It comes as no surprise that brainchild entrepreneur, Elon Musk, is no longer a multibillionaire. For years, he’s been setting the bar in some of the biggest industries in the world, and now he’s gotten hit in one of the most prominent ways possible – through his net worth. Recently, his net worth dropped significantly, and people are wondering why.
In short, Elon Musk lost his billionaire status primarily due to how much he invested in Tesla. Now, Tesla is profitable, but it took Elon Musk investing billions of dollars of his own money to make it happen. Whenever anyone has to put this much of their own money into a company, their earning power or net worth is affected, and it was the same for Elon Musk in this case.
However, besides his own investments, there are other reasons why Elon Musk’s net worth dropped. One reason his net worth dropped is because the value of stocks such Tesla’s have had a rough ride on Wall Street. Elon Musk’s personal stock is mostly Tesla, so as that went down, so did his net worth. Over the past year, Musk’s personal holdings in Tesla have dropped by about $8 billion.
In addition, financial analysts have speculated that the private funding Musk invested in SpaceX may have also contributed to his net worth drop. While SpaceX has launched rockets into space, and its satellites have sent images of Earth back down to us, these launches have been extraordinarily expensive. Musk has sunk millions of dollars of his own money into the project, and thus, put a major dent in his personal wealth.
Finally, Elon Musk’s net worth drop has been as a result of a number of headline generating activities on Musk’s own part. For instance, there was the infamous tweets calling a British diver “pedo guy” and allegations of fraud on the SEC against him. These have caused investors to steer clear of Musk’s projects and the value of his stocks to plummet.
The Impact of the Net Worth Drop
Elon Musk’s net worth drop has had a major impact on not just his business ventures, but on his emotional wellbeing. Analyst’s have said that in order to claw back the wealth Musk has lost, he’ll need to make considerable changes to Tesla’s current strategy. He’ll also need to stick to a strict no-nonsense approach when speaking publically if he hopes to keep investors from ditching his stocks in droves.
SolarCity, one of Musk’s companies, was also affected by the financial losses he’s suffered. The company recently had to lay off more than 10,000 workers in order to stay afloat. While the company had been profitable in the past, these recent losses have taken a toll on their ability to stay open.
In addition, Musk’s reputation has been affected too. His recent actions have caused investors to question their trust in him. Although some of his forward-thinking ideas have changed the world, his reputation has been seemingly marred by the tactics that he’s recently begun to employ.
Finally, the net worth drop has made it hard for Musk to attract younger entrepreneurs. As he no longer poses the same attractive presence as before, young people may feel like they can’t learn from him. While he still has plenty of admirers and supporters, his net worth drop has diminished his presence and influence in the entrepreneurial world.
Criticism of Elon Musk and the Net Worth Drop
Largely, the media has heavily criticized Elon Musk for his net worth drop. Most people have deemed his actions as reckless, despite his best intentions to change the world. People have questioned his competency in leading a company, as leadership was a major factor in the loss of his wealth.
Others have even said that Musk has mismanaged Tesla, and that he’s done a considerable amount of harm to the company’s brand. By repeatedly derailing from the company’s official mission, some have argued that he’s caused investors to lose confidence in Tesla’s prospects.
Additionally, some analysts have even suggested that Musk’s net worth drop could have been avoided if he had put his focus on his companies rather than on his own personal agendas. By investing millions of dollars in SpaceX, some are asking why he isn’t paying more attention to his core projects.
The final criticism leveled against Elon Musk is that he should have stuck to his original plan for Tesla. According to some, he changed the strategy too many times and has confused not just investors but his colleagues as well. While the original strategy outlined by Musk was groundbreaking, it has been difficult to move forward due to the constant changes he has made.
Musk’s Reaction to the Net Worth Drop
Despite the flurry of criticism and jabs that Elon Musk has endured, he’s remained silent on his net worth drop. There are theories as to why, but no one but Musk knows what he’s thinking.
Musk has also seemingly resolved to ignore the criticism entirely, and that may be due to his unwavering belief in himself. Musk has said that he has faith in his ability to turn Tesla around, and that no amount of criticism, no matter what it is, will shake his resolve.
On the other hand, Musk may be keeping quiet in order to simply stay out of trouble. Since some of the criticisms thrown at him have gone as far as alleging fraud, it is within reason that Musk would stay away from saying anything.
Finally, another possibility is that Musk is simply trying to take back control. It’s no secret that his actions have sometimes been chaotic or even reckless, so it may be the case that he’s trying to redirect his energy towards only the things that matter.
What the Future Holds
For now, it remains to be seen whether or not Musk’s net worth drop will be reversed. If current trends are anything to go on, it looks like the coming year could be a strong one for Tesla’s stock value. Although it’ll take a while to regain the losses suffered recently, it helps to know that the company’s stocks are going up again.
Tesla’s recent Gigafactory project may also prove to be a great boost for the company’s worth. With the recent introduction of Tesla’s Model 3, there’s potential for a massive demand for the vehicles and its parts in the future. This could also mean that Tesla’s stock will go up again, thus allowing Elon Musk to earn back some of his losses.
Analysts from some of the biggest investment firms have proposed that Musk should focus on retracting the money he loaned out to Tesla and SpaceX rather than redirecting his attention elsewhere. His current strategy appears to be successful, but it’s still too early to tell whether or not it will make enough of an impact to turn his net worth around.
Finally, the success of new products such as the Tesla semi-truck, Tesla Roadster and Tesla solar roof tiles could make all the difference. With Tesla venturing into a new direction, Musk’s net worth could soon start to rise once again.
Musk’s Strategies
In light of the current situation, Elon Musk has implemented a multi-pronged approach to trying to turn his net worth around. On the company front, he’s taken a more hands-on approach with Tesla. He’s now involved in the daily running of the company, overseeing every major aspect of Tesla’s operations from the production process all the way through to the promotion of the cars.
Alongside working on Tesla, Musk has also gone about developing new projects that could potentially bring back some of the money he’s lost. Multiple sources have reported that Musk has begun to work on a special project, the identity of which is still unknown. If it proves to be successful, then it is likely that Musk will be able to make back some of the losses he’s suffered.
Others believe that Musk’s biggest bet may be on the Hyperloop, a high speed train project he unveiled several years back. Although the project hasn’t quite taken off yet, it could be a great hit in the near future. Musk is said to be investing his own money into the project, and if it is successful, it could bring a considerable amount of value back to him.
Musk has also sought out the support of other tech giants, such as Google and Facebook, in order to help further some of his projects. Some believe that these companies have begun to show an interest in the Hyperloop, so if all goes well, it could result in a booming business venture for Musk.
Finally, Musk has begun to focus on streamlining Tesla’s current operations. He’s been spending a lot of time figuring out ways to cut costs, such as transitioning to electric car manufacturing and finding ways to reduce downtime.
Conclusion
Although there are many questions surrounding Elon Musk’s net worth drop, it’s clear that he’s not letting it stop him from continuing to pursue his passion and goals. He’s made some mistakes in the past and his net worth has suffered, but he’s nevertheless determined to overcome the odds and make a comeback.
The success of projects like the Hyperloop and Musk’s own strategies for turning Tesla’s current operations around, could mean that his efforts to regain his wealth are finally paying off. While it may take some time and hard work to get there, it can be said with certainty that Elon Musk will eventually make a return to his billionaire status.
