In less than a year after becoming the world’s first person to be worth more than $300 billion, Elon Musk lost $100 billion with as much pace as he first amassed them. What first took him to the world’s richest spot is exactly what contributed to a reversal in his fortune: Tesla stocks, as Tesla investors are unhappy with some of his actions.
The science and other stuff to know
Much of Musk’s wealth is amassed from his share in Tesla. He is the company’s CEO and its biggest shareholder. But Tesla isn’t Musk’s only claim to fame. He is the founder of SpaceX, which is the first company to achieve the seemingly impossible feat of landing rockets safely back on earth. Tesla is worth well over a trillion dollars, while SpaceX is valued at close to $125 billion.
However, while COVID proved to be a boon for Tesla and Musk, with Musk’s fortune increasing from $25 billion in 2020 to over $300 billion in 2021, the year 2022 has not been kind to him. Musk’s fortune has dropped nearly 35% from $320.3 billion to $209.4 billion since November 2021, and the culprit has been Tesla’s share price.
The major reason for investors getting skeptical is Musk’s off-again, on-again deal to acquire Twitter. Musk sold $31 billion in Tesla stock in the last year to fund his bid to buy and take private Twitter. However, the deal still hasn’t been finalized, and the drama surrounding it is turning off investors, who believe Musk is overpaying for the social network and is selling Tesla stock irresponsibly to fund it, according to Forbes.
Furthermore, with the Twitter deal expected to close soon, fears that Musk will sell more of his shares to finance the deal are causing the value to fall even further.
Musk is one of the brightest minds in the world today. He is making ideas found in science fiction books come to life with his ingenuity, grit, bravado, and of course, his wealth. His projects Starlink, The Boring Company, Neuralink, Open AI, and SolarCity are pushing the very limits of human imagination and possibilities.
While the drop continues, others are more optimistic about Tesla’s prospects. According to Garrett Nelson, an equity analyst at CFRA Research, Tesla “remains one of the market’s strongest earnings growth stories over the intermediate and long term”. Forbes also reported that the record vehicle sales in the most recent quarter are encouraging.
At the end of the day, Musk’s fortune is so enormous that even losing $100 billion was not enough to dethrone him as the world’s richest person.
It is also worth noting that not only Musk, but other billionaires have seen their fortunes plummet, losing as much as $50 billion in a single day in September. In the aftermath of the pandemic, the times are challenging for everyone, with the fear of a recession looming. Moreover, a bad year for Wall Street has gotten even worse, with the stock markets finishing September down by 9 percent. This is its worst September since 2002 when it dropped 11 percent.
On top of all that, the investment market is a fickle being. Investors and shareholders could be unhappy over a certain occurrence one day, but ecstatic over the same incident on another. Musk is a big thinker, and the opinions of others have neither deterred nor dictated him, and the market’s retreat from Tesla is unlikely to hold Musk back.