How Tesla & Twitter Played A Role In Elon Musk Becoming World's First Person To Lose $200 Billion Net Worth
Elon Musk has become the only person in history to erase $200 billion from his net worth. Elon Musk has lost $203 billion networth in 14 months, i.e. since November 2021.
A couple of years ago in January 2021, Elon Musk had become the second person ever to have a personal fortune of more than $200 billion, months after Jeff Bezos did that.
And now, as the new year 2023 kicks off, the Tesla CEO has become the only person in history to erase $200 billion from his net worth.
$203 Billion Lost In 14 Months
Reuters
51-year-old Musk has seen his wealth plummet to $137 billion according to the Bloomberg Billionaires Index. Musk's net worth peaked at $340 billion on November 4, 2021, and he remained the world's richest person until he was overtaken last month by Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH. Arnault currently has a net worth of $162 billion.
The $200 billion plummet in net worth reflects just how high Elon Musk had soared during the run-up in asset prices during the easy-money pandemic era.
Also Read: List Of Companies Co-Founded/Headed By Elon Musk
Tesla¡¯s Rise & Fall
Musk¡¯s EV company Tesla exceeded a $1 trillion market capitalization for the first time in October 2021, joining the likes of tech giant Apple., Microsoft Corp., Amazon. and Google parent Alphabet., even though its electric vehicles represented only a sliver of the overall auto market, as per a Bloomberg report.
Currently, Tesla's market cap is down to $385.98 billion.
cnbc/getty
Now, Tesla's dominance in electric cars, which was the foundation of its lofty valuation, too is in jeopardy as competitors are catching up. Tesla, whose shares had witnessed the worst ever year in the form of 2022, is reportedly offering US consumers a rare $7,500 discount to take delivery of its two highest-volume models before year-end, while also reportedly reducing production at its Shanghai plant.
The decline in Tesla shares has been so steep that the shares fell over 65% in 2022, and Musk has sold so much of Tesla stock last year to help cover his Twitter purchase that they're no longer his biggest asset, according to Bloomberg's wealth index. Musk's stake in his closely held SpaceX, at $44.8 billion, exceeds his approximately $44 billion position in Tesla stock (he still has options worth an estimated $27.8 billion). Musk now owns 42.2% of SpaceX, according to a recent filing.
Also Read: Elon Musk Says Tesla Will Be Worth More Than Apple And Saudi Aramco One Day
"Tesla Doing Better Than Ever"
Musk, for his part, has dismissed concerns about Tesla and has repeatedly taken to Twitter to criticize the Federal Reserve for raising interest rates at the fastest pace in a generation.
"Tesla is executing better than ever!" Musk tweeted on Dec. 17. "We don't control the Federal Reserve. That is the real problem here."
Tesla is executing better than ever!
¡ª Elon Musk (@elonmusk) December 16, 2022
We don¡¯t control the Federal Reserve.
That is the real problem here.
The billionaire, who has previously borrowed extensively against his stake in Tesla, has also recently warned against the dangers of borrowed money in panicky markets, as per the Bloomberg report.
tfipost
"I would really advise people not to have margin debt in a volatile stock market and you know, from a cash standpoint, keep powder dry," Musk said in the All-In podcast released this month. "You can get some pretty extreme things happening in a down market."
The Twitter-Musk Saga
Meanwhile, with pressure on Tesla intensifying, Musk has been heavily preoccupied with Twitter, which he acquired for $44 billion in late October 2022.
Reuters
In early November, barely a few days after Musk took over Twitter, his net worth had dropped $9 billion, as per various media reports. And to cover up for the mammoth Twitter deal, Musk has already twice sold Tesla shares post the Twitter acquisition, which contributed to his net worth plummeting.
At the social networking website, Elon Musk applied a move-fast-and-break-things approach such as the mass firing of staff, including Twitter¡¯s ex-CEO Parag Agrawal, then asking some fired employees to come back. He has also been applying content policies haphazardly to justify banning the accounts of some prominent journalists who cover him, the report mentioned.
A Tesla investor had even taken Musk to court, questioning his mammoth $56 billion pay package at Tesla, amidst which he was also termed as a ¡®part time CEO¡¯ of Tesla for being too busy with Twitter¡¯s revamping.
Also Read: Timeline Of Elon Musk-Twitter's $44 Billion Deal
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