How Elon Musk LOST $200 Billion

Описание: Elon Musk, founder of Tesla, Neuralink, SpaceX, and numerous other organizations became the second person in recorded history, to reach a net worth of over 200 billion dollars, after Jeff Bezos. From that point forward, Elon only went on to greater heights, getting to the 340 billion dollars mark in November 2021. However, after a poor year for Tesla stock prices, Elon also became the first person to lose more than 200 billion dollars, seeing his wealth drop to 142 billion dollars in recent months.
Now let's take a deeper look at that massive wipeout. To understand the situation better, it's important to understand what net worth means. Having a net worth of 340 billion dollars didn't mean that Elon Musk had 340 billion dollars lying around in the form of cash, or in his checking account. Net worth is the total value of all financial and non-financial assets tied to an individual. And for an individual like Elon Musk, it meant having massive ownerships in the stocks of the companies that he's founded.
To put it simply, Elon owns the majority stake in his companies. However, 2022 was especially bad for the share price of Tesla in particular. As the per unit price of the company's shares dropped, the value of Elon's shares also went down. In total, tesla stocks were worth 65% less at the end of 2022, than they were at the start. According to Musk himself, Tesla has been doing better than ever. He claims that the Federal Reserve was at fault for the loss in his net worth, as they had raised interest rates very high in a very short amount of time. This made the stock market invaluable to the average investor, and caused a massive drop in many stocks.
2022 was also the year Elon Musk purchased Twitter in a 44 billion dollar takeover. To finance this deal, Musk had to sell away a massive chunk of his Tesla stock. Selling stock on this massive scale meant that the value would nosedive due to the high supply in the market. In an episode of the All-In podcast released recently, Musk said, "You can get some pretty extreme things happening in a down market." The company even missed their growth targets in 2022, and had to scale back on their production in Shanghai plant in China. Tesla did not meet the estimated delivery numbers calculated by the Wall street investors earlier this year.
There's a growing feeling that the interest of car buyer's in Tesla's famed models, is shrinking every day. In December 2022, the company announced a rare sale to clear its inventory out. They attempted to offer rebates to buyers buying before the end of the year. These were firstly priced at 3,750 dollars before doubling up to 7 and a half grands.
The stock plummeted some 37% in December alone. The company had hit a valuation of a trillion dollars at the start of 2022, and was more valuable than the next 12 largest automobile manufacturers put together. Today, the company sits at a measly 386 billion dollars in comparison.
The Tesla Stocks were also massively devalued after its monopoly on the Electric Cars market was challenged by new movers in the market. Rivian, backed by Ford and Amazon, experienced one of the most successful IPOs in American history in 2021, and has only gone up to give Tesla very strong competition in the EV markets. Similar competition was also experienced from companies like Lucid Motors. The government is actively trying to pursue policy that favor the EV producers over combustion engine cars. This will mean that Tesla's market share will continue to dwindle, and its stock will continue to fall, unless it differentiates itself.
In early 2022, Tesla estimated to grow their sales by at least 50%, but supply chain woes meant that this plan had to suffer a setback. The biggest contributor to this was probably the Shanghai plant being forced to scale back its production levels. This eventually led to Tesla not meeting its delivery targets for 2022 either. The Shanghai plant had to adjust to the COVID wave in China, meaning that working hours were limited. Even though Elon claimed that the restrictions were not hurting company targets, Tesla CFO Zachary Kirkhorn said, "We've lost about a month of build volume out of our factory in Shanghai due to Covid-related shutdowns."
All this comes at a time when investors at Tesla are not happy with the erratic behavior that Elon Musk has been displaying, especially since his takeover of Twitter. They're pressing the Tesla CEO to focus more on his more valuable and larger company, instead of Twitter. As we discussed, Musk sold nearly 26 billion dollars' worth of his Tesla stock to acquire Twitter. Musk however, has hit back, saying that he's been attending all the major Tesla meetings, even after he acquired Twitter.
The social network announced the closure of its offices in San Francisco, California and ultimately fired more than 3,200 full-time workers at Twitter and brought in executives from other companies, such as Tesla, to impose their stamp on the social network.