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Fourteen months after dethroning Jeff Bezos as the world’s wealthiest person, Elon Musk, CEO of Tesla and Twitter, lost his crown—at least temporarily—on Wednesday.
However, it is not Bezos who is to fault. On December 7, at 2:00 p.m. ET, Bernard Arnault surpassed Elon Musk for the second time today to become the world’s wealthiest person.
He was projected to be worth $184.7 billion, with Musk behind him by $100 million, valued at $184.6 billion.
When the markets in the United States closed at 4 p.m. ET, Musk had reclaimed the lead, with a net worth of $185.4 billion, $700 million more than Arnault.
According to Forbes, On September 27, 2021, Elon Musk surpassed Amazon’s Jeff Bezos as the world’s wealthiest person for the first time.
“I’m sending a big monument of the numeral ‘2’ to Jeffrey B., along with a silver medal,” Tesla CEO Elon Musk told Forbes in an email that day.
As of 10:50 a.m. EST Wednesday, Musk was the legal owner of the runner-up trophy once again. But it isn’t Bezos’ fault. For a short while late Wednesday morning, the world’s wealthiest person was Bernard Arnault of the French luxury goods firm LVMH.
After trading places with No. 3 world’s richest Bezos for much of 2021, Arnault sat atop Forbes’ ranking of the world’s wealthiest with a net worth of $185.4 billion (Musk was worth $185.3 billion at the time, and the pair have been periodically trading places ever since).
Musk regained the number one spot around 12:30 pm EST. The two men’s fortunes are practically identical – separated by just $200 million – so it’s not unexpected that they continue to fluctuate on list of the world’s richest.
Arnault added a few hundred million dollars to his fortune Wednesday morning, when shares in his luxury company rose.
However, with LVMH’s stock unchanged this year, Arnault’s re-emergence as the world’s wealthiest person is mostly due to the significant drop in Tesla’s share price.
This reduced the CEO’s net worth, which peaked at $320 billion in November 2021 when car rental company Hertz revealed a huge purchase from Tesla.
The firm to which Musk owes the majority of his money has had a difficult year. However, the stock has underperformed.
Tesla stock has down roughly 50% year to date. This is roughly 20 percentage points lower than the Nasdaq as a whole.
Musk is currently valued 43% less than his high in November 2021, while owning over 25% of Tesla in shares and options.
Tesla’s performance has been plagued by supply chain challenges, mainly owing to China’s zero-Covid policy, since it posted record sales and earnings in the first quarter of 2022, unlocking options for Musk valued $23 billion at the time.
Deliveries fell for the first time in two years in the second quarter, and although the business met analysts’ adjusted earnings per share projections in the second and third quarters, sales fell short in both.
However, Musk’s $44 billion Twitter purchase is mostly to blame for the company’s declining stock price, which has lost over half of its value since the transaction was announced on April 14.
Musk sold Tesla shares for $19.3 billion (pre-tax) from mid-April to early November, presumably to fund the purchase, putting downward pressure on the electric car maker’s price.
Furthermore, Tesla investors’ concerns that Musk would be distracted by Twitter have proved to be well-founded. Musk spent almost half a year attempting to find a way out of the Twitter purchase, but was eventually compelled to seal the transaction in late October.
He has now taken on the position of micromanaging CEO, immediately making a number of platform modifications that have been greeted with strong reaction from both users and advertisers.
Among them include charging $8 per month for account verification and reducing content monitoring on Twitter.
While Twitter is likely worth substantially less than the $44 billion Musk agreed to pay in April, the purchase hasn’t significantly reduced Musk’s riches.
Musk managed to collect $8.1 billion in stock commitments from a group of investors that included Twitter cofounder and former CEO Jack Dorsey after purchasing almost 9% of the firm at a discount in the public market before delinquently disclosing his plans.
Then, to fund his estimated 82% share, he burdened the firm with $13 billion in debt, keeping it off his personal balance sheet.
These moves have mainly compensated for Twitter’s projected 40% drop in value since April.
But it wasn’t enough to keep Arnault at bay on Wednesday. Another concern is if the Frenchman can maintain his position at the top.
History of Bernard Arnault
Bernard Jean Étienne Arnault (born March 5, 1949) is a business entrepreneur, investor, and art collector from France. He is the co-founder, chairman, and CEO of LVMH, Mot Hennessy – Louis Vuitton SE, the world’s biggest luxury goods firm.
According to Forbes, Arnault and his family have an estimated net worth of US$186.3 billion as of December 2022, temporarily making him the world’s wealthiest person.
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