Elon Musk is no longer the world’s richest person, according to the Bloomberg Billionaires Index, as Tesla (TSLA) stock continues to plunge.
Musk moved to the second spot behind LVMH CEO Bernard Arnault as his net worth 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 at $125 billion, followed by Amazon (AMZN) founder Jeff Bezos and Microsoft (MSFT) founder Bill Gates, who are both at $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 (GOOGL) cofounder Larry Page.
Musk’s net worth is largely tied up in Tesla stock, meaning that what made him the world’s richest person — Tesla’s market capitalization booming in recent years — is also what knocked him out of the top spot. Tesla’s market cap fell from $1 trillion in October 2021 to around $500 billion as of Tuesday’s close.
Musk’s compensation package as Tesla chief executive totals $56 billion and enables him to buy 1% of the EV giant’s shares at a deep discount every time certain business targets are met.
Tesla’s very bad 2022
Tesla stock is off more than 50% year to date amid downside catalysts that include China’s zero-COVID policy, Musk’s acquisition of Twitter, and increased competition in the EV space.
China implemented a zero-COVID policy, which meant strict lockdowns to prevent any further infections. However, that also meant shutting down Tesla’s gigafactory in Shanghai, which accounted for roughly 52% of the company’s global deliveries in 2021. (China is the largest auto market in the world.)
“You’re starting to see some demand cracks,” Wedbush senior analyst Dan Ives said about Tesla. “I don’t believe the longer term story in China is thrown out the window, I just think they’re navigating now some really, for the first time in years, some growth challenges, they’re cutting prices … some supply chain reductions, and now, we got to see not just in Q4, 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 show with Twitter, Musk has essentially tarnished the Tesla story/stock and is starting to potentially impact the Tesla brand with this ongoing Twitter train wreck disaster,” Ives wrote in a note at the time.
The note also questioned Musk’s leadership in the tumultuous wake of his $44 billion acquisition of Twitter. Several analysts view Musk owning and leading Twitter as a distraction for Tesla.
“Perception is reality,” Alyssa Altman, transportation and mobility lead 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 role running Twitter would free Musk and allow him to shift his focus back to Tesla, a Tesla board member recently said that Musk had found a potential successor to lead the EV giant. Following the news, the stock hit its lowest level since November 2020.
Tesla has also had to grapple with more competition in the EV industry.
The company still remains the leader in global EV market share, but established automakers like General Motors (GM), Ford (F), and Volkswagen are threatening that position.
GM Vice President of EV Ecosystem Hoss Hassani recently told Yahoo Finance Live that his company’s vision is “to have everybody in an EV.”
Meanwhile, Ford has seen major success with its EV offerings, as the company reported sales up over 100% in November 2022 and claimed that it now accounts for 8.6% of EV market share.
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Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected].
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Source: https://finance.yahoo.com/news/tesla-stock-plunge-elon-musk-richest-160341550.html