Elon Musk is no longer the world’s 2nd-richest person after Tesla shares lost a quarter of their value since January

Tesla CEO Elon Musk.
Tesla CEO Elon Musk.

Elon Musk on Monday lost his position in the Bloomberg Billionaires Index as the world’s second-richest person after Tesla’s shares fell another 2.2%.

He was unseated by LVMH Chairman Bernard Arnault, the luxury-goods tycoon. The billionaires are separated by a few million dollars on the list of the world’s wealthiest people.

Arnault has amassed a fortune of $161.2 billion, while Musk’s fortune fell to $160.6 billion, according to Bloomberg.

Musk’s drop in wealth was a direct consequence of Tesla’s stock falling 24% from its January high. The electric-vehicle maker’s shares spiked to an intraday high of $900 in late January but have slumped to about $580.

The company’s market capitalization has dropped below $560 billion from a peak of almost $870 billion. Wedbush said public-relations issues in China had hurt Tesla’s monthly sales.

Read more: UBS says to buy these 42 ‘new momentum’ stocks that are poised to outperform in a rising inflation environment

Musk nabbed the top spot on the list in January after Tesla shares skyrocketed amid a boom in technology stocks.

The Tesla boss was already having an eventful week in markets last week after his bitcoin U-turn triggered a wipeout of about $350 billion from the crypto market; bitcoin stabilized after he clarified that Tesla hadn’t sold any of its crypto holdings. His suggestions on how to improve the technical efficiency of dogecoin spurred small increases in the price of the meme-inspired cryptocurrency.

“Tesla is the poster child of the low or no earnings equity movement that has worked incredibly well, as markets saw ever-increasing central bank liquidity through 2020,” said Chris Weston, the head of research at the brokerage Pepperstone, adding that when Tesla moves it can become a momentum-and-trend juggernaut.

“That time is over, at least for now it seems, and in a world where market participants are debating the timing around a reduction in the Federal Reserve’s bond-buying program, and other central banks are already tapering theirs, the market has moved from high growth stocks to value.”

Tesla’s shares closed at $576.83 on Monday but were trading 0.2% higher, at $578.29, in Tuesday premarket trading.

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Jeff Bezos and Elon Musk increased their wealth by $217 billion in 2020. For this amount, over 100 million Americans could get $2,000 checks.

Elon Musk and Jeff Bezos.

  • Jeff Bezos and Elon Musk alone increased their net worth by $217 billion last year, according to Bloomberg. 
  • For this amount, more than 100 million Americans can receive $2,000 checks. 
  • Collectively, the net worth of the world’s 500 richest people rose to about $1.8 trillion, a 31% increase that represents the largest annual gain in the eight years that Bloomberg has tracked these figures.
  • Visit Business Insider’s homepage for more stories.

While many Americans were economically upended by the coronavirus pandemic, and now await a decision from Congress on whether they’ll receive a $2,000 stimulus check soon, the world’s richest people had raked in record gains in 2020. 

Last year, Jeff Bezos and Elon Musk collectively increased their net worth by $217 billion last year, an amount that could cut $2,000 checks for more than 100 million Americans. 

The world’s richest person, Amazon CEO Bezos, is now worth about $190 billion, according to the Bloomberg Billionaires Index. And Tesla founder and CEO Elon Musk took second place with about $170 billion, surpassing Microsoft’s Bill Gates. 

Musk’s net worth, in particular, grew the fastest in 2020, Bloomberg reported. His net worth is primarily made up of Tesla shares, of which he owns about 75%, according to Bloomberg. 

These figures come as millions of people in the United States remain jobless because of the economic devastation brought on by the coronavirus pandemic. 

Congress in March passed the first coronavirus stimulus package, which included $1,200 in direct payments to Americans. It was an attempt to offset the financial ruin after small businesses nationwide were shuttered to curtail the spread of the virus. 

Americans waited nine months to receive a second stimulus check. In December, Congress finally reached a deal on the second stimulus relief package, an agreement that included $600 checks to taxpayers. 

But the House and the Senate are once again at odds as House Democrats are pushing for $2,000 checks to go out. Senate Republicans, led by Majority Leader Mitch McConnell, have repeatedly struck down the effort.

Meanwhile, employment rates have been steadily rising in the US. But the November jobs report from the Labor Department said about 15 million people did not work that month because of the pandemic. 

Globally, the outlook is much grimmer. 

In a report released last year, the World Bank predicted that global poverty would rise in 2020 for the first time in more than two decades because of the coronavirus pandemic. 

“The newest and most immediate threat to poverty reduction, COVID-19, has unleashed a worldwide economic disaster whose shock waves continue to spread,” an overview from the World Bank reads. “Without an adequate global response, the cumulative effects of the pandemic and its economic fallout, armed conflict, and climate change will exact high human and economic costs well into the future.”

Collectively, the net worth of the world’s 500 richest people grew about $1.8 trillion last year, according to Bloomberg. It’s a 31% increase that represents the largest annual gain in the eight years that Bloomberg has tracked these figures. 

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