The CEO of Tesla and Twitter has seen his fortune slump by $101 billion this year.
Elon Musk has evolved in a world apart.
For more than 10 months he was the only member of the most select financial club on the planet, one that has never welcomed more than two members at the same time.
The Tesla (TSLA) – Get Free Report CEO and owner of microblogging website Twitter was a regular member there for the past few months — until he was ousted a few weeks ago.
This is the $200 billion club. And since he lost his place there, Musk hasn’t been the same.
If the whimsical visionary is still the world’s richest man, his fortune has been dwindling. Musk boasted a fortune of $170 billion as of Nov. 21, according to the Bloomberg Billionaires Index. But his net worth has shrunk by $101 billion, or 37%, this year.
A Thinning Gap (of $13 Billion)
Musk’s position in the top asset spot is now under threat from the French executive Bernard Arnault, the CEO of luxury group LVMH (LVMHF) . Arnault’s fortune is estimated at $157 billion, which puts him only $13 billion behind Musk.
Arnault also has seen his fortune ease but much less sharply than that of Musk. He’s lost $21.3 billion, or 12%, in 2022.
Arnault benefits since the luxury sector is relatively impervious to the economic slowdown and recession concerns. LVMH reported stronger-than-expected third-quarter sales last month, as wealthy customers flocked to its fashion brands and Americans took advantage of the strong dollar to visit its stores in Europe.
Demand for luxury goods remains resilient in the face of sharp inflation. Affluent consumers have been less affected by the higher cost of living while the average consumer has cut back on discretionary spending.
Third-quarter revenue at the owner of Louis Vuitton and Dior amounted to 19.76 billion euros ($20.29 billion), reflecting organic growth (excluding acquisitions) of 19% from a year earlier.
Sales in Europe, the U.S. and Japan have risen sharply this year due to solid demand from local customers and the resumption of international travel.
Musk, on the other hand, is hurt by the continued decline in Tesla shares, which constitute a large part of his fortune.
Since the billionaire made his $44 billion bid to acquire Twitter, the electric-vehicle maker’s shares have steadily fallen in value. That’s because investors worry that the social network will distract him when Tesla faces fierce competition from Chinese automakers and legacy carmakers.
The resurgence of covid-19 in China and fears surrounding the tech sector in an inflationary environment also pose challenges for Tesla.
Tesla Stock Has Lost More Than Half Its Value
Tesla stock has fallen nearly 50% to $167.87 since Musk launched his takeover bid on April 25, translating into a $525 billion drop in market capitalization. Since the billionaire finalized the Twitter deal on Oct. 27, Tesla stock has lost 25%, a loss in market value of $180 billion in less than a month.
Overall, Tesla stock is down 52.4% this year. Musk’s early decisions caused chaos at Twitter, making it even more difficult for him to turn the platform profitable as soon as possible since he took on $13 billion in personal debt to finance the transaction.
He carried out waves of job cuts, gave an ultimatum to employees, and reactivated the account of former President Donald Trump, whom the social network had banned after the events of Jan. 6, 2021 on Capitol Hill. All this resulted in the departure of 5,000 employees, or two-thirds of the workforce.
The serial entrepreneur recently admitted that since taking over Twitter, he hardly sleeps.
“I have too much work on my plate, that’s for sure,” Musk said at a Nov. 14 appearance at B20 Indonesia, a business conference running alongside the G20 summit in Bali. “I’m working the absolute most that I can work — morning to night, seven days a week.”
A few days earlier Musk had told attendees at the 29th annual Baron Investment Conference that his workload has increased from 70 hours a week to 120.
Others Among the World’s Richest
The Indian executive Gautam Adani is the world’s third-richest person, with a net worth of $130 billion, up $53 billion since January.
Amazon (AMZN) – Get Free Report founder and Executive Chairman Jeff Bezos is fourth with $116 billion, down $76.7 billion since the start of the year.
Microsoft (MSFT) – Get Free Report co-founder Bill Gates is the fifth-richest person in the world with a fortune estimated at $113 billion. His wealth has shrunk by $25.3 billion in 2022.
The top 10 include three other tech tycoons: Larry Ellison, co-founder of Oracle (ORCL) – Get Free Report, has a fortune of $92.5 billion, down $14.6 billion. He’s ranked seventh. Larry Page, co-founder of Alphabet (GOOGL) – Get Free Report, is eighth with $88.7 billion, down by $39.7 billion. And Steve Ballmer, former CEO of Microsoft, is 10th with a fortune of $86.3 billion, down by $19.3 billion.
The legendary investor Warren Buffett is the sixth richest person in the world. He is worth $109 billion, down $406 million. And the Indian billionaire Mukesh Ambani is ninth. His fortune is estimated at $88.2 billion, down $1.79 billion since January.
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