It’s a record loss, according to Guinness, which said in a blog post That previous record was set during the tech stock crash of 2000, when Japanese billionaire SoftBank CEO Masayoshi Son reportedly lost $58.6 billion. (That would be approx. $100 billion today, taking into account inflation.)
Musk’s loss comes amid fallout from his $44 billion purchase from TwitterYes, the laid off thousands of workers while wading through exciting political debates. Investors in Tesla, the electric car maker led by Musk, expressed concern that it spends so much time trying to right the ship on Twitter that Tesla is suffering. Tesla stock has lost 39% of its value since December 1. 1, according to at Bloomberg News.
Measuring the net worth of individuals at any given time is a tricky task. Entrepreneurs whose net worth is tied to the value of a particular stock can see huge fluctuations in short timeframes due to external factors such as market conditions or government policy. Musk has in the past lost large sums before recovering and growing his net worth.
But this crisis is partly the work of Musk. He sold significant amounts of his Tesla shares to buy Twitter at a premium, just as the automaker is suffering from increased competition in the electric vehicle market, shortages chips and raw materials, and production delays and missed deadlines. Meanwhile, Musk said he would sleep at the Twitter office in San Francisco “Until the organization is fixed.”
Frustrations with Musk bubbled up in shareholder lawsuits against Tesla, including one filed in 2018 in Delaware which claims a the salary package he got was excessive and alleges that Tesla’s board members did not act independently in approving it.
According to Bloomberg News, SpaceX, Musk’s space manufacturing company, makes up more than 37% of his net worth, and shares of publicly traded Tesla make up about 33%. The rest is made up of shares on Twitter and the Boring businessthe Musk company created to build tunnels in order to relieve urban traffic.
The recent decline in Musk’s net worth is largely due to the drop in Tesla stock value. Musk has repeatedly attributed this to macroeconomic trends, including the Federal Reserve historically. high interest rates in 2022.
In an exchange last month with Twitter and Tesla investor Ross Gerber about the tesla valueMusk tweeted: “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money from stocks to cash, thus causing the stock to fall.”
Still, Musk seemed to tacitly acknowledge investors’ concerns that his investment in Twitter hurts the value of his other projects. “I will ensure that Tesla shareholders benefit from Twitter for the long term,” Musk tweeted in December. He did not provide details.
Musk has been overtaken as the richest person in the world by Bernard Arnault, CEO and chairman of French luxury retail giant LVMH. Arnault’s net worth, as of Thursday, is $182 billion, according to Bloomberg’s Billionaires Index. According to ForbesArnaut and his family are worth $204 billion, while Musk is worth $146.5 billion.
Declines in personal fortune are not unusual at the highest levels of business, particularly in tech, although the scale of Musk’s loss is staggering. As Guinness notes, the man who came closest to losing Musk’s personal fortune, Son, would see his net worth change “up to $5 billion in a day” during the dot-com crash of 2000. Yet today, Son is nowhere near the top of the lists of the world’s richest people: Forbes ranked him 74th in his list of billionaires 2022, and he is 139th on Bloomberg’s Billionaires Index.
But Musk’s fortune could still increase. As Guinness notes, “despite plummeting prosperity, Tesla remains the world’s most valuable automaker, with a market capitalization more than $100 billion greater than that of its closest competitor, Toyota.”
In a notice to investors In December, Goldman Sachs analyst Mark Delaney wrote that he still believed in the “significant value” of “the Tesla brand”, although he acknowledged that it had “become more polarizing” since Musk bought Twitter. He suggested the company should “focus on the consumer connected to Tesla’s return to those core attributes of sustainability and technology” to regain value. In other words: fewer tweets, please.
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