Fourteen months after Jeff Bezos was ousted as the world’s richest man, the Tesla and Twitter chief lost his crown on Wednesday, at least for a while. But Bezos is not to blame.
On 27 September 2021, Elon Musk overtook Amazon’s Jeff Bezos as the world’s richest person for the first time. The head of Tesla emailed Forbes for comment that day, I am sending a giant sculpture of the numeral ‘2’ to Jeffrey B., as well as a silver medallion. Fourteen months later, on Wednesday at 10:50 AM EST, Elon Musk was once again the rightful owner of that runner-up trophy.
For a brief window late Wednesday, the world’s number one richest person was Bernard Arnault of French luxury goods group LVMH. After trading business with Bezos, the world’s richest man, at No. 3 in 2021, Arnault topped the Forbes list with a net worth of $185.4 billion (Elon Musk was worth $185.3 billion and the pair Has been doing business from time to time) ). At the top of the ranking of the richest people in the world in the ranking.
At around 12:30PM EST Elon Musk took the number one spot. The two men’s fortunes are almost identical with a difference of around $200 million so it would not be surprising if they continue to flop in the Forbes ranking of the world’s richest.
Arnault added a few hundred million dollars to his fortune on Wednesday morning as shares of his luxury conglomerate soared. But with LVMH’s stock flat this year, Arnault owes his new status as the world’s richest man primarily to the dramatic collapse of Tesla’s share price.
This pushed down the Tesla CEO’s net worth, which is expected to reach $320 billion in November 2021, after car rental giant Hertz announced a massive order from the electric vehicle maker. It’s been a year of mixed results for the company, to which Musk owes most of his fortune. But the stock has performed very poorly. Tesla shares are down nearly 50% for the year. That’s about 20 percent worse than the tech-heavy Nasdaq overall.
Elon Muskjo owns about 25% of Tesla between the stock and options, which is now down to 43% from its peak in November 2021. As it reported record revenue and profits in the first quarter of 2022, Musk unlocked options worth $23 billion for Tesla to perform. Has been hampered by supply chain issues, especially due to China’s zero-covid policy. Deliveries declined for the first time in two years during the second quarter.
While the company beat analysts’ adjusted earnings per share in the second and third quarters, it reported that revenue decreased in both quarters. But the company has Musk’s $44 billion Twitter acquisition mostly to blame for its falling share price, as it has lost nearly half its value since the acquisition was first announced on April 14.
From mid-April to early November, Elon Musk sold $19.3 billion (pre-tax) of Tesla shares, possibly to finance the acquisition, putting pressure on the electric vehicle maker’s stock. At the same time, Tesla investors’ fears that Twitter would be a distraction for Elon Musk have also proven to be well-founded.
With tech stocks plunging, Elon Musk spent nearly half a year trying to get out of the Twitter acquisition, but was ultimately forced to close the deal in late October. He has since assumed the role of micromanaging CEO, quickly implementing a number of changes to the platform that were met with strong feedback from both users and advertisers. Chief among them: charging $8 per month for account verification and undermining Twitter’s content moderation.
Twitter is now likely worth less than the $44 billion Musk agreed to pay in April, with the acquisition yet to affect its fortunes much. Elon Musk managed to secure equity commitments of $8.1 billion from a group of investors, after acquiring the company at a discount of about 9% to the public market before making his intentions clear.
Including Twitter cofounder and former CEO Jack Dorsey. He loaned $13 billion to the company to finance his estimated 82% stake, keeping it off his personal balance sheet. Those maneuvers have offset an estimated 40% drop in Twitter’s value since April. But that wasn’t enough to stop Arnault on Wednesday. Whether the Frenchman can retain his place at the top is another question.