Elon Musk hasn’t really lost the headline-grabbing $200 billion.
The ex-richest man in the world would have lost between 2021 and 2022 a colossal sum, to the point of losing his title. However, the reality is slightly different.
A fortune backed by the Tesla bubble
Let’s go back a bit. To establish this figure of around 200 billion dollars gone up in smoke, the media used the Bloomberg index of billionaires in which we see that Elon Musk weighed 340 billion dollars in November 2021, against 137 billion currently.
November 2021? Remember, this is when the Tesla bubble (13% of whose shares are held by billionaires) had reached its peak, with a capitalization of nearly 1,200 billion dollars, against 385 billion today. This misleading situation was caused by the large floods of money poured into the market by the Federal Reserve, which has since tightened the screw.
Stock market indices, fluctuating and constantly subject to external hazards, are thus not good references for judging a person’s fortune. Especially in the midst of stock market euphoria such as during the COVID crisis. It was therefore wrong to assess the fortune of Elon Musk at 340 billion at the time, just as Amazon did not really “lose” 1,000 billion dollars in one year.
Money that Elon Musk never had access to
To support this observation, it suffices to recall that Elon Musk would never have been able to sell his shares at the price of their exorbitant valuation in the fall of 2021. Indeed, he would never have been able to take advantage of these prices at the top, since at the slightest massive sell signal, the rest of the market would have followed suit, causing the company’s price to crash.
He never really had access to this lost money, just like the other tech billionaires whose cumulative “losses” for the last year are estimated at $433 billion.
To try to assess the decline in Elon Musk’s fortune, we must above all compare his major financial operations. The businessman thus offloaded many Tesla shares this year, a fit company, to support the takeover of Twitter, for 44 billion dollars. An overvalued price, according to many people’s opinion. There surely rests the drop in the real fortune of the whimsical billionaire, even if it is difficult to count.
Source : Fellow