Elon Musk becomes the first person to lose $200 billion
Elon Musk, the man who for the most part of 2022 was the richest person on the planet, now has a new tag, the first man to lose $200 billion of personal fortune, Bloomberg reported. Luckily, Musk had amassed enough in 2021 to remain the world's second-richest person when 2023 dawned.
Musk's personal fortune is largely tied to his holdings in different companies that he owns and founded over the years. In 2021, the stock of Tesla soared alongside technology stocks whose business remained unaffected by the pandemic. Musk became the first person to amass over $300 billion of personal worth as Tesla stock prices soared to their lifetime highs.
However, the dawn of 2022 brought the revival of other businesses, and Tesla's valuation began to dip. Unlike Sam Bankman-Fried, whose fortune crashed in just a week, Musk's has been on the decline for 2022, making it a year to forget for him.
Federal policy, Musk sell-off hurts Tesla
In October 2021, Tesla's market valuation exceeded a trillion dollars, putting the electric-vehicle maker in the august company with Apple, Microsoft, and Amazon. However, with the U.S. facing record inflation, the U.S. Federal Bank stepped in and began hiking interest rates to temper the demand and rein in rising prices.
Tesla, which made record deliveries in 2021 and is expected to confirm higher numbers in 2022, will see its deliveries shrink in 2023 as borrowing money becomes more expensive and people put off buying new cars till economic conditions improve. Even Musk tweeted about this last month.
Tesla is executing better than ever!— Elon Musk (@elonmusk) December 16, 2022
We don’t control the Federal Reserve.
That is the real problem here.
Amidst all this, Elon Musk set his eyes on the social media site Twitter and funded his purchase by selling Tesla stock. The market perceived this move as Musk's prioritizing Twitter over the EV-making Tesla and went bearish on the stock, finally resulting in a 65 percent decline in stock value in 2022.
Musk's fortunes, heavily dependent on Tesla stock price, also dipped during the year and exceeded $200 billion as 2022 came to a close.
Musk's most prized assets
That Tesla is in trouble also became evident when the company began offering its customers in the U.S. a rare $7,500 discount before the year wound up. Musk, who had been lamenting about the impact of lockdowns on production capacities in the past two years, has now ordered a reduction in production at his Shanghai plant.
The slide in Tesla's valuation also makes Musk's other company, Space Exploration Technologies Corp., popularly known as SpaceX, his most valuable asset. After Musk has sold off chunks of his Tesla shares, his remaining stock at current market prices value at up to $44 billion, while his stake in SpaceX is further up at $44.8 billion.
His recently acquired asset, Twitter, is valued at $20 billion, less than half what Musk paid just a couple of months ago. Musk needs to unlock the potential of the social media site quickly if he does not want to slip down further on the world's richest list.
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