By Brian Chapatta
Elon Musk was the second person to amass a personal fortune of more than $200 billion, crossing that threshold in January 2021, months after Jeff Bezos.
The CEO of Tesla Inc has now achieved a first: to become the only person in history to have wiped $200 billion from his net worth.
Musk, 51, saw his wealth plummet to $137 billion after Tesla shares fell in recent weeks, including an 11% drop on Tuesday, according to the Bloomberg Billionaires Index. His fortune peaked at $340 billion on November 4, 2021, and he remained the richest person in the world until he was overtaken this month by Bernard Arnault, the French tycoon behind the power plant of the luxury LVMH.
The round number milestone reflects how high Musk soared as asset prices soared in the era of the easy money pandemic. Tesla surpassed a $1 trillion market capitalization for the first time in October 2021, joining ubiquitous tech companies like Apple Inc, Microsoft Corp, Amazon.com Inc and Google parent Alphabet Inc, even though its electric vehicles were only a fraction of the whole. automotive market.
Now, Tesla’s dominance in electric cars, the foundation of its lofty valuation, is under threat as rivals catch up. It is offering US consumers a rare $7,500 discount to take delivery of its two largest models before the end of the year, while also cutting production at its Shanghai factory.
Meanwhile, as pressure on Tesla mounts, Musk is concerned about Twitter, which he acquired for $44 billion in late October. He applied a fast-paced approach, like firing staff and then asking them to come back and applying haphazard content policies to justify banning the accounts of some prominent journalists who cover him.
The drop in Tesla shares has been so steep – shares have fallen 65% in 2022 – and Musk has sold so much this year to help cover his Twitter buy, that they are no longer his main asset, according to the index. of Bloomberg wealth. Musk’s stake in his tightly held Space Exploration Technologies Corp, at $44.8 billion, exceeds his roughly $44 billion position in Tesla stock (he still has options worth an estimated $27 .8 billion dollars). Musk now owns 42.2% of SpaceX, according to a recent filing.
Musk, for his part, dismissed concerns about Tesla and repeatedly took to Twitter to criticize the Federal Reserve for raising interest rates at the fastest pace in a generation.
“Tesla works better than ever! Musk tweeted on Dec. 16. “We don’t control the Federal Reserve. That’s the real problem here. »
The billionaire, who has already borrowed heavily for his stake in Tesla, however recently warned of the dangers of borrowing money in panicked markets.
“I would really advise people not to have debt on margin in a volatile stock market and you know, from a cash point of view, keep the powder dry,” Musk said on the All-In podcast released this month. -this. “You can get some pretty extreme things in a bear market.”