The unraveling of Tesla stock has erased $132 billion from Elon Musk's net worth in 2022, according to the Bloomberg Billionaires Index.
Despite the massive decline, Musk's $139 billion fortune still makes him the world's second richest person, based on data as of December 23.
But the wealth destruction is set to get worse based on Tuesday's trading session for Tesla stock, as its near 10% sell-off will knock an estimated $7 billion to $8 billion from Musk's net worth. That would bring his total year-to-date wealth destruction to about $140 billion.
Luxury goods magnate Bernard Arnault, who is the co-founder and CEO of LVMH, is $20 billion richer than Musk and has reclaimed his spot as the world's richest person. Meanwhile, Indian businessman Gautam Adani ranks third in the billionaires index with $110 billion.
Reuters reported that when Tesla’s Shanghai plant reopens in January, it will do so for just 17 days, in a break from Tesla’s established practices. Shanghai has been battered by a fresh wave of Covid infections this month.
Tesla shares have fallen 73% from their record high in November 2021. The stock is down 69% in 2022, more than double the decline in the Nasdaq. Among major carmakers, Ford
is down 46% and General Motors
has fallen 43%. Since its IPO in 2010, Tesla has only fallen in one other year, an 11% drop in 2016.
Elon Musk attends The 2022 Met Gala Celebrating "In America: An Anthology of Fashion" at The Metropolitan Museum of Art on May 02, 2022 in New York City.
Musk's net worth peaked at just over $300 billion earlier this year. But a 68% year-to-date decline in Tesla stock has erased a large chunk of that, as more investors grow concerned about his committement to running the electric vehicle maker while also juggling his other business ventures.
Since Musk completed his $44 billion acquisition of Twitter in late October, shares of Tesla have dropped 50% compared to just a 3% decline for the Nasdaq 100. Musk has also sold billions of dollars of Tesla stock to fund his acquisition of Twitter.
Other factors hurting Tesla stock includes growing concerns of an economic recession in 2023, which would likely put a dent in the company's sales growth, and higher interest rates, which make growth stocks like Tesla less attractive to investors.
According to Bloomberg, Musk's SpaceX equity stake is now his most valuable asset, worth $47 billion. Meanwhile, Musk's Tesla stake is worth about $40 billion, while his options in Tesla are worth another $28 billion, according to Bloomberg.
The latest drop comes after The Wall Street Journal reported that Tesla will continue a weeklong production halt at its Shanghai facility, facing a fresh onslaught of Covid cases within its Chinese workforce.
Twitter is bleeding cash, and Musk is selling Tesla stock in big chunks. According to filings in mid-December, Musk sold about 22 million more shares of Tesla, which were worth around $3.6 billion, Earlier this year, Musk told his millions of followers on social media that he had “no further TSLA sales planned” after April 28.
After his latest stock sale, Musk said on Twitter Spaces on Dec. 22 that he would not be selling any stock for 18 to 24 months. In a debate with a Tesla shareholder, Musk pinned Tesla’s declining share price on Federal Reserve rate hikes, tweeting that “people will increasingly move their money out of stocks into cash, thus causing stocks to drop.”
For the month of December, Tesla has plunged 44%, by far its worst month ever, as it had never fallen more than 25% in a single month. And in the fourth quarter, the stock is down 59%, worse than its 38% drop in the second quarter of this year, which had been its worst period on record.
Last week, Tesla expanded discounts in North America for buyers of Model 3 and Model Y electric vehicles. Those discounts came after the automaker offered incentives in mainland China for December auto sales earlier this month.
Pressure is also mounting in the used-car market, with the average price for a used Tesla dropping 17% from July highs, and with used Teslas lingering longer than other makes before being resold.
Meanwhile, at Twitter
, Musk has continued to flirt with controversy, welcoming back previously banned users, enabling the continued releases of internal messages related to the company’s past handling of Covid and election-related content, and flip-flopping on policy changes.
Companies have paused or suspended paid advertising on the platform, prompting outbursts from Musk.
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