Elon Musk has become the only person in history to erase $200 billion from their net worth.
Musk, 51, has seen his wealth plummet to $137 billion after Tesla shares tumbled in recent weeks, including an 11% drop on Tuesday, according to the Bloomberg Billionaires Index. His fortune peaked at $340 billion on Nov. 4, 2021, and he remained the world’s richest person until he was overtaken this month by Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH.
The round-number milestone reflects just how high Musk soared during the run-up in asset prices during the easy-money pandemic era. Tesla exceeded a $1 trillion market capitalization for the first time in October 2021, joining the likes of ubiquitous technology companies Apple Inc., Microsoft Corp., Amazon.com Inc. and Google parent Alphabet Inc., even though its electric vehicles represented only a sliver of the overall auto market.
Now Tesla’s dominance in electric cars, the foundation of its lofty valuation, is in jeopardy as competitors catch up. It’s offering US consumers a rare $7,500 discount to take delivery of its two highest-volume models before year-end, while also reportedly reducing production at its Shanghai plant.
Meanwhile, with pressure on Tesla intensifying, Musk has been preoccupied with Twitter, which he acquired for $44 billion in late October. He’s applied a move-fast-and-break-things approach such as firing staff then asking them to come back and applying content policies haphazardly to justify banning the accounts of some prominent journalists who cover him.
The decline in Tesla shares has been so steep — the shares fell 65% in 2022 — and Musk has sold so much this year to help cover his Twitter purchase, that they’re no longer his biggest asset, according to Bloomberg’s wealth index. Musk’s stake in his closely held Space Exploration Technologies Corp., at $44.8 billion, exceeds his approximately $44 billion position in Tesla stock (he still has options worth an estimated $27.8 billion). Musk now owns 42.2% of SpaceX, according to a recent filing.
Musk, for his part, has dismissed concerns about Tesla and has repeatedly taken to Twitter to criticize the Federal Reserve for raising interest rates at the fastest pace in a generation.
“Tesla is executing better than ever!” Musk tweeted on Dec. 16. “We don’t control the Federal Reserve. That is the real problem here.”
The billionaire, who has previously borrowed extensively against his stake in Tesla, has though also recently warned against the dangers of borrowed money in panicky markets.
“I would really advise people not to have margin debt in a volatile stock market and you know, from a cash standpoint, keep powder dry,” Musk said in the All-In podcast released this month. “You can get some pretty extreme things happening in a down market.”
He’s probably proud of that ‘record.’