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Roadblock: Elon Musk’s Net Worth Drops $800 Million In A Day Amid Tesla Woes

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Tesla’s fleet of electric vehicles are known for their smooth ride; production at the company plant has been markedly choppier.

On Wednesday afternoon, the carmaker unveiled its third-quarter earnings. It posted revenue slightly higher than analyst estimates, but also an adjusted loss of $2.92 per share, 30% greater than predicted. Moreover, production bottlenecks have delayed shipments of the company’s new Model 3 vehicle, rendering it unlikely that Tesla will achieve its target delivery pace of 500,000 cars per year by the end of 2018. (Read more on that here.)

In light of that news, investors sent Tesla shares tumbling 7% through 11:15 Eastern Time on Thursday. The stock is now trading below $300 per share for the first time since May.

That decline impacted no person as much as Elon Musk, Tesla’s CEO and largest individual shareholder. His net worth slumped $800 million in response to the bad news. He is now worth an estimated $19.1 billion, according to Forbes’ real-time rankings of the World’s Billionaires, and is the 23rd richest person in America. His net worth is down $1.7 billion since the annual Forbes 400 ranking was published last month.

READ MORE: Elon Musk’s Net Worth Eclipses $20 Billion For The First Time

Fortunately for the South African native, his wealth is somewhat diversified. Roughly half of his fortune is tied up in Tesla shares. The bulk of the rest is comprised of his stake in rocket maker SpaceX, which raised $350 million in July at a valuation of about $21 billion. He owns approximately 50% of the business.

Musk, 46, has a long track record of entrepreneurial success. His first major exit came in 1999, when he sold software firm Zip2, which he cofounded, to Compaq for a reported price of over $300 million. He then earned an even more lucrative payout in 2002 after Paypal, which he also cofounded, was acquired by eBay for $1.4 billion.

READ MORE: Tesla’s Secret Formula

He joined Tesla in 2004 as a major investor and took the helm in 2008. At the time, the company’s future looked dire, as credit markets were drying up during the global financial crisis and development was severely behind schedule.

Eventually, the company began churning out cars, beginning with its sleek Roadster vehicle. Even with this week’s decline, the business has been an overall colossal success. It now boasts a market capitalization of nearly $50 billion. – Written by 

Billionaires

MacKenzie Bezos And Melinda Gates Team Up On $30 Million Gender Equity Contest

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One of the most powerful women in the world is teaming up with one of the richest women in the world—Melinda Gates and MacKenzie Bezos, respectively—to host a competition with one goal in mind: gender equality.

Gates and Bezos announced the competition, called the Equality Can’t Wait Challenge, through Pivotal Ventures, Gates’ investment and incubation company. The challenge will be managed by Lever For Change, a MacArthur Foundation affiliate, and will grant $30 million to the organizations (or the coalitions of organizations) with the best ideas for helping to expand women’s power and influence in the United States by 2030.

“Closing the gap on gender equality will benefit everyone. History keeps teaching us that when a diversity of voices is represented in decisions, the outcome is better for all,” MacKenzie Bezos said in a statement Tuesday. “I’m excited that the Equality Can’t Wait Challenge will focus energy and innovation on this vital catalyst for positive change.” 

“The entrenched inequalities that divide America—race, gender, class—will not go away without systems-wide change,” added Melinda Gates in a statement of her own. “This challenge is seeking bold ideas to dismantle the status quo and expand power and influence for women of all backgrounds.” 

While Melinda Gates has long been an outspoken advocate for women’s health and gender equality, Bezos has been quieter with her philanthropy and influence. Since finalizing her divorce from Amazon founder Jeff Bezos last year, Bezos has indicated her philanthropic intentions by signing the Giving Pledge (thereby committing at least half of her now-$51 billion fortune to charity) and joining the board of Blue Meridian, an organization dedicated to helping children and families in poverty. Her contribution to the Equality Can’t Wait initiative marks her biggest public gift to date.

A spokesperson for Lever for Change said that the competition had been in the works for the past six months, and that the timing of its announcement—just weeks after massive protests against systemic racial inequities started spreading across the nation—is not meant to be a reaction to the current reality, but a continuation of serious conversations.

Broadly, the challenge will look for ideas that help dismantle barriers that hold women back (including but not limited to sexual harassment and discrimination, racial inequity, and inadequate federal policies around caregiving); fast-track female participation in sectors like technology, government and entrepreneurship; and change outdated systems and beliefs around gender. Specifically, according to the challenge’s website, successful proposals should create real, measurable change for women in at least one of the following areas: wages and wealth, unpaid care, share of leadership roles, content creation (in other words, increasing the percentage of cultural and intellectual content created by women), and public perception.

“When I taught my first course on women in the U.S. economy back in 1985, a female full-time, year-round worker made 65 cents for every dollar earned by a man. In 2018, she earned 82 cents. That’s a raise of less than a penny a year,” noted Cecilia Conrad, the CEO of Lever for Change. She’s hopeful that the Equality Can’t Wait competition will accelerate parity in wages and societal treatment.

