He looked like an entrepreneur of the century and was still the richest man in the world in 2021. Now his empire is threatened with collapse. Tesla loses a billion in value every day, Twitter is threatened with bankruptcy. World's richest man is now an anti-Musk from Europe.
A year ago, Elon Musk thought he was the richest person in the world. His car company Tesla was worth more than a trillion dollars on the stock exchange. The rockets of his space company SpaceX overtook NASA, even a private moon mission was launched. He set out to take over the communications group Twitter and acted like the Superman of the digital era for a whole generation of start-up entrepreneurs. A parade free spirit and mega doer. From Los Angeles to Mumbai, young people proudly wore his likeness on T-shirts like another generation wore Che Guevara's.
But in 2022 the hero fell. Musk is one of the global losers of the year. And three times over.
First, in absolute terms, Tesla stock has suffered one of the largest losses in stock market history. Almost two-thirds of Tesla's market capitalization has evaporated within 13 months. The company is now worth around $460 billion. Arithmetically, Tesla lost one and a half billion dollars a day in 2022. And the crash may not be over yet. Because Tesla makes significantly less sales or profit than Mercedes, but is still worth seven times as much on the stock exchange. The grotesque overvaluation of Musk stock should therefore be corrected further. More and more analysts are warning investors about the former stock market darling, also because the competition for e-cars is now equal. Even Musk himself is dumping huge stock packages these days to use the money to rush off on other adventures. This, in turn, drives the downward spiral at Tesla further down. Most recently, between December 12 and December 14, he sold nearly 22 million Tesla shares for a total of nearly $3.6 billion. It was the fourth time this year that he had sold billions of dollars in Tesla shares, which was instrumental in financing the controversial $44 billion Twitter purchase.
Second, Musk threatens to fail spectacularly with his huge investment on Twitter. He himself says that the group has been "on the fast track to bankruptcy" since May. The company would currently burn four million dollars a day. In fact, Twitter has only made losses in 10 of the last 12 years. The debt is now in the tens of billions. The company added nearly $13 billion in new debt to its balance sheet from the acquisition alone, and now has about $1 billion in interest costs a year. Ascending trend. As interest rates rise, the air for Twitter is getting thinner. Twitter hardly seems to be able to cope with the burden on its own.
At the same time, the advertising revenue, from which Twitter lives 90 percent, is at risk because Musk is politicizing the platform and moving to the right. Advertisers and users are withdrawing. Musk is trying to save himself by cutting staff and has fired thousands of employees using crude methods. But that triggers additional chaos in the group, because many vital executives have meanwhile fled Twitter. Among them are specialists who were responsible for the security of the platform and for compliance with the law. So trouble is threatening from all sides.
Financial analysts are vociferous in warning that Musk may have overpaid the $44 billion and overreached himself. The bankruptcy is now considered a realistic scenario on Wall Street, possibly also for Musk himself. Because a bankruptcy of Twitter could at least help him buy time and restructure the crushing debt in a way that is more favorable to him. US media still call Twitter Musk's "Nightmare" - his nightmare.
In order to possibly get himself out of the line of fire, Musk has now had Twitter users vote on whether he should remain in office there as CEO at all. Of the 17.5 million votes cast, 57.5 percent were in favor of resignation and 42.5 percent against. Musk had previously assured that he would stick to the result of the vote.
Third, Musk is experiencing a plummet in his public image. Ever since he presented himself to the public as a right-wing populist opinion maker, he has faced fierce opposition. Concerns are growing in politics and society that the multi-billionaire could use the world's most important short message service as a political weapon. He had several Twitter accounts of US journalists who had criticized him blocked for a short time, but demonstratively activated Donald Trump's account again.
Investors are increasingly irritated by his eccentric way of communicating and leading. His brutal approach to dismissing employees not only shocked employees. In the general public, he is no longer viewed as a cool, successful entrepreneur, but rather as an irresponsible, vain player. Forbes magazine diagnoses: "Musk's popularity has been falling since he bought Twitter. The go-getter billionaire made a series of ill-considered changes to the social media platform, imposed mass layoffs, inadvertently triggered an exodus of advertisers and went online regularly his critics, often coming across as thin-skinned and unapproachable."
The crash of the high-flyer is finally reflected in the "Forbes" ranking of the world's richest people. Musk has been knocked out of the top spot there. He has to cede the leadership to the French Bernard Arnault, head of the luxury goods group LVMH Moët Hennessy - Louis Vuitton SE. Arnault embodies almost an alternative to Musk. Arnault is a self-confessed liberal, fights against right-wing populism and supports French President Emmanuel Macron. Unlike Musk, he relies on cultivated manners and style. Arnault plays the piano where Musk can only whistle. And where Musk embodies the modern tech world, Arnault is the incarnation of the old world. Ironically, an old-fashioned European who makes his fortune with classic, non-digital products such as jewelry, champagne, fashion, perfume and leather goods dethrones Musk.
