2022 was a tough year for businesses, big tech, and billionaires such as Elon Musk who has been given the title of the biggest loser in human history. Big names such as Apple and Meta were not left out of the effects of inflation and worries investors had as a result of envisioning a recession. For perspective, in 2022 Meta lost about two-thirds of its value and is now worth $324.37 billion as of the time of this draft, according to NASDAQ. Meta was once a trillion-dollar company valued at over $1 trillion. Apple which is known to be the biggest company in the world lost the title at some point to Saudi oil company Aramco, showing how tough the business environment was last year.
Also, around the world, several companies including big names like Meta, Tesla, etc., laid off workers as part of their strategy for surviving the harsh business environment. Meta alone laid off 11,000 workers globally. Tesla cut off ten percent of jobs and this affected even top positions.
Businesses such as Big Tech and even cryptocurrency, coupled with the aforementioned factors, are failing to experience a shift to at least some of the boom they experienced during the pandemic period. As the effects of the pandemic continue to slowly fade away, many of these companies are yet to make their post-Covid bounce back but 2023 is expected to be a better year for segments like Big tech. Several predictions have already arrived for the cryptocurrency industry, and on average, it does not look good for the industry. NFTs on the other hand is expected to grow out of the shadow of cryptocurrencies and even become a leader in the space.
Billionaire and CEO of sibling companies Tesla, Space X, The Boring Company, Neuralink, OpenAI, and Twitter, and the President of the Musk Foundation, was the second person after Jeff Bezos to ever amass a wealth of more than $200 billion after Amazon’s founder Jeff Bezos. Well, he’s also made a new record as the first and only person to lose $200 billion following the losses incurred from Tesla shares tumbling in recent weeks, and probably the controversy surrounding him since he assumed the role of CEO after acquiring Twitter.
As of the time of writing this draft, the billionaire’s net worth had dropped to $146.5 billion after peaking at $340 billion on the 4th of November 2021, becoming the world’s richest man. He has since been replaced by Bernard Arnault, the CEO of LVMH – the world’s largest luxury goods company.
With a net worth of $137 billion at the end of 2022 and how Elon Musk’s net worth climbed between then and now, the possibility of the billionaire reclaiming the title of the world’s richest man could only be a matter of weeks or even days. Days after he lost the title to Jeff Bezos last year, the billionaire regained the title. Elon Musk has also been adjudged as the person with the highest possibility of becoming the world’s first trillionaire.
Tesla And Elon Musk’s Wealth
With a valuation of over $300 billion, Tesla is one of the most valued companies owned by Elon Musk. The company which focuses on meeting the demand of both users and the environment by powering its cars with electricity instead of detrimental fossil fuels, exceeded a $1 trillion market capitalization for the first time in October 2021, joining the global most-valued companies like Apple Inc., Amazon, Alphabet, and Microsoft.
Although Tesla has only a tiny share of the overall auto market, the company is a global leader when it comes to electric vehicles.
In 2022 alone, Tesla stock plummeted 65 percent and this has a direct correlation with the net worth of its CEO. Although the prices of stock move up and down every now and then, the number of times and rate at which these declines happened in 2022 were sources of worry for investors and analysts. According to the opinions of several analysts, these downwind began following controversies following his intention to acquire social media company Twitter and eventually his acquisition of the company.
The billionaire has received several criticisms for the way he’s handling his “free speech” Twitter as people have complained of how dangerous the platform has become. A handful of several famous people have also publicly left the platform. His Twitter business eventually began to affect his other businesses, because customers will always see companies owned by the same entity as one, hence people have been showing aversion towards Tesla’s products and moving for other rivals. The company is also facing increasing competition from several competitors who are slowly but gradually coming to par.
Tesla announced two rebates offering discounts to buyers who would purchase Tesla vehicles before the end of 2022. The first, announced in early December saw a cut of $3,250 and the second which was announced last week saw a discount of up to $7,500 off the price of its Model 3 and Model Ys sold in the US last December. Although the discounts were in response to the Inflation Reduction Act’s EV tax credits, Tesla could have also used this to ramp up sales. The company also provided similar discounts in Mexico and China, and it is still unclear how this would reflect in its margins. The company failed to meet its guidance for deliveries for both the fourth quarter and full year of 2022.
In the fourth quarter of 2022, Tesla reported deliveries of 405,278 vehicles while Wall Street’s expectations were in the range of 420,000 to 425,000. Fourth quarter deliveries which was a record were up from the 343,830 vehicles sold in the third quarter of 2022. Tesla had a total production of 439,701 vehicles in the fourth quarter, bringing its total production for 2022 to 1.37 million. The company’s full delivery for 2022 came in at 1.31 million vehicles.
Investors were not only unhappy with the discounts Tesla offered in December (something the company had never done before and worse, discounts of that value), but were also discontented with the delivery numbers the company reported. Tesla stock has plummeted about 12 percent just a day after it released its delivery numbers.
Prior to the aforementioned development, investors had several worries running through their minds and after Elon Musk reportedly converted over $20 billion worth of Tesla shares to fund his acquisition of what they deemed an overpriced Twitter. The billionaire sold so much of his Tesla shares to fund his acquisition of Twitter that they are no longer his biggest asset, according to Bloomberg. In December alone, Tesla stock dropped by about 37 percent.
There were also concerns about Tesla from investors over Elon Musk’s criticism of the Federal Reserve for increasing interest rates. As expected, on December 16th, Elon Musk Twitted that “Tesla is executing better than ever! We don’t control the Federal Reserve. That is the real problem here.”
The “court of public opinion” also has a role to play in Elon Musk’s losses as people were raged by several actions he took after he took over as Twitter’s boss. The new CEO went ahead to unban accounts that were banned for breaking several Twitter policies as if to say to people “what can y’all do? I’m in charge.” He also introduced payments for features like verification which caused chaos and hit his Tesla business. He also managed to meander his way out of the situation after the whole #RipTwitter trend which saw people tweet their goodbyes as they envisaged the platform packing up. This fold-up was expected as Twitter employees were leaving the company because of how “dictatorial” Elon Musk had become. The CEO even went as far as giving an ultimatum to those who were not ready to abide by the set-out rules to leave.
Seemingly tired of his shenanigans and maybe he was starting to listen to his investors and the court of public opinion, the Twitter CEO asked his fans on Twitter what they thought about him stepping down from the position via a poll. Over 50 percent of the people who voted wanted him to step down from the position. Elon Musk promised to abide by these results and promised to step down as soon as he finds a suitable replacement, which his investors and “everyone” agrees is the best decision he may ever make concerning Twitter.
There is a direct correlation between how Tesla fares and Elon Musk’s wealth. Although the electric vehicle maker suffered several blows last year, it remains not only the market leader in the electric vehicle segment but also one of the biggest carmakers in the world. Tesla is even worth more than some of the biggest automakers globally with its current valuation of over $300 billion. As seen during the time Jeff Bezos replaced him as the world’s richest man before he bounced back, Elon Musk is expected to reclaim the title as soon as Tesla gets back on its feet. Tesla is also expected to regain its trillion-dollar valuation but there are several opinions that suggest that this will only be possible as soon as Elon Musk takes away his focus from Twitter and fixates it on the electric vehicle company.