Tesla CEO Elon Musk’s fortune has plummeted in recent weeks as the company’s stock has dropped.
Elon Musk became the second person in history to amass a personal fortune of more than $200 billion, surpassing Jeff Bezos in January 2021.
The CEO of Tesla Inc. has now set a new record by becoming the first person in history to have their net worth reduced by $200 billion.
Musk’s fortune has dropped to $137 billion as Tesla shares have fallen in recent weeks, including an 11% drop on Tuesday, according to the Bloomberg Billionaires Index. On Nov. 4, 2021, his fortune peaked at $340 billion, and he remained the world’s richest person until this month, when he was surpassed by Bernard Arnault, the French tycoon behind luxury goods powerhouse LVMH.
The round-number milestone reflects Musk’s ascension during the asset price run-up during the easy-money pandemic. Tesla’s market capitalization surpassed $1 trillion for the first time in October 2021, joining the ranks of ubiquitous technology companies Apple Inc., Microsoft Corp., Amazon.com Inc., and Google parent Alphabet Inc., despite the fact that its electric vehicles represented only a sliver of the overall auto market.
Tesla’s dominance in electric vehicles, which is the foundation of its lofty valuation, is now under threat as competitors catch up. It is offering a $7,500 discount to US customers who order one of its two highest-volume models before the end of the year, while also reducing production at its Shanghai plant.
Meanwhile, as the pressure on Tesla mounts, Musk is preoccupied with Twitter, which he purchased for $44 billion in late October. He’s used a break-things-fast approach, such as firing staff and then asking them to return, and haphazardly applying content policies to justify blocking the accounts of some prominent journalists who cover him.
According to abc13.com, Tesla shares have dropped 65% in 2022, and Musk has sold so much this year to help cover his Twitter purchase that they are no longer his largest asset. Musk’s stake in Space Exploration Technologies Corp., valued at $44.8 billion, exceeds his roughly $44 billion position in Tesla stock (he still has options worth an estimated $27.8 billion). A recent filing shows Musk now owns 42.2% of SpaceX.
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Musk, for his part, has dismissed Tesla concerns and has taken to Twitter several times to criticize the Federal Reserve for raising interest rates at the fastest rate in a generation.
“Tesla is working harder than ever!” Musk tweeted on December 16th. “We do not have control over the Federal Reserve. That is the true issue here.”
The billionaire, who has previously borrowed heavily against his Tesla stake, has recently warned against the risks of borrowing money in panicked markets.
“I would really advise people not to have margin debt in a volatile stock market and, you know, keep the powder dry from a cash standpoint,” Musk said in the All-In podcast, which was released earlier this month. “Some pretty extreme things can happen in a down market.”