That’s a record loss, according to Guinness, which said in a blog post that the previous record was set during the tech stock crash in 2000, when Japanese billionaire Masayoshi Son, CEO of SoftBank, lost $58.6 billion. (That would be about $100 billion today, accounting for inflation.)
Musk’s loss comes amid fallout from his $44 billion purchase of Twitter, where he has laid off thousands of workers while wading into difficult political debates. Investors in Tesla, the electric car maker Musk runs, have expressed concern that he is spending so much time trying to right the ship on Twitter that Tesla is suffering. Tesla shares have lost 39 percent of their value since December 1, according to Bloomberg News.
Measuring individuals’ net worth at any given time is difficult. Entrepreneurs whose net worth is tied up in the value of a particular stock may see large fluctuations within short time frames due to external factors such as market conditions or government policies. Musk has previously lost significant amounts of money before recovering and rebuilding his net worth.
But this crisis is part of Musk’s own creation. He sold significant amounts of his Tesla stock to buy Twitter at a premium, just as the automaker suffers from increased competition in the electric car market, shortages of chips and raw materials, and production delays and missed deadlines. Meanwhile, Musk has said he will sleep in Twitter’s San Francisco office “until the organization is fixed.”
Frustrations with Musk have bubbled over into shareholder lawsuits against Tesla, including one filed in 2018 in Delaware that allegations that a pay package he secured was excessive and alleges that Tesla’s directors did not act independently in approving it.
The battle to dethrone Tesla is heating up just as Musk is being distracted by Twitter
According to Bloomberg News, SpaceX, Musk’s space production company, accounts for more than 37 percent of his net worth, and shares in publicly traded Tesla account for about 33 percent. The rest consists of shares in Twitter and the Boring Company, the company Musk created to build tunnels with the aim of relieving city traffic.
The recent decline in Musk’s net worth has been largely due to the falling value of Tesla stock. Musk has repeatedly attributed this to macroeconomic trends, including the Federal Reserve’s historically high 2022 interest rates.
In an exchange last month with Twitter and Tesla investor Ross Gerber re the value of TeslaMusk tweeted, “When bank savings account rates, which are guaranteed, begin to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks and into cash, causing stocks to fall.”
Still, Musk appeared to tacitly acknowledge investors’ concerns that his investment in Twitter detracts from the value of his other projects. “I want to make sure Tesla shareholders benefit from Twitter for the long term,” Musk tweeted in December. He did not provide details.
Musk was overtaken as the world’s richest person by Bernard Arnault, CEO and chairman of the French luxury retail giant LVMH. Arnault’s net worth, as of Thursday, is $182 billion, according to Bloomberg’s Billionaires Index. According to Forbes, Arnaut and his family are worth $204 billion, while Musk is worth $146.5 billion.
These tech moguls lost a combined $433 billion this year
Personal declines in fortunes are not uncommon at the highest levels of business, especially in technology — though the scale of Musk’s losses is staggering. As Guinness notes, the man who came closest to Musk’s personal fortune loss, Son, would see his net worth change “by as much as $5 billion in one day” during the dot-com crash of 2000. Yet today, Son is nobody places near the top of the lists of the world’s richest people: Forbes ranked him 74th on its 2022 billionaires list, and he is 139th on Bloomberg’s Billionaires Index.
But Musk’s fortunes could still rise. As Guinness notes, “despite the decline in prosperity, Tesla remains the most valuable car company in the world, with a market capitalization of over $100 billion greater than its nearest competitor, Toyota.”
In a note to investors in December, Goldman Sachs analyst Mark Delaney wrote that he still believes in the “significant value” of “Tesla’s brand,” although he acknowledged that it has “become more polarizing” since Musk bought Twitter. He suggested that the company should have a “consumer focus tied to Tesla’s shift back to these core attributes of sustainability and technology” to regain value. In other words: Less tweeting, please.