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Elon Musk Might Never Again Be World's Richest Person

Elon Musk
Elon Musk (AP)

By    |   Wednesday, 11 January 2023 11:16 AM EST

Elon Musk's days as the world's wealthiest person might be over permanently.

Musk, CEO of SpaceX, Tesla, and Twitter, has a net worth of $129.4 billion. That's down more than $210 billion from its peak, according to the Bloomberg Billionaires Index.

Bloomberg reported that Musk, 51, became the first person in history to have $200 billion wiped out of existance.

Guinness World Records said Musk set the mark for the largest loss of personal fortune in history by losing $182 billion since November 2021, as estimated by Forbes.

A key factor in Musk losing money has been Tesla's sharp decline. The automaker's stock is down 39% since Dec. 1.

The automaker has been cutting prices and offering discounts, something Musk detests, most notably in China's increasingly competitive EV market.

"Is Elon Musk really going to allow this iconic American company to self-destruct?" Stephen Diamond, a law professor at Santa Clara University, asked Bloomberg. "It boggles the mind to see what he's doing right now. With Twitter, he bit off more than he could chew. He's now trapped himself financially."

The title of world's richest person currently belongs to French business magnate Bernard Arnault, with Indian energy magnate Gautam Adani also in pursuit.

Bloomberg said that reasons for Musk's "precipitous fall" begin with his Tesla compensation.

Following 2009 and 2012 awards that bolstered his Tesla stake, Musk received an "unprecedented moonshot package" in 2018. That pay plan, combined with Musk's use of margin loans, "laid the foundation for one of the most explosive wealth creations in history," Bloomberg reported.

Musk's goal for Tesla, at the time, was to grow the electric-carmaker's market value to $650 billion, which was about the worth of Amazon, Alphabet Inc. and Microsoft.

Tesla's stock price then soared, placing the company in the S&P 500 Index by the end of 2020. Musk received 304 million Tesla options with an exercise price of $23.34.

"The 2018 compensation package clearly wasn't enough to keep Elon focused on Tesla," said Kristin Hull, founder of Nia Impact Capital, a social-impact fund based in Oakland, California. "I'd like to get a more clear definition of his role at Tesla. What is the actual role of Tesla's CEO? It's too nebulous right now."

Twitter, which Musk purchased for $44 billion in October, already is valued at less than half of what the CEO paid for it, according to Fidelity Investments. Decreasing advertising revenue and surging borrowing costs are to blame.

Musk's estimated 79% stake, which required him to repeatedly dump Tesla shares to help raise more than $22 billion, is now worth $11.6 billion, Bloomberg reported.

The media outlet said 42% ownership of Space Exploration Technologies Corp. represents the "bedrock" of Musk's fortune.

The value of the rocket launch company, founded in 2002, continues to climb. It recently raised $750 million at a $137 billion valuation, Bloomberg reported.

However, Musk likely can't leverage SpaceX, or his Boring Co. and Neuralink, as aggressively as he can publicly traded Tesla, Bloomberg reported. That's significant because margin loans that raised cash to fund other expensive ventures helped Musk climb up the wealth rankings.

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Elon Musk's days as the world's wealthiest person might be over permanently. Musk, CEO of SpaceX, Tesla, and Twitter, has a net worth of $129.4 billion. That's down more than $210 billion from its peak, according to the Bloomberg Billionaires Index.
elon musk, world, richest, person, tesla, twitter
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2023-16-11
Wednesday, 11 January 2023 11:16 AM
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