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    Elon Musk Is No More The Richest Man In The World

    Fourteen months after dethroning Jeff Bezos as the world’s richest person, Elon Musk, CEO of Tesla and Twitter, lost his crown—at least temporarily—on Wednesday. But it is not Bezos who is to fault.

    Note: At 3:30 p.m. ET on December 7, Bernard Arnault surpassed Elon Musk to become the world’s richest person for the second time today. He was estimated to be worth $184.7 billion, with Musk trailing him by $100 million, valued at $184.6 billion. Musk had reclaimed the lead when US markets closed at 4 p.m. ET, with an estimated net worth of $185.4 billion, or $700 million more than Arnault. Forbes will keep you updated on the changes in the ranks.

    Elon Musk surpassed Amazon’s Jeff Bezos as the world’s richest person for the first time on September 27, 2021. “I’m sending a big monument of the digit ‘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 more. But it is not Bezos who is to fault.

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    Bernard Arnault of the French luxury goods group LVMH was the world’s richest person for a brief period late Wednesday morning. After trading places with No. 3 on Forbes’ list of the world’s wealthiest, Jeff Bezos, for much of 2021, Arnault sat atop Forbes’ list of the world’s wealthiest with a net worth of $185.4 billion (Musk was worth $185.3 billion, and the duo have been periodically trading places ever since).

    Musk reclaimed first place around 12:30 p.m. EST. The two men’s fortunes are practically identical – divided by about $200 million – so it’s not surprising that they continue to fluctuate in Forbes’ list of the world’s wealthiest.

    Arnault’s fortune grew by a few hundred million dollars Wednesday morning, as shares of his luxury business rose. However, with LVMH’s stock flat this year, Arnault’s re-emergence as the world’s richest 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 order from Tesla.

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    The firm to which Musk owes the majority of his money has had a difficult year. However, the stock has underperformed. Tesla stock is 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 peak in November 2021, while owning over 25% of Tesla in stock and options.

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    Tesla’s performance has been plagued by supply chain challenges, mainly due to China’s zero-Covid policy, since it posted record revenue 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 while the business met analysts’ adjusted earnings per share projections in the second and third quarters, revenue fell short in both. However, Musk’s $44 billion Twitter acquisition 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 worth $19.3 billion (pre-tax) from mid-April to early November, presumably to finance the acquisition, putting downward pressure on the electric vehicle maker’s stock. Furthermore, Tesla investors’ concerns that Musk would be distracted by Twitter have proven to be well-founded. Musk spent nearly half a year attempting to find a way out of the Twitter acquisition, but was eventually compelled to seal the deal in late October. He has now taken on the position of micromanaging CEO, immediately making a number of platform modifications that have been met with strong backlash 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 acquisition hasn’t significantly reduced Musk’s fortune. 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 acquiring nearly 9% of the firm at a discount in the public market before delinquently disclosing his plans. Then, to finance his estimated 82% share, he burdened the company with $13 billion in debt, keeping it off his personal balance sheet.

    These moves have mostly compensated for Twitter’s estimated 40% drop in value since April. But it wasn’t enough to keep Arnault at bay on Wednesday. Another question is if the Frenchman can maintain his position at the top.

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