In early November 2021, just 13 short months ago, Elon Musk was sitting on top of the world with a net worth of $340 billion. Back then, not only was Elon the first person in modern history to have a net worth crack $300 billion (without having to adjust for inflation), but at $340 billion he was the richest person in modern history, topping John D. Rockefeller’s century-old inflation-adjusted fortune. Elon’s net worth receded slightly over the next two months, but he still managed to end 2021 with a fortune of $270 billion. That was $80 billion more than Jeff Bezos’ $190 billion end-of-year net worth.
As you may have heard, 2022 has not exactly been a banner year for the stock market. And no one has been impacted more than Elon Musk.
Between January 1, and today, Elon’s net worth has dropped from $270 billion to its current $170 billion. In case you’re not great at math, that’s a full $100 billion loss. No billionaire has lost more in the last year. And there are still several weeks of the year left.
Why has Elon’s fortune dropped so much? The short answer:
Tesla stock is crashing.
Year to date, the S&P 500 index is down 17%. Not good. Unfortunately, Tesla’s performance is much worse. Year to date, Tesla stock is down 56%.
Why has Tesla dropped so much? Some would blame Elon’s Twitter purchase, which has forced him to sell billions of dollars worth of Tesla shares to raise funds while also pledging billions more of his remaining shares against the $13 billion in debt he absorbed to complete the transaction.
Another issue is simple economics. As the economy has soured, demand for Tesla’s high-priced electric vehicles may be cooling at a time when competition from other brands like Ford, Audi and Volkswagen heats up.
(Photo by Theo Wargo/WireImage)
Losing His Crown
As of this writing, Elon Musk is still the richest person on the planet. But he’s getting perilously close to losing the crown.
At this exact moment, Elon Musk’s $170 billion net worth is just $3 billion greater than Bernard Arnault’s $168 billion net worth.
Bernard earned his fortune as the CEO of luxury conglomerate LVMH which owns brands such as Louis Vuitton, Moet, Hennessy, Christian Dior, Sephora, Bulgari, Tiffany & Co and Tag Heuer.
Bernard’s net worth has declined about $10 billion compared to the start of the year. Year to date, LVMH’s stock is down 8%, but it’s actually up 25% in the last six months. Tesla is down 27% in the last six months.
In the world of Elon’s finances, literally anything can happen at any point. He could Tweet some incredible Tesla achievement tomorrow and cause his net worth to jump $20 billion. Or the opposite.
But this is a fairly stunning turn of events that I doubt anyone would have realistically predicted a year ago. Makes you wonder where his net worth will be a year from now??