Musk Down $100 Billion in 2022 as Tesla Tanks

How do you find yourself with a private web value of $169.8 billion in a bear market? Should you’re Tesla Inc. (TSLA) CEO and Twitter proprietor Elon Musk, you begin the 12 months with $270.3 billion after which let gravity do its factor.

Key Takeaways

  • Elon Musk’s private wealth was down greater than $100 billion in 2022 as of Monday.
  • The losses are the results of a pointy drop in Tesla’s share value, which is down 52% this 12 months.
  • Musk owns a 23% stake in Tesla by way of inventory and vested inventory choices regardless of promoting shares value $19 billion this 12 months.
  • Vested Tesla choices accounting for some $50 billion of his wealth are at difficulty in a Delaware trial.

Musk has already used a variation of this joke in reference to his current $44 billion acquisition of Twitter, after beforehand acknowledging he overpaid for the social community. But Musk’s lack of greater than $100 billion in private wealth for the reason that begin of 2022 is basically the results of his virtually 23% stake in Tesla, the main producer of electrical automobiles.

Tesla shares have been down 52% year-to-date as of Monday’s shut, outstripping a drop of 29% for the Nasdaq-100 index and a 17% decline within the S&P 500 index.

Vertical strains denote Musk share gross sales. Supply: TradingView.

Investor religion in Musk’s claims about Tesla’s dazzling future has been dented by the COVID-19 outbreaks and the accompanying financial slowdown in China, in addition to the distraction Twitter has change into for Tesla’s CEO and self-styled “technoking.”

Rising U.S. rates of interest have been one other issue, curbing traders’ threat urge for food and deflating most of the costliest U.S. shares. Tesla nonetheless trades at practically 8 instances gross sales and 31 instances ahead earnings.

Musk has contributed to the decline by promoting Tesla shares value some $19 billion this 12 months, most not too long ago unloading inventory value valued at $4 billion on Nov. 8 after saying on two prior events he deliberate no additional inventory gross sales in 2022. Musk offered one other $22 billion of Tesla inventory in 2021, cashing out close to the highest of a 50% rally within the inventory final 12 months.

The newest share sale left Musk with Tesla inventory amounting to about 14% of shares excellent. He additionally owns vested choices equal to a stake of about 9%. Between the Tesla inventory and vested choices, Musk’s Tesla stake is value about $122 billion. Meaning he beneficial properties or loses $1.2 billion or so, not less than on paper, for each 1% transfer in Tesla’s share value.

This 12 months’s reversal of fortune left Musk a mere $23 billion forward of the closest challenger to his bragging rights because the richest human, as of Nov. 21. He may lose that title if a Delaware choose sides with a shareholder difficult the legality of Tesla’s 2018 choices grants to Musk accounting for the vested choices he now holds.

Musk may additionally get dethroned if Tesla shares proceed to drop. His nearest challenger is Bernard Arnault, chair of France’s LVMH luxurious items conglomerate, value $157 billion as of Nov. 21. Arnault can also be down massive this 12 months, whereas India ports and coal mogul Gautam Adani has added $53 billion this 12 months to maneuver into third place with a fortune estimated at $130 billion.

See also  Delta Air Lines Q3 FY2022 Earnings Report Preview: What to Look For