Economy

Elon Musk Is The First Man To Lose $200 Billion In One Year: How Did It Happen?

Elon Musk is the first person in history to lose $200 billion of his net worth. The new owner of Twitter He has been at a loss for several months, so much so that just a few weeks ago the real-time Forbes ranking recognized that the billionaire was no longer the richest man in the world, bested by businessman Bernard Arnault, CEO of luxury group LVMH.

Musk was the second person in the world to accumulate more than $200 billion in assets in January 2021, after rival Jeff Bezos.. In November of the same year, his wealth peaked at $340 billion. Now, according to Bloomberg’s ranking, Musk’s net worth has dropped significantly, reaching $137 billion.

The reasons for losing more than half of his assets in one year include the collapse of Tesla, the purchase of Twitter, and the increase in interest rates.. In the toughest months of lockdown, tech companies like Tesla, as well as Google, Amazon, Apple and Microsoft, saw their profits skyrocket. Specifically, the electric vehicle brand value reached a trillion in capital in October 2021. The growth has been driven by lower costs that many tech companies have had to incur during the pandemic, from marketing to physical stores. In the case of online stores and virtual stores, the turnover has grown exponentially, allowing companies to reinvest and increase their listing on the stock exchange. So investors found themselves with much more money at their disposal, which they, in turn, used to focus on promising companies, including Tesla. Thus a virtuous circle was created.

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Added to all this was the purchase of Twitter at the end of October. The entrepreneur sold billions of shares in his electric vehicle brand to buy the social network, that Tesla is no longer its main asset. The company lost 65% of its value in 2022, and the markets were turbulent due to the constant back and forth of the previous Twitter management, which also reduced the value of the micro-blogging platform. Musk’s move worked in essence, but he sold too much to buy Twitter for more than its real value.

Finally, the huge loans that Musk resorted to to complete his huge financial operations for 2022 must be added. As the Federal Reserve raises interest rates with the aim of containing inflation, it has become more difficult and, above all, more expensive to pay them, further reducing the billionaire’s assets.

Thelma Binder

"Explorer. Devoted travel specialist. Web expert. Organizer. Social media geek. Coffee enthusiast. Extreme troublemaker. Food trailblazer. Total bacon buff."

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