14 Dec 2022

Elon Musk no longer world's richest man, 'Twitter circus' blamed

1:45 pm on 14 December 2022
(FILES) In this file illustration photo taken on April 14, 2022 a phone screen displays the Twitter account of Elon Musk with a photo of him shown in the background, in Washington, DC. - Tesla boss Elon Musk's road to turning Twitter into a money-making platform where anyone can say anything looks to experts like a tough one. Musk's $44-billion deal to buy the global messaging platform must still get the backing of shareholders and regulators. (Photo by Olivier DOULIERY / AFP)

Musk is chief executive and the largest shareholder in Tesla, and its share price has been plummeting. Photo: AFP

Elon Musk is no longer the world's richest man after a sharp drop in the value of his shares in electric car company Tesla this year.

According to both Forbes and Bloomberg, Musk has been overtaken at the top spot by Bernard Arnault, the chief executive of luxury goods group LVMH.

Musk is chief executive and the largest shareholder in Tesla, with a reported stake of about 14 percent.

He completed a US$44 billion takeover of social network Twitter in October.

According to Forbes, Musk is now worth about US$178b (NZ$276b).

Meanwhile, Bernard Arnault has a value of US$188b (NZ$291b).

Musk's Twitter deal was only completed after months of legal wrangling, and some have cited the distraction of the takeover as one of the factors behind Tesla's share price fall.

After building a stake in Twitter at the start of the year, Musk made his US$44b offer in April, although many considered this offer to be too high.

In July, he pulled out of the deal, citing concerns over the number of fake accounts on the platform.

Eventually Twitter executives took legal action to hold Musk to his offer.

Bernard Arnault.

Bernard Arnault. Photo: Eric PIERMONT / AFP

Dan Ives from investment firm Wedbush Securities said the "circus" surrounding the Twitter deal has weighed on Tesla's share price.

"Musk has gone from a superhero to Tesla's stock, to a villain in the eyes of the Street, as the overhang grows with each tweet," he told the BBC.

"The Twitter circus show has hurt the Musk brand and it's a major overhang on Tesla's stock. Musk is Tesla and Tesla is Musk."

Musk sold billions of dollars' worth of Tesla shares to help fund his purchase, which helped to push the shares down.

Investors have also been concerned that demand for the company's electric cars may slow, as the economy weakens, higher borrowing costs discourage buyers and other companies boost their electric vehicle offerings.

Tesla has also been hit by recalls, as well as government probes of crashes and its autopilot feature.


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