Elon Musk's net worth dips below $200B as Tesla shares drop
Some experts are blaming Musk's recent Twitter takeover
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Tesla CEO Elon Musk saw his net worth fall below the $200 billion mark on Tuesday as shares of the electric vehicle giant hit a 52-week low, sparking murmurs that his recent acquisition of Twitter is a distraction giving investors the jitters.
But he still holds the title of world's richest man, and some financial experts say the concerns connecting Musk's social media takeover to Tesla's stock performance are overblown. Others say the connection is clear.
Elon Musk's net worth fell below $200 billion on Tuesday, but he remains the world's richest person. (AP Photo/Jae C. Hong, File / AP Newsroom)
Forbes was first to report on Musk's fortune falling to roughly $195.6 billion as of around 10am, noting that his net worth has dropped by over $74 billion since he announced in mid-April that he would be taking over Twitter.
George Schultze, founder of Schultze Asset Management, says he agrees that Musk is too distracted to run Tesla, Twitter, and The Boring Company effectively as the CEO of all three.
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"There are only so many hours in the day – how can a CEO effectively run multiple global enterprises without mistakes?" Schultze told FOX Business. "Sure, Musk is smart, but it looks like he may have bitten off more than he can chew."
Tesla founder Elon Musk attends Offshore Northern Seas 2022 in Stavanger, Norway, Aug. 29, 2022. (NTB/Carina Johansen via REUTERS / Reuters Photos)
As for the turmoil that has occurred since Musk officially took the helm at Twitter a few weeks ago, Schultze says a lot of that could have been prevented. He says Musk did not conduct sufficient due diligence before agreeing to buy Twitter, which is why the "bot" problem with fake user accounts was not discovered sooner.
Schultze says there was also a lack of pre-closing integration.
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"Musk and his team should have spent more time working with Twitter prior to closing the acquisition to make sure customers would be comfortable with the go-forward plan," Schultze told FOX Business. "Instead, he entered immediate crisis mode as multiple big customers announced their plans to stop advertising on Twitter."
Steve Miran, co-founder of Amberwave Partners and FOX Business contributor, says that typically, movements in stock prices at large companies with tens of thousands of employees are about more than headlines about one particular person, even someone as central to a company as Elon Musk is to Tesla.
The Tesla Inc. logo is seen on the grille of a Model X electric vehicle at the Moscow Tesla Club in Moscow, Russia, on Friday, July 20, 2018. (Photographer: Andrey Rudakov/Bloomberg via Getty Images / Getty Images)
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 339.64 | -2.39 | -0.70% |
"The biggest issue for Tesla right now is that the global economy is likely headed into a deep recession sometime in the next few quarters, and that usually kills demand for new cars," Miran said.
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"Tesla is particularly vulnerable to drops in consumer spending given that electric cars are a luxury item, even after heavy government subsidies are taken into account," he continued. "For a growth company that trades at PE ratios significantly above the rest of the market, small changes in expectations can lead to big changes in share price."