Why Elon Musk Is $30 Billion Poorer This Week

Published 2 years ago
Tesla Officially Opens Gruenheide Gigafactory

Tesla shares are down 15% since last Friday, making it a bad week for the world’s richest person.

Tesla and SpaceX chief Elon Musk lost $15.7 billion of his net worth on Wednesday, as shares of his electric vehicle maker fell by 8%. The world’s richest person (worth an estimated $224.5 billion) is now $31.4 billion poorer than he was last Friday, according to Forbes estimates, as Tesla’s market capitalization has cratered by 15% this week –far more than the 6% drop in the tech-heavy Nasdaq.

According to Wedbush analyst Dan Ives, “Shanghai factory issues due to the zero Covid policy in China have been a major overhang on the stock in an already jittery tape”—referring to the drop in tech stocks, which Ives describes as a “massive risk off with Tesla front and center.” With inflation surging and interest rates rising, investors’ appetite for assets considered to be relatively speculative is waning.


Speaking at the Financial Times’ Future of the Car Summit Tuesday, Musk did his best to alleviate investors’ concerns, citing encouraging conversations he’s had with the Chinese government in recent days about the country’s latest round of lockdowns, though he did hint at the possibility of restricting new Tesla orders in the short-term.

“We’re actually probably going to limit that — just stop taking orders for anything beyond a certain period of time,” Musk said.

That must have been discouraging to hear for Tesla investors already concerned about the distraction posed by Musk’s $44 billion Twitter takeover. At the FT summit Tuesday, the Tesla chief insisted that he is “confident we will be able to sell all the cars we can make.” But according to Wedbush’s Ives, “Musk distraction issues remain at play as an overhang on the stock.” By distraction, Ives means the ongoing process of purchasing Twitter.

While the Tesla CEO announced he has raised $7.1 billion from a group of A-List investors last Thursday to help fund his Twitter acquisition, he still hasn’t explained where the remainder of the $27.3 billion equity commitment he made to Twitter’s board will come from. And the list of potential distractions for Musk, who already runs two companies, keeps getting longer.


According to an investor pitch deck leaked to the New York Times last Friday, Musk’s Twitter turnaround plans may be even more ambitious than Tesla investors imagined: he reportedly hopes to quadruple users and quintuple revenue by 2028, while cutting Twitter’s reliance on its main revenue source (advertising) in half. That sounds like a lot of work for Musk, who is expected to serve as Twitter’s interim CEO after the deal closes, according to a report by CNBC. Musk has also reportedly said that he plans to take Twitter public again in as few as three years, hinting at a time consuming IPO process lingering down the road.

And that’s assuming the deal closes promptly. Twitter short-seller Hindenburg Research is betting that won’t be the case, saying in a note released Monday that it sees “a significant risk that the deal gets repriced lower” due to the declining values of tech companies since Musk made his initial offer. In other words, Musk may have some bargaining left to do with Twitter’s board.

Musk could always just walk away from the deal, which keeps on getting more expensive. His stake in Tesla, worth $167 billion today, was worth $235.1 billion on April 13, the day before he announced his Twitter takeover–meaning Musk was more than $68 billion richer before he made his plans for the social media company public. For now, Musk remains the world’s richest person by a long shot, worth $78.3 billion more than runner-up Bernard Arnault of French luxury empire LVMH. But at some point, the Twitter deal’s $1 billion breakup fee may start to look like a bargain.

By Matt Durot, Forbes Staff