The wealth of billionaire Elon Musk, founder and chairman of Tesla and the new owner of the Twitter platform, reached about $238 billion on November 7, 2021, to begin to decline over a period of 13 months, until it reached only $137 billion on December 31, 2022, for Elon Musk to lose about $200 billion of his wealth. .
According to Arabia Net, Elon Musk's wealth was evaluated based on the Bloomberg Billionaires Index, which is a daily ranking of the world's richest people.
The index debuted in March 2012 and tracks the net worth of the 500 richest people on the planet. It draws information from stock market activity, economic indicators and news reports, profiles each billionaire, and includes a tool that allows users to compare the wealth of multiple billionaires. The index is updated every day at the close of trading in New York.
The Bloomberg Index collects the total numbers of billionaires' wealth through their ownership in the financial markets, and if the share prices of the companies in which they own stakes fall, this will soon be reflected in the total value of their wealth, which is what happened with Elon Musk.
The growth of Elon Musk's wealth was mainly driven by his stake in Tesla, after the company's market value exceeded $1 trillion for the first time in October 2021, joining the giant technology companies: Apple, Microsoft, and Amazon.
According to what I saw in Al Arabiya.net, Tesla's stock declined from its peak on November 5, 2021, when its price was $407, to reach $123 at the end of 2022, meaning that it lost about 70% of its value. This is considered one of the most important reasons for the decline of Elon Musk's wealth, but it remains book losses [i.e. on paper only] and unrealized.
Tesla then represented about 75% of the wealth of the richest billionaire in the world at the time, but Tesla's share of Musk's wealth declined to only 37% by the end of 2022.
Twitter deal.. the password!
But the poison always lies in the details, with Elon Musk offering to take over Twitter and buying about 9.7% of the shares from the stock exchange directly. Before one man, such a volume of deals was always done through the acquisition of another company by one company, but the difference this time is that a man acquires a company with tens of billions of his personal wealth, which is basically the sum of his contributions to a number of companies and not cash As some might imagine.
Later, things began to become clearer through Elon Musk's plans to sell part of his stake in the leading electric car company, and use the value of these sales to buy shares of Twitter, in addition to pledging some other shares in Tesla in exchange for financing the remaining part of the deal with loans.
Meanwhile, the pressure has intensified on Tesla, whether from increased competition from legacy automakers like Ford and General Motors, or start-ups like Rivian and Lucid, as well as significant competition in China from BYD, among others. In addition, the pressures that technology stocks faced from the strict central bank policies pushed the sector's stocks to decline collectively, which doubled the loss of stocks.
The decline in Tesla shares was very sharp, according to what I saw in Al Arabiya.net - shares fell by 65% in 2022 - and Musk sold so much of his shares in 2022 to help cover the Twitter deal, that his stake in Tesla is no longer his largest asset, according to the wealth index. of Bloomberg.
And with every decline in Tesla shares, he resorts to selling some shares to cover his open marginal position, as the value of Tesla shares represents the guarantee for the money borrowed for the Twitter deal, which increased the pressure even more.
Even Musk pledged more than once to stop selling shares, but he was selling shares again for billions of dollars each time.
Recently, Elon Musk's $44.8 billion stake in SpaceX became the heaviest weight in his fortune, followed by his $44 billion stake in Tesla.
Musk entered
The billionaire founder of Tesla does not get paid for managing the company, but he signed an agreement with shareholders according to which he gets the right to buy the company's shares at a price below the market price whenever the stock exceeds a certain level.
Musk still has many of these purchase options, valued at about $27.8 billion, but for their implementation it is necessary to have liquidity to buy shares at a cheap price, which may push him again to sell some existing shares and pay capital gains tax on them, to be able to buy shares at a cheaper price. from the current price of the shares.
It is noteworthy that Musk's losses of wealth are not actual losses, but only book losses, with the decline in the value of the assets he owns, most of which were related to Tesla shares, which is currently the only public company controlled by Elon Musk.
In addition to Tesla, Twitter and SpaceX, Musk founded the brain chip company Neuralink and the Boring Company, a tunnel construction company.
