The bigger they come, the harder they fall. That could definitely be said of controversial millionaire Elon Musk. Just a few days into 2023, and he has lost $13 billion, the most money hemorrhaged by any billionaire in 2022. Musk has also been breaking records as the first person in history to lose $200 billion in total.
Musk’s financial decline has lost his rank as the richest person in the world. That honor Is now held by Bernard Arnault of the French luxury goods company LVMH. However, he is still the second richest person in the world, with a net worth of $124 billion.
Why the Loss?
Musk has had most of his wealth tied up in his electric car company Tesla. Last year the company’s stocks fell by almost 70%. This is likely due to an increase in competition as well as the fact that Musk is no longer able to give his full attention to Tesla with his new Twitter acquisition.
“Elon abandoned Tesla, and Tesla has no working CEO,” KoGuan Leo, Tesla’s third-largest individual investor, tweeted back in December. “Tesla needs and deserves to have working full time CEO.”
Musk sold billions in Tesla stock to fund his Twitter acquisition. His space exploration company, SpaceX, is now said to be his biggest asset.
Tesla’s value has also gone down due to increased competition in the electric vehicles market. Sellers in China offered rare discounts to customers this year while the cost of used Teslas spiraled downward.
Evidence of the company’s downward spiral became apparent last month when Tesla announced rare promotions to clear out inventory. They offered two rebates to buyers who purchased before the end of the year. At first, they offered a $3750 rebate, but then doubled the amount to $7500 to further drum up business.
However, Tesla is looking like it will make a rebound. Morgan Stanley analyst Adam Jones says the company will probably beat out its competitors over the course of the year due to a 2% stock increase. This ensures that the company will have enough stock to meet consumer demand.
Was Tesla’s Valuation Overestimated?
Some experts have questioned whether Tesla was ever worth the trillion-dollar valuation it claimed at the start of 2022. While it was said to be worth more than the 12 largest automakers in the world combined, it had just a fraction of their sales.
It ended the year with a $386 billion valuation which put it ahead of its rivals. However, the company still lagged far behind major tech companies like Apple, Google, and Microsoft.
Musk and Twitter
Meanwhile, Musk’s Twitter acquisition is not going well for him. He was recently mocked by Leonidas Raisini, who claims to be a Twitter investor (although this has never been confirmed). Raisini offered to buy the company in a letter that mocked the letter Musk wrote to Twitter former chair Bret Taylor when he made his offer.
Many people are disturbed by Musk’s Twitter acquisition due to his laying off countless workers, proposing to introduce paid services, and discussing plans to change content moderation rules. He Tweeted a poll in late December asking users if he should step down as CEO. When 17.5 million respondents voted yes, Musk tweeted that he would “resign as CEO as soon as I find someone foolish enough to take the job.”
Since his acquisition, the billionaire has been sued by at least 100 of the people he fired, and he has seen a decline in advertisers.
Musk Maintains His Sense of Humor
Musk may have experienced a plummeting loss this year, but he is still able to maintain his sense of humor. Twitter user Brianna Wu responded to Musk’s tweet on the New Year, writing, “I believe that this year you will surpass yourself with even worse decisions.”
“Thank you for paying me $8,” Musk responded, referring to the money she had paid for her blue check subscription service. The blue check is a new policy Musk proposed. It’s a subscription service offered to accounts of public interest. A blue check appears next to the user’s on the platform, confirming they are who they say they are.
The policy was introduced in November, presumably to make up for the platform’s loss of advertisers, but it has since been paused.
Another user who tweets under the handle ‘Not Jerome Powell’ wrote, “If you’re having a bad year cause you lost a lot of money in the market, remember that Elon Musk has lost $200 million and is still making jokes on Twitter.
Musk responded with an emoji of a man shrugging.
Final Thoughts
Musk has certainly lost a lot of money this year, more than most of us will see in our lifetimes. However, with an uptick in supply, he may just get Tesla back to where it was. There is no word on whether he will become more invested in Tesla, make changes on Twitter, or devote even more time to SpaceX to make up for his losses.
