Elon Musk becomes world's first person to lose $200 billion

Elon Musk may be the proud new owner of Twitter but his net worth has taken a serious hit this year after his many public mistakes sent Tesla’s stock crashing. 

The destruction of Mr. Musk’s wealth in 2022 has become “historic” according to David Goldman, executive editor of CNN Business. 

Back in 2021, Elon’s fortune reached its peak at about $340 billion in November and it catapulted him to the position of the world's richest man. 

But over the course of just one year, Elon’s wealth plummeted to just $137 billion before jumping back up to $146.5 billion according to Bloomberg's billionaire index. 

Bloomberg’s billionaire index also revealed that the world’s former richest man was the first person in history to lose $200 billion from his personal net worth. 

Some pundits have blamed Elon’s Twitter acquisition and subsequent behavior for such a shocking loss in wealth, but there are several factors at play that saw his fortune reduced by such a staggering amount. 

Most of Elon’s personal wealth is tied up in Tesla stock and the company faced several unique circumstances over the last three years that both increased its value and then decimated it.

Throughout most of 2021, Tesla certainly benefited from the easy money asset runup of the early pandemic according to Bloomberg. 

In January 2020, Tesla was valued at $117 billion by the stock market,” wrote Investopedia journalist Rakesh Sharma, “by the end of the year, that figure had skyrocketed to $658.39 billion.”

“Subsequently, Tesla's stock traversed the distance to a $1 trillion market cap in less than a year,” Sharma added, “reaching that milestone on Oct. 25, 2021.”

Once Tesla reached a $1 trillion market cap it was playing on the same level as Apple, Google, or Amazon, but the fundamentals of the business just weren’t there. 

As a business, Tesla’s had a lot of major problems. Its products were appealing to consumers and its cars were the top-selling U.S. electric vehicles according to CNBC’s Lora Kolodny, but the company wasn’t really ready for the competition. 

“Tesla is still the top-selling electric vehicle brand in the U.S., but its dominance is eroding as rivals offer a growing number of more affordable models,” Kolodny wrote while analyzing a November report from S&P Global Mobility.

The value of Tesla as a company has been diminishing and with it so has Elon’s wealth. A recent rebate scheme to create more interest from buyers ended up angering investors and decimating Tesla's stock price in December 2022, resulting in a 37% plunge.

“Critics have long questioned whether Tesla was ever worth the trillion-dollar valuation it had at the start of 2022,” wrote David Goldman. 

Goldman noted that while Tesla may have had one of the top valuations for any automaker at the time, the company was only doing a fraction of the sales of its competitors. So a fall of some kinda was inevitable. 

But Elon’s post-Twitter purchase behavior shouldn’t be ignored when considering the eroding position of Tesla. 

While buying Twitter for $44 billion certainly affected Musk’s net worth, it was his behavior that really did the real damage. 

"His constant tweeting and increasingly erratic behavior, particularly after taking over as CEO at Twitter, has angered Tesla investors who want Musk to pay more attention to his significantly larger and more valuable company,” Goldman wrote. 

“Musk has defended himself against critics, saying he hasn’t missed a major Tesla meeting since taking on responsibility for Twitter," Goldman added.

But Tesla has been affected by his Twitter purchase and not just in the sphere of public opinion. Lora Kolodny noted in late October 2022 that Eloan had pulled at least 50 Autopilot team developers from their jobs at Tesla to work on fixing Twitter's backend code and it is clear from Elon’s current net worth that his investors aren’t happy.