Elon Musk CREDIT: Gilbert Carrasquillo/GC Images
Elon Musk, CEO of Tesla, SpaceX, and Twitter, has suffered a historic loss of wealth over the past year. According to the Bloomberg Billionaires Index, Musk is currently worth $137 billion, making him the second richest person in the world behind LVMH Chairman Bernard Arnault. However, at its peak in November 2021, Musk’s net worth was a staggering $340 billion. This means that Musk is the first person in history to lose $200 billion in wealth.
A significant portion of Musk’s wealth is tied to the success of Tesla, whose stock saw a 65% drop in 2022. This can be attributed to a number of factors, including increased competition from established automakers in the electric vehicle market and weaker demand for Tesla products. The company also missed its growth targets and scaled back production in China, and its fourth quarter deliveries, announced in January, fell short of Wall Street estimates.
To try and boost sales, Tesla offered two rebates to buyers taking delivery of a vehicle before the end of the year, initially offering a $3,750 discount and then doubling the rebate to $7,500 with two weeks remaining in 2022. This move caused concern among investors, leading to a 37% drop in the stock price in December.
Many have long questioned whether Tesla was ever worth the trillion-dollar valuation it received at the beginning of 2022. At its peak, the company was valued at more than the combined value of the 12 largest automakers in the world, despite having a fraction of their sales. As of the end of the year, Tesla’s value was down to $386 billion, still significantly higher than its automotive rivals but a far cry from the tech giants – Apple, Microsoft, Google, and Amazon – with which it was being compared just a year ago.
In addition to the struggles at Tesla, Musk’s $44 billion purchase of Twitter has also had a negative impact on his wealth. As the largest shareholder in Tesla, Musk has sold off $23 billion worth of Tesla shares since his interest in Twitter became public in April. Some investors have criticized Musk’s focus on Twitter, arguing that he should be paying more attention to his significantly larger and more valuable company, Tesla. Musk has defended his actions, stating that he has not missed any major Tesla meetings since taking on responsibility for Twitter.
Despite the challenges of the past year, it is still possible that Tesla’s stock could bounce back and that Musk could once again become the world’s wealthiest person. However, his reputation as a genius has certainly taken a hit in 2022, almost as much as his personal wealth. Musk’s constant tweeting and erratic behavior, particularly after becoming CEO of Twitter, has drawn criticism and concern. He has faced backlash for making controversial statements and spreading misinformation on the platform.
In response to being called out for losing “over $200 billion” from his net worth, Musk gave a cheeky reply on Twitter, writing “Thanks for paying me 8 USD”. It remains to be seen what the future holds for Musk and his businesses, but one thing is certain: it will not be boring.
