Billionaires Elon Musk And Jeff Bezos Have Lost $124 Billion This Year – Forbes

Tesla chief Elon Musk and Amazon founder Jeff Bezos.

When Tesla chief Elon Musk overtook Amazon founder Jeff Bezos as the worlds richest person for the first time last September, Musk told Forbes he was sending a giant statue of the digit 2 to Jeffrey B., along with a silver medal. Nearly eight months later, neither man is likely in a joking mood.

The U.S. stock market rout this year has seen to that, taking a massive chunk out of public company values. With inflation surging and interest rates rising throughout the first half of 2022, stock markets are facing some of the worst starts to a year in history. The S&P 500 just posted its seventh straight week of losses, its longest down streak since March 2001. And the Nasdaq just ended its worst month (April) since October 2008.

The fortunes of the 50 richest people on the planet (worth a combined $2.9 trillion as of last Fridays close) have shriveled by more than half a trillion dollars since the beginning of the year, according to Forbes estimates. No one has lost more than Musk and Bezos, whose net worths have cratered by a combined $123.6 billion from December 31 through Friday May 20.

Since the beginning of 2022, the fortunes of Elon Musk and Jeff Bezos have cratered by a combined $124 billion, Forbes estimates.

Bezos, worth an estimated $133.3 billion as of Friday, is $59.3 billion poorer than he was on December 31. Shares of Amazon have sunk by 35% over that period, outpacing the tech heavy Nasdaqs 27% drop over the same period. But compared to his rival Musk, Bezos, who stepped down as Amazons CEO to become executive chairman last July, may be more of a victim of circumstance with less control over his falling fortune.

Amazon is a work from home poster child and the stock has been crushed as the average consumer is now shopping in more normalized patterns than the last few years, says Wedbush analyst Dan Ives. In this risk-off market, Amazon along with other tech stocks have been under massive pressure.

Thats not to say that Bezos, who now ranks as the worlds third richest person after Bernard Arnault of French luxury empire LVMH (worth $142.3 billion as of Friday, after seeing a $57.2 billion drop since December 31), is sitting idly by as his fortune dwindles. In fact, the typically reserved Amazon chairman has ripped a page out of Musks playbook, taking to Twitter to criticize the Biden Administration for stoking inflation with its spending.

Musk, who briefly became the first person ever to be worth $300 billion or more when Teslas market capitalization surpassed $1 trillion twice in November and January, has also faced headwinds out of his control for example, production issues in China due to the countrys latest round of Covid lockdowns. But hes also played a more active role in sending his own fortune down tens of billions to $207.3 billion; hes down $113 billion from his all-time peak on November 4 and down $64.3 billion since the end of December.

Most of the 37% decline in shares of Tesla so far this year through May 20 has come in the past six weeks. The electric vehicle makers stock has fallen by 35% since April 13, the day before Musk announced his $44 billion Twitter takeover. That is double the Nasdaqs 17% loss over the same period. The acquisition has overshadowed the record revenue and profits Tesla reported for its most recent quarter on April 20. Musk did earn $23 billion worth of performance-based options that day (now worth $15 billion), partially offsetting the drop in his fortune.

Wedbushs Ives earlier summed up Tesla investors concerns about the Twitter acquisition, noting that worries about Musk selling Tesla stock to pay for the Twitter deal and distraction fears for Elon are causing a bear festival on the name.

The deal to acquire Twitter has certainly been distracting. Tesla investors briefly rejoiced on May 13, when Musk tweeted that the takeover was on hold over concerns about the number of spam and fake accounts on the social media platform, leading many to speculate that hes looking for a way out because tech stocks had tanked since he made his $44 billion offer. But the celebration ended quickly, when Twitters board responded in a statement to the New York Times last Tuesday that it intends to close the transaction and enforce the merger agreement between the company and Musk, hinting at the possibility of litigation.

Tesla investors are still faced with the question of how Musk will finance the $27.3 billion equity commitment he made to Twitters board, with little more than $8 billion of cash on hand, according to Forbes estimates. Hes pledged not to sell any more Tesla shares, after unloading more than $8 billion worth (pre-tax) last month, but he may not have any other choice. Given Twitters limited free cash flows and the falling value of Tesla shares that would likely be required as collateral, Musks bankers may be reluctant to lend him any more money (hed already pledged more than half his Tesla stake as collateral for other loans before pursuing Twitter). And with sexual misconduct allegations (which Musk denied on Twitter) now hanging over his head, outside investors may be hesitant to chip in for a deal he was forced to close. (Musk has not responded to Forbes request for comment).

According to Columbia University law professor John Coffee, Musk could be forced to sell a lot of his Tesla stock (which is his only real asset). That will drive the price down and some shareholders in anticipation of such sales are getting out early. (Forbes estimates that Musk holds a 47% stake in his rocket producer SpaceX worth $42.7 billion, though as a private company it is much less liquid than his Tesla shares).

Musk may have an opportunity to win back some Tesla shareholders with additional clarity regarding his plans at Twitters annual shareholder meeting this Wednesday, which Wedbush analysts Dan Ives and John Katsingris described in a note as a fork in the road situation [for Musk] in which he has to decide his next step in this soap opera as Tesla investor patience is wearing very thin.

The path forward for Bezos may be even less certain, largely dependent upon macroeconomic factors and investors rediscovering their appetites for tech stocks. But despite the challenging start to 2022, Bezos and Musk remain a combined $203 billion richer than they were at the beginning of the pandemic in March 2020.

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Billionaires Elon Musk And Jeff Bezos Have Lost $124 Billion This Year - Forbes