How Did Elon Musk Lose $4.5 Billion in His Net Worth?

By BERT HOOVER Dec 13 2022, 19:39 PM EST

Due to this year's steep drop in the value of his Tesla shares, Elon Musk is no longer the richest man in the world. He is now being replaced by Forbes and Bloomberg rank LVMH CEO and billionaire Bernard Arnault.

Musk is the CEO and largest shareholder of Tesla, with a reported 14% stake.

In October, he bought the social network Twitter for $44B, per BBC.

Forbes estimates Musk is currently worth $176.8B and Bernard Arnault at $188B.

Elon Musk Net Worth Plunge

The loss in Tesla shares of around 60% this year and over 25% after Musk took control of Twitter has reduced Musk's wealth.

According to Axios, his wealth has taken a severe hit, with investor suspicion growing over Musk's Twitter account and Tesla's other issues.

Since acquiring Twitter, Musk has sold at least $4B worth of Tesla stock.

Musk is speculated to hold substantial amounts of cryptocurrency, which has had a lousy year along with Tesla's shares.

Musk had a disappointing year in 2022. His bottom line was negatively impacted, and so was his capital.

Elon Musk Assets

Aside from Tesla and SpaceX, Elon Musk is also a co-founder of the tunneling business Boring Company, which aims to defeat traffic. Forbes listed a total of six companies he has co-founded.

Musk holds about 25% of Tesla through shares and options, but he has pledged more than 50% of his stock as security for loans.

Following a funding round in May 2022, the valuation of SpaceX, which was founded the same year, increased to $127 billion, tripling in just three years.

In April 2022, with a valuation of $5.7 billion, the Boring Company, which builds tunnels to avoid traffic, received $675 million in funding.

After Elon Musk announced a 9.1% ownership and threatened a hostile takeover, Twitter's board decided to sell the firm to him in April 2022 for $44 billion.

Musk tried to back out of the deal, but Twitter asked the court to enforce the agreement. The two parties settled in October 2022.

Now, Musk owns 82% of the company.

Dan Ives, an analyst at Wedbush Securities, said that the "circus" around the acquisition of Twitter hurt Tesla's share price.

Ives claims that Musk has gone from a hero to a monster in Wall Street's eyes as the overhang develops with each tweet.

"The Twitter circus show has hurt the Musk brand, and it's a major overhang on Tesla's stock. Musk is Tesla and Tesla is Musk," he added.

Elon Musk sold billions of dollars worth of Tesla shares to pay for the acquisition, which weighed on the stock price.

A slowdown in the economy increased financing prices that deter buyers, and an increase in supply from competing companies worried investors about the market for the company's electric automobiles.

Meanwhile, Tesla has been impacted by recalls, government inquiries into accidents, and its autopilot system.

This article is owned by Latin Post.

Written by: Bert Hoover

WATCH: JUST IN: Elon Musk No Longer World's Richest Person - From Forbes