Elon Musk could lose world’s richest person title
as Tesla value almost halves
Founder’s net worth down about $70bn after fall in
electric car maker’s share price since he bid for Twitter
Julia
Kollewe
Fri 9 Dec
2022 15.15 GMT
Tesla has
lost nearly half its market value since its founder, Elon Musk, bid for Twitter
in April, reducing his net worth by about $70bn and putting his title as world’s
richest person at risk.
Shares in
the electric car company traded at $340.79 on 13 April, the day before Twitter
revealed in a securities filing that the billionaire had made a hostile bid to
buy the social media company for $43.4bn. Since then the Tesla share price has
plunged by 49% to $173.44 (£141.29), also due to concerns around disruptions at
one of its factories in Shanghai.
The Tesla
boss has sold $20bn of Tesla shares since April to fund the buyout. He now owns
445m shares, according to Reuters, and the share price decline has reduced the
value of that holding, from $151bn to $77bn.
This means
his claim to be the planet’s wealthiest person is under threat, with France’s
Bernard Arnault, chief executive of the luxury group LVMH, snapping at his
heels. On Wednesday, share movements meant Arnault briefly took top spot.
Musk has
said of his Twitter takeover: “Having a public platform that is massively
trusted and broadly inclusive is extremely important to the future of
civilisation.”
However,
Tesla shareholders worry about how he is dividing his time between the social
media site and his many other ventures such as the rocket company SpaceX, and
that running Twitter is too much of a distraction.
Adding to
those concerns, Musk’s bankers are considering replacing some of the $13bn
high-interest debt that he used to buy the platform in October with margin
loans backed by Tesla stock, Bloomberg reported.
However,
the billionaire tweeted: “When there are macroeconomic risks, it is generally
wise to avoid using margin loans on any company, as stocks may move in ways
that are decoupled from their long-term potential.”
He is under
pressure to turn around Twitter, which was already struggling before he bought
it, making a $221m net loss last year.
Since the
acquisition, Musk has fired about half of Twitter’s workforce, roughly 3,700
employees, while hundreds more subsequently resigned. The company faces a
number of lawsuits over the sackings and other issues. This week it also came
under investigation by city officials in San Francisco after a complaint that
the company allegedly converted rooms in its headquarters to sleeping quarters.
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