And the biggest loser is…the richest man in the world.
Elon Musk’s wealth took a major hit following Tesla’s third-quarter earnings on October 18. In the days after the company reported profits and sales below analyst expectations, Tesla’s stock spiraled 23%, shaving $189 billion off its market capitalization and $41 billion off Musk’s own net worth. As of Monday, the Tesla CEO had a fortune of $193 billion, according to the Bloomberg Billionaires Index.
The Tesla stock nosedive isn’t the only big loss for Musk this year. Since buying Twitter for $44 billion last October, the company, now known as X, has hemorrhaged $25 billion in value, according to recent reporting from Fortune that was based on an internal valuation by X.
Musk has many huge successes in his business career. But the winning streak has been largely on pause lately as he struggles on a number of fronts.
Tesla’s recent earnings, for example, painted a mixed picture for the company. During the earnings call with investors, Musk said, “we dug our own grave with Cybertruck” because the cars are expensive and complicated to bring to market. The company also won’t reach its yearly output goal of a quarter of a million cars until 2025, Musk said, meaning it won’t be able to produce cars for the 1 million customer reservations it has until years later. Overall, the company had $23.4 billion in quarterly revenue, up 9% year over year but short of analysts’ expectations of $24.1 billion. The results have investors questioning whether Tesla is more a moderately growing car company than the fast-growing tech behemoth Musk promised it could be.
Another strike against Tesla is that the growth in electric car sales industry-wide is slowing, which makes Musk’s ambitious goals even more of a challenge. Furthermore, car companies are engaged in a price war, which cuts into their profits, particularly because electric cars are typically more expensive to produce than those that run on gasoline.
Musk’s wealth is largely tied up in Tesla stock, in which he owns a 13% stake. When the company’s share price peaked around $410 in November 2021, Musk had $340 billion to his name. Now, with it trading at around $200 per share, Musk is worth 40% less.
In terms of net worth, Musk still remains far ahead of the world’s second-richest person, LVMH chief executive Bernard Arnault, who has a $153 billion fortune.
At X, Musk has made a series of controversial decisions including laying off 80% of the staff, retiring the Twitter brand, and championing free speech in the face of a deluge of user posts that include racism and harassment. Advertisers have, at least at times, fled.
Earlier this year, Musk hired NBCUniversal ad chief Linda Yaccarino as chief executive to make peace with marketers. Both Musk and Yaccarino say X’s ad business is now thriving—even “close to breakeven,” as CNN reported—but as a private company, X doesn’t have to report its financials publicly, and any claims about a thriving business have yet to be independently verified.