To participate in the challenge, organizations must register online by September 1, 2020; fuller applications are due by September 22. Finalists will be announced in early 2021, and winners will be chosen next summer. The $30 million in prize money will be divided among the two most compelling ideas (each will receive a minimum of $10 million) and the remaining finalists.

Maggie McGrath, Forbes Staff, ForbesWomen

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Chinese Billionaire Held Hostage With Explosives As Son Swims Across Lake To Raise The Alarm

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Chinese billionaire He Xiangjian survived an abduction plot this weekend after kidnappers carrying explosives forced entry into his home at Guangdong province.

He Xiangjian, one of the richest men in China with an estimated net worth of $24.8 billion, was rescued on Sunday after his son, 55-year-old He Jianfeng, sneaked out of the family home and swum across a river to raise the alarm, according to local news.

According to a statement posted on Weibo, a Chinese equivalent to Twitter, police responded on Sunday night to a break-in at an 18-hole golf course and sports center owned by He Xiangjian’s Midea Group.

Although police have not named He Xiangjian in their statement, a spokesperson for the local Foshan Public Security Bureau wrote on Weibo, “The victim is safe!” with the police statement attached. Midea Group confirmed the incident on Weibo, and thanked the “media and all sectors of society for their concern.” 

Who is He Xiangjian?

Entrepreneur He Xiangjian is the founder of home appliance giant Midea Group, which took shape in 1968 after He led a group of 23  residents from Guangdong Province to form a lid production workshop.

Today Midea Group trades on the Shenzhen stock exchange and has more than 200 subsidiaries, including Germany-based robotics firm Kuka. Xiangjian stepped down from its operations in 2012. His son He Jianfeng is now a director of Midea Group and Midea Real Estate Holding.

In January, Midea Group donated products like air conditioners, water heaters and washers and dryers to Wuhan hospitals battling coronavirus.

He Xiangjian is currently the 7th richest billionaire in China, according to Forbes’ Real Time Rankings.

David Dawkins, Forbes Staff, Billionaires

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Billionaire Bill Ackman Plots His Next Deal

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It’s been a busy year for Bill Ackman of hedge fund Pershing Square Capital Management. Ackman spotted the risks from the coronavirus pandemic early, building a massive credit hedge in January and February that protected his hedge fund from the market plunge. Then, he doubled down near the market lows and is up 30%-plus for the year, compounding Pershing Square’s 58% gain in 2019. Now, the hedge fund billionaire is looking for his next signature deal.

Ackman is planning to raise up to $1 billion using a publicly traded blank-check company, which will then be used to buy a stake in a business and bring it to public stock markets. The brewing deal, first reported by Reuters, would give Ackman the opportunity to make a major new investment. (Pershing Square declined to comment.)

This year, Pershing Square used the March market plunge to rebuild a position in Starbucks and add significantly to holdings like Lowe’s, Howard Hughes and Restaurant Brands. Pershing Square also build a stake in private equity giant Blackstone Group, first reported by Forbes, but then sold quickly, he recently told investors. Typically, when Pershing Square scales a new investment it commits between $500 million and $1 billion to the idea, or about a 5%-to-10% weight.

Blank check companies have become popular in recent years as a way to take private equity and venture capital backed companies public. Notable recent deals include the listings of DraftKings, Virgin Galactic and most recently, hydrogen truck unicorn Nikola Motor Company. These vehicles have attracted big names on Wall Street, from Goldman Sachs to Barry Sternlicht’s Starwood Capital and Chamath Palihapitiya of Social Capital and Ackman is no stranger to these deals.

Pershing Square notably formed a blank check company called Justice Holdings and in 2012 bought a large stake in Burger King, taking the restaurant public. The deal, in partnership with private equity giant 3G capital, turned into a massive windfall for Ackman and Pershing Square. Ackman personally owns about $250 million in shares of Burger King’s parent company and it’s been one of Pershing Square’s more successful investments. Pershing Square also invested in Nomad Foods and Platform Specialty Products, which were blank check companies, but didn’t turn out as successful.

The prospective new deal is one to watch.

Private equity firms are sitting on massive portfolios of businesses that may need new capital to manage through the pandemic, and may find appeal in quickly tapping public stock markets. Moreover, Pershing Square’s current portfolio is indexed heavily to restaurants, retailers and hoteliers, but Ackman’s done much less investing in some of the hotter corners of the stock market, like information technology and software. Pershing Square recently built a large position in healthcare software provider Agilent, and Ackman’s long been a fan of Ceridian, a maker of software for payroll.

Ackman’s Pershing Square is enjoying a renaissance after the firm battled through a $4 billion-plus loss on controversial Valeant Pharmaceuticals. The firm refocused on its areas of specialty, succeeding on investments like Nike, Starbucks, Hilton and Chipotle and has seen a major payoff. Last year was the best on record for Pershing Square and his fund is significantly outperforming peers and broader stock markets in 2020. Assets firmwide recently eclipsed $10 billion, about half of their peak, with most housed in a publicly traded permanent capital vehicle called Pershing Square Holdings.

Now, Ackman is raising new capital to hunt for new deals in markets ripe with opportunity.

Antoine Gara, Forbes Staff, Banking & Insurance

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