The billionaire founder of Tesla and the new owner
The billionaire founder of Tesla and the new owner of the “Twitter” platform lost nearly $200 billion of his fortune to $13 billion in just 13 months, down to $137 billion on December 31, 2022 alone during that period. . But the question is, how did this happen?!
First, you should know the indicators based on valuing billionaires’ net worth, including the Bloomberg Billionaires Index, a daily ranking of the world’s richest people. Launched in March 2012, the index tracks the net worth of the 500 richest people on the planet. It takes information from stock market activity, economic indicators and news, profiles each billionaire, and includes a tool that allows users to compare their wealth. multiple billionaires. The indicator is updated daily at the close of trades in New York.
The “Bloomberg” index collects the wealth of billionaires from their ownership in the financial markets, and if the share prices of the companies they own shares fall, this will soon be reflected in the total value of their wealth. That’s what happened to Elon Musk.
The growth in Elon Musk’s wealth stemmed from his stake in Tesla after the company’s market capitalization exceeded $1 trillion for the first time in October 2021, joining giant tech companies Apple, Microsoft and Amazon.
According to Al Arabiya.net, Tesla stock has slumped from its peak on November 5, 2021, when its price was $407, to $123 at the end of 2022, meaning it has lost about 70% of its value. This is considered one of the major reasons for Elon Musk’s fortune to decline, but ledger losses [i.e. only on paper] and unrealized.
At the time, Tesla represented about 75% of the wealth of the world’s richest billionaire, but Tesla’s share of Musk’s wealth had dwindled to only 37% by the end of 2022.
Twitter deal.. password!
But the poison is always in the details, Elon Musk has offered to buy “Twitter” and buy about 9.7% of the shares directly on the stock market. $44 billion by a single man. the acquisition of another company by one company, but this time the difference is that a man buys a company with tens of billions of personal fortunes;
Later, Elon Musk’s plans to sell some of his shares in the leading electric car company and use the value of those sales to buy shares of “Twitter” and mortgage some other shares in “Tesla” began to become clear. in exchange for financing the remainder of the deal with loans.
Meanwhile, BYD’s significant competition in China and others’ pressure on Tesla intensifies, whether alongside growing competition from legacy auto companies like Ford and General Motors or start-ups like Rivian and Lucid. In addition, the pressures of technology stocks from the tight policies of the central bank pushed the sector stocks down en masse, which doubled the share loss.
From what I saw on “Al Arabiya.net” the drop in “Tesla” shares was very sharp – shares fell 65% in 2022 – and Musk sold most of his shares in 2022 to help shut down “Twitter”. The deal shows that its stake in “Tesla” is no longer its biggest asset, according to the Bloomberg Wealth Index.
With every drop in Tesla shares, it resorts to selling some shares to cover its open marginal position, as the value of Tesla shares represents a guarantee of borrowed money for the Twitter deal, which further adds to the pressure.
Even Musk promised to stop selling shares multiple times, but each time he was reselling shares for billions of dollars.
Recently, Elon Musk’s $44.8 billion stake in SpaceX has been the heaviest in his fortune, followed by his $44 billion stake in Tesla.
Tesla’s billionaire founder doesn’t get paid to run the company, but by signing an agreement with shareholders, he gets the right to buy the company’s shares at a price below market price when the stock exceeds a certain level.
Musk still has most of these buyout options, valued at around $27.8 billion, but exercising them requires liquidity to buy the shares at a cheap price, which could push him back to sell some existing shares and pay capital gains taxes on them. , to be able to buy shares at a lower price than the current price of the shares.
It is noteworthy that Musk’s wealth losses are only book losses, not actual losses, with the decline in the value of his assets related to Tesla shares, the majority of which is currently the only publicly traded company controlled by Elon Musk. .
In addition to Tesla, Twitter, and SpaceX, Musk founded the brain chip company Neuralink and a tunnel construction company, The Boring Company.