Elon Musk has lost $100 billion of personal fortune in 2022
Elon Musk, who broke records of personal wealth last year as the stock of his electric vehicle company Tesla soared, now has another record to his name. With Tesla's stock price continuing its decline in 2022, Musk's fortune has dropped by over $100 billion this year, Bloomberg reported.
Musk's worth is mainly tied to his stock holding in Tesla, which according to recent estimates, now stands at around 14 percent. The CEO began offloading Tesla stock last year as the stock price soared and reached an all-time high of $402.
Earlier this year, as Musk moved to take over the social media site Twitter, he also sold some stock to raise part of his $44 billion offer. Musk would have probably reached the unfavorable milestone much earlier had he held on to millions of additional Tesla shares.
Why is Tesla stock tumbling?
Although an electric vehicle maker, Tesla is mainly considered a technology company on Wall Street. As the fear of an economic slowdown looms, tech stocks have taken a beating, and Tesla was not immune to this development. While the tech-heavy Nasdaq 100 Index has dropped 29 percent this year, at 52 percent this year, Tesla's stock price drop is significantly more.
Part of the decline can be attributed to Tesla's reliance on China for producing its electric cars and components and the country's refusal to budge from its 'zero-COVID' policy. Even today, parts of China are in complete lockdown following a rise in cases, and supply chain issues arising from such actions are severely affecting Tesla's performance.
However, Musk's Twitter takeover and assuming the position of CEO have fuelled fears that the world's richest man is spreading himself too thin. With Twitter on his plate, Musk is now the CEO of five companies, which translates into lesser time spent at Tesla.
Reviving Tesla's stock price
On Monday, as Tesla stock hit $167.87, the company recorded its lowest price since November 2020 and sent Musk's fortunes down by $8.6 billion. According to Bloomberg's Billionaire Index, Musk is now worth $157 billion, just $13 billion more than Bernard Arnault, the chairman, and CEO of the luxury products group Louis Vuitton.
Musk may not be very bothered to stay on top of the world's richest person list. However, Tesla stockholders want the price to rise again and have even begun a campaign asking the Tesla board to buy back the stock from the market.
According to Electrek's report, doing so will demonstrate that the company is confident about its future results and believes the stock is currently undervalued. Musk spoke about a potential buyback about a month ago, but the Board does not seem to have decided yet.
The other thing, Musk could possibly do is reduce Tesla's dependence on him to lead the way. As Interesting Engineering recently reported, Musk has identified a successor at Tesla, and if Musk is going to spend a lot of time tinkering with Twitter, then it would be wise to hand over Tesla to a CEO who can dedicate all his time and attention to the task.