Elon Musk’s fortune was worth an astronomical $340 billion just over a year ago. Less than half of that is left. While other tech billionaires are watching their mega-wealth shrink, representatives from other industries are passing them by.
Since he took over Twitter, Elon Musk has made even more and even wilder headlines than in previous years: sometimes he fuels absurd conspiracy theories, sometimes he insults US politicians or government employees, throws thousands of Twitter employees out and a short time later tries to get a part to win back from it. It is always mentioned: This man, who seems completely unpredictable, is the “richest person in the world” – until now. Musk has been at the top of the super-rich list for more than a year, according to Bloomberg’s Billionaires Index. Now he has been dethroned by Frenchman Bernard Arnault.
Arnault’s wealth recently rose to $171 billion, according to Bloomberg calculations. Musk’s wealth, on the other hand, has been falling for over a year. At the beginning of November 2021, Musk’s fortune had grown to the almost unimaginable record value of $ 340 billion that had never been reached before or after. Some analysts predicted the entrepreneur was on course to become the first “trillionaire” in history.
But since that peak, the value of Musk’s companies and holdings has shrunk by more than half. This has only a small part to do with the headlines he’s been making of lately. To buy Twitter, Musk had to sell shares in its most valuable company, Tesla. However, the value of the short message platform is likely to have fallen significantly recently.
The main factor behind the change at the top of the billionaire index is the change in monetary policy since last year. Inflation is back, central banks around the world are raising interest rates and pumping less money into markets. The “years of cheap” money, the so-called investment crisis, because there were hardly enough profitable investment opportunities for the large amounts of capital, are over. Above all, the sometimes astronomical valuations of technology companies are affected by this “interest rate turnaround”. The shares of the electric car manufacturer Tesla, whose boss and major shareholder is Musk, lost more than 50 percent in value this year alone.
Other billionaires from the technology industry, who have dominated the top billionaire rankings in recent years, have also seen their fortunes shrink significantly recently. Amazon founder Jeff Bezos, who for a time was considered the richest person in the world before Musk, lost 40 percent of his wealth this year, largely due to the fall in Amazon shares. Bezos’ net worth is now “only” $116 billion.
The rise of the Frenchman Arnault to the top of the Bloomberg table, on the other hand, shows how well traditional sectors, the so-called old economy, are holding up during the crisis compared to the technology sector. Arnault’s wealth mainly consists of his 48 percent stake in luxury giant LVMH, which owns numerous heritage brands such as Louis Vuitton, Moet Hennessy, Dom Pérignon, TAG Heuer watches and many more. Arnault’s wealth had also shrunk at times during the current global economic crisis, but less dramatically than that of tech billionaires like Musk or Jeff Bezos. In addition, LVMH’s share price, and thus Arnault’s fortune, has increased significantly again in recent months.
Another representative of the old economy who rose spectacularly in the ranking of the rich during the crisis is the Indian entrepreneur Gautam Adani. With wealth increasing by more than 60 percent this year alone, he has outperformed the super-rich Jeff Bezos, Bill Gates and Warren Buffett, among others, and is only third on the Bloomberg list behind Elon Musk. Adani’s assets are mainly in the infrastructure group Adani Group, which is, among other things, India’s most important port operator and also produces and trades in coveted commodities such as coal during the crisis.