The Tesla CEO has seen his wealth tumble in recent weeks after shares of the electric car maker tumbled.
Elon Musk
Photographer: Liesa Johannssen-Koppitz/Bloomberg
December 31, 2022 at 4:53 AM GMT+7
Elon Musk was
the second person ever to amass a personal fortune of more than $200 billion,
breaching that threshold in January 2021, months after Jeff Bezos.
The Tesla Inc. chief executive officer has
now achieved a first of his own: becoming the only person in history to
erase $200 billion from their net worth.
Musk, 51, has seen his wealth plummet to $137 billion
after Tesla shares tumbled in recent weeks, including an 11% drop on
Tuesday, according to the Bloomberg Billionaires Index. His fortune peaked at $340 billion on Nov. 4, 2021, and he
remained the world’s richest person until he was overtaken this month by Bernard Arnault,
the French tycoon behind luxury-goods powerhouse LVMH.
The round-number milestone reflects just how high Musk soared during the run-up in asset prices during the easy-money pandemic era. Tesla exceeded a $1 trillion market capitalization for the first time in October 2021, joining the likes of ubiquitous technology companies Apple Inc., Microsoft Corp., Amazon.com Inc. and Google parent Alphabet Inc., even though its electric vehicles represented only a sliver of the overall auto market.
Now Tesla’s dominance in electric cars, the foundation of its
lofty valuation, is in jeopardy as competitors catch up. It’s
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.
Meanwhile, with pressure on Tesla intensifying, Musk has
been preoccupied with Twitter, which he acquired for $44 billion in late
October. He’s applied a move-fast-and-break-things approach such as firing
staff then asking them to come back and applying content policies haphazardly
to justify banning the accounts of some prominent journalists who cover
him.
The decline in Tesla shares has been so steep — the shares fell
65% in 2022 — and Musk has sold so much this 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 Space Exploration Technologies
Corp., 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.
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. 16. “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 though also recently warned against
the dangers of borrowed money in panicky markets.
“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.”
— With assistance by Jack Witzig
https://www.bloomberg.com/news/articles/2022-12-30/elon-musk-becomes-first-person-ever-to-lose-200-billion
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