Amid tumbling Tesla stock, Musk loses the world’s richest crown

Elon Musk is no longer the richest person in the world, according to the Bloomberg Billionaires Index, as shares of Tesla (TSLA) continue to plunge.

Musk has moved into second place behind LVMH CEO Bernard Arnault as his net worth has plummeted by $107 billion so far in 2022. Musk is now worth $164 billion, while Arnault is worth $171 billion, as of Dec. 14.

Behind Musk is Indian billionaire industrialist Gautam Adani with $125 billion, followed by Amazon (AMZN) founder Jeff Bezos and Microsoft (MSFT) founder Bill Gates, both with $116 billion. Rounding out the top 10 are Berkshire Hathaway CEO Warren Buffett, Oracle (ORCL) cofounder Larry Ellison, former Microsoft CEO Steve Ballmer, Indian businessman Mukesh Ambani and Google cofounder (GOOGL ) Larry Page.

Musk’s net worth is largely tied to Tesla stock, which means that what made him the richest person in the world — Tesla’s booming market cap in recent years — is also what knocked him out. from first place. Tesla’s market cap fell from $1 trillion in October 2021 to about $500 billion as of Tuesday’s close.

Musk’s salary package as CEO of Tesla totals $56 billion and allows him to buy 1% of the EV giant’s shares at a steep discount whenever certain business goals are met.

Tesla is a bad 2022

Shares of Tesla are down more than 50% year-to-date on downside catalysts that include China’s zero-COVID policy, Musk’s takeover of Twitter and increased competition in the EV space.

China has implemented a zero-COVID policy, which meant strict lockdowns to prevent further infections. However, that also meant shutting down Tesla’s gigafactory in Shanghai, which accounted for about 52% of the company’s global shipments in 2021. (China is the world’s largest auto market).

“You’re starting to see some cracks in demand,” Wedbush senior analyst Dan Ives said of Tesla. “I don’t think the long-term story in China has been thrown out the window, I just think they’re really navigating now, for the first time in years, some growth challenges, they’re cutting prices… some supply knock-on reductions, and now, we could see not just in the fourth quarter, but 2023, 2 million units, that’s the line in the sand globally.

Ives removed Tesla from Wedbush’s “best ideas” list and cut its price target from $300 to $250.

“In what has been a dark comedy with Twitter, Musk has basically blacked out Tesla’s story/stock and is starting to have a potential impact on the Tesla brand with this ongoing Twitter train wreck,” Ives wrote in a statement. at the time.

The note also questioned Musk’s leadership in the tumultuous wake of his $44 billion takeover of Twitter. Several analysts see Musk owning and running Twitter as a distraction for Tesla.

Tesla CEO Elon Musk arrives for a look at the construction site of the new Tesla Gigafactory on September 3, 2020 near Gruenheide, Germany.  (Photo by Maja Hitij/Getty Images)

Tesla CEO Elon Musk arrives for a look at the construction site of the new Tesla Gigafactory on September 3, 2020 near Gruenheide, Germany. (Photo by Maja Hitij/Getty Images)

“Perception is reality,” Alyssa Altman, head of transportation and mobility at Publicis Sapient, told Yahoo Finance last month. “Everyone sees Elon Musk turning Twitter upside down overnight and believes he will lose sight of Tesla and his other complex businesses.”

While having someone take over his Twitter running role would have freed Musk and allowed him to turn his attention back to Tesla, a Tesla board member recently said that Musk had found a potential successor to lead the media giant. electric vehicles. As a result of the news, the stock hit its lowest level since November 2020.

Tesla has also had to deal with increased competition in the electric vehicle sector.

The company still remains the leader in global EV market share, but established automakers such as General Motors (GM), Ford (F) and Volkswagen are threatening that position.

GM EV ecosystem vice president Hoss Hassani recently told Yahoo Finance Live that his company’s vision is to “have everyone in an electric vehicle.”

Meanwhile, Ford has seen great success with its EV offerings, as the company reported sales up more than 100% in November 2022 and said it now accounts for 8.6% of market share. of electric vehicles.

Adriana Belmonte is a journalist and editor covering health care policy and policy for Yahoo Finance. You can follow her on Twitter @adrianambelli and contact her at adriana@yahoofinance.com.

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