Serial entrepreneur Elon Musk has now lost over $200b in net worth in a little over a year and yes part of it is because the stock market had a difficult 2022 because of inflation and recession worries that were prevalent.
With a net worth of $340b in November 2021 and now $137b at the end of 2022, Elon Musk is now the second richest person in the world and could very well clinch the top spot again. Big tech saw a big plunge in 2022 with the likes of Meta (Facebook) losing about two-thirds of its value from $1.1tr to now about $319b today. Apple which has reclaimed the number one spot again as the biggest company in the world by market value was briefly displaced by the Saudi oil giant Aramco last year and the story is the same for Musk’s Tesla.
You see, a bulk of Elon Musk’s wealth is tied to Tesla and because the company’s stock plunged 65 percent in 2022, its only natural that his net worth would plummet as well. What has analysts worried though is the rate of plummet which they tie to his new Twitter business style of “free speech” which some say just emboldens some people to say what they like even when it hurts the rights of others.
Many Tesla and would be Tesla users decided that they were going to ditch the electric vehicles for alternatives, and this is evidenced in the two rebates that Tesla offered buyers if they would take delivery of a vehicle before the end of 2022. First rebate was around $3,750 and in the last two weeks of December 2022, it was doubled to $7,500 and this naturally sent the wrong message to investors who hadn’t seen Tesla do this before – not at this scale and this further sank their stock by 37 percent in December alone.
When Musk was to buy Twitter last year for $44b, he reportedly sold about $23b in Tesla stock further and investors thought he should focus more on the bigger fish instead of an “overpriced” Twitter. Musk successfully bought Twitter and began unbanning accounts that were once suspended for various violations including that of President Donald Trump and rapper Kanye West which he later banned again for another infraction.
But he could finally be listening to some investors who think he should focus on Tesla and other promising enterprises like SpacerX and Neuralink as he conducted a poll on whether he should step down as Twitter CEO. About 57 percent said he should indeed step down and he has since promised to abide by the results and is now reportedly looking for a substantive CEO for the social media organisation.
Before the 2022 reckoning for big tech, many had wondered about valuations of these companies and how it was calculated in the first place. Meta laid off 11,000 employees globally last year alone and it wasn’t the only one but the most significant.
Cryptocurrency and big tech didn’t particularly have a post COVID bounce as speculated but 2023 could be different. Mark Zuckerberg is not backing down on the massive investments he’s putting into the Metaverse which some say could see Meta worth about $5tr in 2030.
Even at a $385b valuation today, Tesla is still worth more than some of the biggest automakers in the world and as demand increases, the company could very well go back to being a trillion dollar business and Elon Musk clinching the number one spot again.
