The 12 months Elon Musk noticed his fortune shrink by $132 billion
- December 30, 2022
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Amid the widespread fall in company stocks in the United States, most billionaires watched their fortunes shrink in 2022. But the magnitude of Elon Musk’s fall calls attention: US$ 132 billion. It is true that the greater the equity, the greater the fall.
The owner of Tesla, SpaceX and now Twitter started 2022 as the richest man in the world. But he lost the post to Frenchman Bernard Arnault, from the LVMH group, the largest luxury goods company in the world, owner of brands such as Christian Dior, Louis Vuitton, Moët & Chandon and Givenchy.
Arnault, according to the Bloomberg Index Billionairehas an estimated fortune of US$ 159 billion, even having observed a shrinkage of US$ 18.9 billion in 2022.
Musk is now in second place, with an estimated fortune of US$ 132 billion, that is, almost 50% less than at the beginning of this year. Among the 20 richest people in the world, the owner of Tesla is the one who lost the most in 2022.
What explains such a huge drop? Below are some explanations for the fact that Musk became “poorer” in 2022:
1 – Drop in the value of shares of technology companies
In a year in which it is difficult to find companies that saw their shares rise, the shares of technology companies were the ones that suffered the most on the US stock exchange. So much so that the billionaires who lost the most money are concentrated in this sector.
After Musk, who lost the most was Jeff Bezos, the founder of Amazon, who saw his fortune shrink by US$ 88 billion. Google founders Larry Page and Sergey Brin also watched their net worth decline by $44 billion each in 2022. Microsoft co-founder Bill Gates, the fourth richest, lost $28 billion.
The fall comes amid a correction in the value of the main technology assets and in the wake of rising interest rates in the United States, the war in Ukraine and the end of the effect of the pandemic, which made online services grow at an accelerated pace.
2 – The fall of Tesla
Amid the correction of stocks, electric car maker Tesla, Musk’s main asset, was one of the hardest hit. The company, which was worth more than $1 trillion in 2022, is now valued at $357 billion. On the year, stocks are down nearly 70%.
The drop can be explained by several reasons. One of them is the biggest competition in the electric car sector. In particular, by traditional automakers, such as the American GM and Ford and the German Volkswagen. Another reason is the fact that Musk is dedicating more time to Twitter, in a management full of controversies (more on the topic below).
And, finally, specific market issues, which are affecting the company. The most recent of these is the closure of Tesla’s factory in Shanghai, China, due to the growth of Covid cases in the Asian country. This Tuesday, December 27, Tesla shares are down by more than 8%.
3 – Twitter
Since buying Twitter for $44 billion in October this year, Musk has sold $7.4 billion worth of Tesla stock to fund the acquisition. The first sale took place in November, when it disposed of a lot worth US$ 3.9 billion. In December, in a new tranche, it sold US$ 3.5 billion.
According to the newspaper The Wall Street Journal, Musk began to step up sales in November last year, when the company’s shares peaked. Since then, it has sold more than $39 billion
On Twitter, Musk is at the head of a turbulent management in which he fired more than half of the employees, announced and went back after new features and did a search on the social network to decide whether or not he would be in charge of the business.
The majority of Twitter users decided that Musk should step down from the helm of the company. The billionaire says he is going after a CEO for the social network.