Elon Musk’s role at Tesla questioned as Twitter occupies his attention Measuring individuals’ net worth at a given point in time is tricky business. Entrepreneurs whose net worth is tied up in the value of a particular stock can see huge fluctuations within short time frames because of external factors such as market conditions or government policy. Musk has in the past lost significant amounts of money before recovering and regrowing his net worth. But this crisis is in part of Musk’s own making. He sold significant amounts of his Tesla shares to purchase Twitter at a premium, just as the carmaker is suffering from increased competition in the electric-vehicle market, shortages of chips and raw materials, and production delays and missed deadlines. Meanwhile, Musk has said he will sleep at Twitter’s San Francisco office “until the org is fixed.”
Frustrations with Musk have bubbled over into shareholder lawsuits against Tesla, including one filed in 2018in Delaware that claims a pay package he secured was excessive and alleges Tesla’s board members did not act independently in approving it. Battle to dethrone Tesla heats up just as Musk is distracted by Twitter. According to Bloomberg News, SpaceX, Musk’s space manufacturing company, accounts for more than 37 per cent of his net worth, and shares in the publicly traded Tesla account for about 33 per cent. The rest is made up of shares in Twitter and the Boring Company, the firm Musk created to build tunnels with the goal of relieving urban traffic. The recent drop in Musk’s net worth has largely been due to the plummeting value of Tesla stock. Musk has repeatedly attributed this to macroeconomic trends, including the Federal Reserve’s historically high 2022 interest rates .
In an exchange last month with Twitter and Tesla investor Ross Gerber about the value of Tesla, Musk tweeted, “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.” Still, Musk appeared to tacitly acknowledge investors’ concerns that his investment in Twitter is detracting from the value of his other projects. “I will make sure Tesla shareholders benefit from Twitter long-term,” Musk tweeted in December. He did not provide specifics. Musk was surpassed as the world’s richest person by Bernard Arnault, CEO and founder of French luxury retail giant LVMH. Arnault’s net worth, as of Thursday, is $182 billion, according to Bloomberg’s Billionaires Index. According to Forbes, Arnaut and his family are worth $204 billion, while Musk is worth $146.5 billion.
These tech moguls lost a combined $433 billion. Personal drops in fortune are not unusual at the highest levels of business, particularly in technology — though the scale of Musk’s loss is staggering. As Guinness notes, the man who most closely neared Musk’s personal fortune loss, Son, would see his net worth shift “by as much as $5 billion in a day” during the dot-com crash of 2000. Still, today, Son is nowhere near the top of the world’s-richest-people lists: Forbes ranked him 74th in its 2022 billionaires list, and he is 139th on Bloomberg’s billionaire index.
But Musk’s fortunes could still rise. As Guinness notes, “despite the plunge in prosperity, Tesla remain the most valuable car company in the world, with a market cap over $100 billion larger than their closest competitor, Toyota.”
In a note to investors in December, Goldman Sachs analyst Mark Delaney wrote that he still believes in the “significant value” of “Tesla’s brand,” though he acknowledged it has “become more polarising” since Musk purchased Twitter. He suggested the company should have “consumer focus related to Tesla shift back to these core attributes of sustainability and technology” to regain value.
