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Thursday, February 9, 2023

Elon Musk could lose world’s richest person title as Tesla value almost halves | Tesla


Tesla has lost nearly half its market value since its founder, Elon Musk, bid for Twitter in April, reducing his net worth by about $70bn and putting his title as world’s richest person at risk.

Shares in the electric car company traded at $340.79 on 13 April, the day before Twitter revealed in a securities filing that the billionaire had made a hostile bid to buy the social media company for $43.4bn. Since then the Tesla share price has plunged by 49% to $173.44 (£141.29), also due to concerns around disruptions at one of its factories in Shanghai.

The Tesla boss has sold $20bn of Tesla shares since April to fund the buyout. He now owns 445m shares, according to Reuters, and the share price decline has reduced the value of that holding, from $151bn to $77bn.

This means his claim to be the planet’s wealthiest person is under threat, with France’s Bernard Arnault, chief executive of the luxury group LVMH, snapping at his heels. On Wednesday, share movements meant Arnault briefly took top spot.

Musk has said of his Twitter takeover: “Having a public platform that is massively trusted and broadly inclusive is extremely important to the future of civilisation.”

However, Tesla shareholders worry about how he is dividing his time between the social media site and his many other ventures such as the rocket company SpaceX, and that running Twitter is too much of a distraction.

Adding to those concerns, Musk’s bankers are considering replacing some of the $13bn high-interest debt that he used to buy the platform in October with margin loans backed by Tesla stock, Bloomberg reported.

However, the billionaire tweeted: “When there are macroeconomic risks, it is generally wise to avoid using margin loans on any company, as stocks may move in ways that are decoupled from their long-term potential.”

He is under pressure to turn around Twitter, which was already struggling before he bought it, making a $221m net loss last year.

Since the acquisition, Musk has fired about half of Twitter’s workforce, roughly 3,700 employees, while hundreds more subsequently resigned. The company faces a number of lawsuits over the sackings and other issues. This week it also came under investigation by city officials in San Francisco after a complaint that the company allegedly converted rooms in its headquarters to sleeping quarters.



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