SUSANA BATES / AFP
Weighted down by Tesla’s annual results and its thunderous takeover of Twitter, Elon Musk’s fortune melted like snow in the sun in 2020.
ECONOMY – Elon Musk’s fortune has melted like snow in the sun. At 51, the new head of Twitter will have known everything financially. After Jeff Bezos, Elon Musk has now set a new record by becoming the second person to reach the symbolic bar of $200 billion in personal wealth.
According to the American chain Bloomberg, the CEO of Tesla is now the only person in the world who has lost almost 200 billion dollars. Based on data from the Bloomberg Billionaires Index, which groups the daily ranking of the 500 richest people in the world (according to their net worth), the media claim that Elon Musk saw his fortune drop to $137 billion after a dark year for Tesla.
As of November 4, 2021, the multibillionaire’s personal fortune still topped $340 billion, making Elon Musk the richest person in the world. Before he was overtaken in December 2022 by the Frenchman Bernard Arnault, at the head of the world’s leading luxury group LVMH. Bernard Arnault is today the owner of a fortune estimated at 162 billion dollars according to the Bloomberg Billionaires Index.
The shadow of the Twitter takeover
To explain the reasons for this unprecedented decline, it is impossible not to dwell on the latest stock market data for the Tesla brand. On Wall Street, the automaker has actually lost two-thirds of its stock market value by 2022 due to fears about the demand for electric vehicles, not to mention the consternation generated by the entrepreneur’s travails after the takeover of Twitter.
The manufacturer has yet to increase its shipments by 45% during the first three quarters, despite supply problems, and generated almost $9 billion in profit during this period, despite sharply increasing expenses. But it is still below the long-term target of increasing deliveries by 50% per year.
And while Tesla still largely dominates the US market with 65% market share in the first nine months of the year, that’s much less than the 79% in 2020, and that number should drop to less than 20% by 2025. , analysts at S&P Global.
On Tuesday, December 27, Tesla’s stock market share fell again (-11%), the latest in a long series for the company in 2022. Especially since the shadow of Twitter, bought for $44 billion by Elon Musk at the end of October, hangs still. Tesla needs one “leader who can guide him through the storm” and not a boss “who focuses on Twitter”assesses Dan Ives of Wedbush in another note published at the end of 2022.
Loss of credibility with investors
For this famous takeover, the multibillionaire first sold several billion dollars of Tesla shares to finance the purchase and then the operating costs of his new toy, and sold again for 3.6 billion in early December, when in the spring he had claimed that the Not intending to sell any more.
Elon Musk has also taken the social network into turmoil, firing half of the employees, authorizing the return of suspended internet users like Donald Trump or banishing journalists for still unclear reasons. “Musk has lost all credibility with the investment community”says Dan Ives, referring to “Broken Promises” on share sales, “The Twitter Fiasco” and “political controversies” on the platform.
He stayed “unsustainable” evaluating Tesla without taking into account Elon Musk’s erratic management of Twitter, there is plenty in a recent note by Colin Rusch of Oppenheimer. But in defense of the South African-born entrepreneur, Tesla’s stock has also suffered from the general decline in stock markets this year. In a conversation on Twitter in mid-December, Elon Musk also acknowledged that rising interest rates and the economic situation would likely slow demand for Tesla. But “I still continue to predict that Tesla will be the highest valued company in the world in the long term”he said.
On Wednesday, in a message to employees of the company, consulted by the CNBC channel, he urged them not to “not worrying too much about the madness of the stock market”. It should be said that the group’s share had increased by more than 700% in 2020, then by 50% in 2021. And if it recovered almost 13% during the last three days of the year, it was still down 65% in compared to the whole of 2022.
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