in the United Arab Emirates, that is part of the U.S.-based ad holding company Omnicom Group . “I don’t think we’re going to see this type of growth again in our lifetime.” TBWA\Raad has won eight new clients over the past year, with an increase in head count of 17% to accommodate the new work, Raad said.

Some international brands have long maintained a presence in the region. PepsiCo has considered the area a strategic market for decades, said Karim Elfiqi , senior vice president and chief marketing officer at PepsiCo Africa, Middle East and South Asia. Sponsorship deals with local stars such as Mohamed Salah , a soccer player from Egypt, “are a testimony of how over time, we have been part of the cultural fabric of the region,” Elfiqi said.

Other major brands have formed a more recent focus on the Middle East. The Lego Group opened a Middle East and Africa headquarters in Dubai in 2019, citing the size of the region’s young population. That office has developed work such as a Ramadan-themed campaign that ran in the U.A.E. and Saudi Arabia, among other locations.

‘Massive growth’

The Middle East’s ad market has lagged behind regions such as North America and Europe partly because of stricter cultural norms and regulations that affected business, as did a more limited media landscape and economic instability, according to Raad.

But marketing growth in the region is now being driven in part by newfound marketing interest in Saudi Arabia, where ad spending this year is expected to reach $2.1 billion, nearly double its level in 2019, according to WARC. Growth is also coming from the U.A.E., whose ad market is expected to reach $1.7 billion in 2024. Smaller contributors include Qatar and Kuwait.

The landscape has changed now because of economic diversification, increased connectivity and a move into the digital world, leading international brands to enter and invest in campaigns tailored to the region, Raad said.

Four years ago, Saudi Arabia made up a small proportion of business at Lightblue, a creative experience and tech agency based in Dubai. These days, 40% of its business comes from the country, says co-founder David Balfour , who opened an office in Riyadh last month as a result.

“The conversation used to be, ‘We’re going to do this in Dubai.’ Now, it’s ‘We’re going to do this in Dubai—and in Saudi.’” Balfour said. “We’re seeing massive growth in that region.”

There have been speed bumps. As government spending reaches huge levels , Saudi Arabia experienced a rare economic contraction in 2023.

But the country’s efforts to expand its economic pursuits beyond oil have led to the creation of new brands, which are seeking the help of marketing agencies to get the word out.

Marketers in the region are seeking help to stay on-trend in areas such as generative artificial intelligence and social media, said Greg Paull , principal of R3, a consulting firm that helps match advertisers with agencies.

“U.A.E. has been a magnet for the region for 20 years as more investment has come in—but with the new leadership in Saudi since 2017 [when Mohammed bin Salman was named crown prince ], this market has gone through remarkable growth,” Paull said.

Saudi Arabia has faced criticism for its human-rights record under the crown prince, the day-to-day ruler of the kingdom, especially over the 2018 killing of dissident journalist Jamal Khashoggi and the more recent jailing of women’s rights activists.

Mohammed has outlasted the international isolation that followed Khashoggi’s killing, however, and continues to pursue an economic diversification plan dubbed Vision 2030. The country last year unveiled plans for a new international airline called Riyadh Air, is investing billions of dollars to build its tourism and videogame industries, and in March hosted a golf tournament in Jeddah under the auspices of LIV Golf, the Saudi-backed league that has both challenged the PGA Tour and struck a deal to unify with it.

Changing tides

Vision 2030 also calls women’s empowerment a top social priority and seeks to increase the country’s employment rate of women.

Nada Hakeem , CEO and co-founder of Saudi creative agency Wetheloft, said the perceptions of hardships for women in the marketing and advertising industry are outdated and inaccurate.

“As a Saudi woman who founded my company in 2012, I’ve always felt supported by the creative community and the industry as a whole,” Hakeem said. “While every society may have its challenges, I can confidently say that these challenges have not hindered our growth.”

A progression of new laws, policies and incentives are making the industry in Saudi Arabia more inclusive and supportive for women, she added.

In certain parts of the Middle East, “absolutely, it’s still challenging, but they are making the right strides, and they have the right quotas and ambitions in place,” said Rebecca Bezzina , CEO for the EMEA region at R/GA, an agency owned by Interpublic Group of Cos.

“They’ve got wealth, they’ve got world-class ambition, world-class budget. They’re not shy of doing things in the right way,” Bezzina added, speaking of the region overall. “But they still have a talent shortage, especially from a creative and design and product point of view. So often what we’ve found our success has been that they’ve come to us and said, ‘Oh, we want a world-class agency to help us launch this new venture or do this new brand.’”

R/GA said it sees 69% more requests for agency work from marketers in the region today than it did five years ago. It recently handled a brand redesign for Banque Saudi Fransi, which wanted to reaffirm its Saudi roots with a modern identity, and created Weyay, the brand for a new digital bank from the National Bank of Kuwait.

The agency hasn’t notably increased its regional workforce, but it has made changes to facilitate working across Europe and the Middle East.

Other Western players are making moves to capture a piece of the growth. Advertising giant WPP has long worked in Saudi Arabia through units such as Ogilvy and GroupM, but in 2021 established a joint venture with a local company to create ICG Saudi Arabia, a communications and media company based in Saudi Arabia. Ad holding company Stagwell opened new offices for its media agency Assembly in Riyadh in 2021 and in Cairo in 2022.

Regional hospitality

Some executives said certain facets of business dealings in the Middle East are different than in other parts of the world.

Bertrand Morin, a group account director for R/GA who is based in London and works often with Middle Eastern clients, said he spends much more time speaking about personal lives and families with those clients than those in the U.K. or U.S. He has been invited to Middle Eastern clients’ homes to join their families for dinner, something that has never happened with clients elsewhere.

But others say it can feel surprisingly familiar.

Balfour, the Lightblue co-founder, said he was struck by the number of ad-agency workers recently having dinner at the Riyadh location of steakhouse chain Beefbar, and the scene’s similarity to far-off locations.

“The staff are from everywhere in the world. The service and the food is unbelievable. There’s a DJ playing,” Balfour said. “Apart from not having alcohol, you could be anywhere in the world.”

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