Elon Musk never left the headlines after he acquired Twitter and over the last few months, the social media giant has incurred hefty financial losses. According to Bloomberg’s recent reports, the owner of Tesla and Twitter CEO has scripted history as the first person to lose USD 200 billion of their net worth.
- Musk’s wealth dropped to $137 billion after Tesla’s stock fell 65% in 2022
- He lost another chunk of his fortune after Twitter’s value dropped by 56%
- The Tesla owner sold a majority of its shares to cover his $44 million Twitter takeover
- The social media giant now owes 13$ billion in debt
Success was Elon Musk’s second name two years back when he became the second person after Amazon founder Jeff Bezos to obtain a fortune of more than USD 200 billion in January 2021. His wealth crossed 340$ billion, and Musk became the world’s richest person in November 2021 until he was overtaken by LVMH CEO Bernard Arnault in December 2022.
Musk’s wealth is primarily sourced from Tesla’s success and growth. The EV giant crossed $1 trillion USD in market capitalization back in October 2021 to enter the same league as companies like Apple Inc., Amazon.com Inc., Microsoft Corp., and Google parent Alphabet Inc.
How did Elon Musk lose his fortune?
Ever since he acquired Twitter for $44 billion in late October 2022, Musk has spread himself thin, leading to a dip in Tesla’s standing in the EV market. Consequently, competitors caught up, and now the company is out of its depths.
The production in its Shanghai plant is suffering a decline and the company is selling at reduced rates to American customers to keep up. It offered a rare discount of $7,500 for the sale of its two highest-volume models – Model 3 and Model Y – before the end of the year.
As of now, Tesla’s stock is down to $385.98 billion, having experienced its worst year since its incorporation in July 2003. Tesla used to be his biggest revenue generator until the multi-millionaire sold his shares to help fund his Twitter purchase.
He sold almost $40 billion of Tesla stocks, which then fell to 65% in 2022. Musk has facilitated extensive borrowing contracts to purchase Tesla in the past, but there have not been any significant returns on his investment. Musk’s share in spacecraft manufacturer SpaceX now amounts to $44.8 billion, exceeding the $44 billion of stakes he owns in Tesla.
“Tesla is executing better than ever”
Despite obvious concerns about Tesla circulating the internet, Elon Musk has used Twitter to fight back against such claims and call out the Federal Reserve for increasing interest rates swiftly.
He also cautioned the world of the dangers of borrowed money in panicky markets. “Musk shared. “You can get some pretty extreme things happening in a down market.”
Elon Musk’s Unfortunate Spell as Twitter CEO
Musk’s explosive $44 billion Twitter acquisition in late October 2022 was the root of his downfall. Three months later, he is already preparing to file his resignment after a controversial spell as the CEO of the social media giant.
After the buyout, he became excessively invested in the social media company and worked on spotting malpractices in Twitter’s operations. However, his takeover led to a dead end, and Musk is now looking for a worthy candidate to replace him as the CEO.
His decision is based on the results of a Twitter poll where the majority of users voted against him being the CEO of the platform, and he subsequently stated, “I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers team.”
After the acquisition, Musk implemented transformative changes such as laying off workers, including Twitter’s ex-CEO Parag Agrawal and then inviting fired employees to occupy new roles. He was also accused of exploiting content policies to ban the accounts of accomplished journalists.
To cut off costs, the former richest person in the world put a block on janitorial services in the office and Twitter has stopped paying rent to its office, including the San Francisco headquarters. A Tesla investor even took Musk to court for his $56 billion pay package at the company, which was questionable as he spent most of his time overseeing Twitter’s revamping.
Despite his efforts, Musk’s net worth had dropped $9 billion in November, a few days after he became Twitter’s ill-fated CEO.