Elon Musk becomes the first person to lose $200 billion

By Brian Chapata

Elon Musk was the second person ever to amass a personal fortune of more than $200 billion, crossing that threshold in January 2021, months after Jeff Bezos.

The CEO of Tesla Inc has already achieved a first of his own: becoming the only person in history to wipe $200 billion from his net worth.

Musk, 51, has seen his fortune plummet to $137 billion after Tesla’s stock tumbled in recent weeks, including an 11 percent drop on Tuesday, according to the Bloomberg Billionaires Index. His fortune peaked at $340 billion on November 4, 2021, and he remained the world’s richest man until he was overtaken this month by Bernard Arnault, the French tycoon behind luxury goods powerhouse LVMH.

The round number reflects exactly how high Musk soared during the boom in asset prices during the era of the easy money pandemic. Tesla surpassed $1 trillion in market capitalization for the first time in October 2021, joining tech giants Apple Inc, Microsoft Corp, Inc and Google parent Alphabet Inc, even though its electric vehicles represent just a fraction of the total car market.

Also read | Between new rivals and a distracted boss, Tesla is suffering on Wall Street

Now Tesla’s dominance in electric cars, the basis of its high valuation, is under threat as rivals catch up. It is offering US consumers a rare $7,500 discount to get the two highest-volume models before the end of the year, while scaling back production at its Shanghai plant.

Meanwhile, with pressure mounting on Tesla, Musk is busy with Twitter, which he acquired for $44 billion in late October. It has taken a “move fast and break things” approach, such as firing staff, then asking them to come back, and applying content rules indiscriminately to justify banning the accounts of some prominent journalists who cover it.

The decline in Tesla’s stock has been so sharp — shares are down 65 percent in 2022 — and Musk has sold so much this year to cover his Twitter purchase that it’s no longer his biggest asset, according to the index of Bloomberg wealth. Musk’s $44.8 billion stake in his closely held Space Exploration Technologies Corp outweighs his roughly $44 billion position in Tesla stock (he still has options worth about $27.8 billion). Musk now owns 42.2 percent of SpaceX, according to a recent filing.

Musk, for his part, dismissed concerns about Tesla and repeatedly took to Twitter to criticize the Federal Reserve for raising interest rates at the fastest pace in a generation.

“Tesla is doing better than ever!” Musk tweeted on Dec. 16: “We do not control the Fed. That’s the real problem here.”

The billionaire, who previously borrowed heavily against his Tesla stake, nevertheless recently warned about the dangers of borrowing money in panicked markets.

“I would really advise people not to have margin debt in a volatile stock market, and you know, from a money perspective, keep the powder dry,” Musk said on the All-In podcast released this month. “You can get some pretty extreme things that happen in a down market.”

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