BAD press and an uninspired stock market has tugged on Elon Musk’s wealth and endangered the Twitter acquisition deal.
2022 has been as unkind to the richest man in the world.
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This year, Musk has been spurned by environmentalism regulators, a sexual misconduct scandal involving him has hit the press and he’s lost $69billion since the year began five months ago.
Much of his wealth is tied up in Tesla stock – he owns 175million shares or 17% of the company.
The Tesla stock has been hit particularly hard in 2022’s messy market – the share price is down 40% in the last six months, representing substantial unrealized losses for Musk.
Musk used a chunk of his stock as collateral so lenders would underwrite part of his $44billion dollar bid to buy Twitter – the Tesla stock dip is jeopardizing the loans he secured for the buyout.
Tesla is facing the hard economic factors affecting the entire stock market – the conflict in Ukraine, inflation and international political uncertainty is pulling the market down across all sectors.
Meanwhile, legacy automakers like Chevrolet and Toyota have bitten into Tesla’s market share of electric vehicles.
The Wall Street Journal reported that if Tesla’s stock tanks any further, lenders could demand Musk post even more stock as collateral to keep the deal afloat.
In a tweet, Musk admitted that he’s spending less than 5% of his time on the Twitter deal and that Tesla is at the front of his mind at all times.
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Musk’s gains from the last two years have been criticized as unethical opportunism.
While the world suffered through a pandemic, Musk’s wealth grew by $130billion dollars from 2020 to 2021.
Musk and other billionaire titans’ rapid wealth accumulation inspired Senator Bernie Sanders to draft the Make Billionaires Pay Act – the bill eventually petered out and stalled in committee.
Inspired journalists at ProPublica hunted down Musk’s tax data and revealed he had skirted paying a reasonable share for years.
Musk is at next-to-no risk of “going broke” – after all, these losses are technically on-paper and could be reversed by a Tesla stock spike.
If the Tesla stock dropped to zero, the Twitter deal would certainly be kaput but he would still have his holdings in SpaceX, Neuralink, The Boring company and various cryptocurrencies.
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