Musk's Position as World's Richest at Risk Due to 'Twitter Risk'

Tesla Stock Plummets... Temporarily Yields No.1 Title to Louis Vuitton Chairman

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Yujin Cho] As the 'Twitter acquisition risk' has come to the forefront and Tesla's stock price fails to escape a downward trend, Elon Musk, Tesla's Chief Executive Officer (CEO), has temporarily lost the title of the world's richest person.

According to the real-time billionaire rankings compiled by the U.S. financial magazine Forbes, on the 7th (local time), Bernard Arnault, chairman of Louis Vuitton Moet Hennessy (LVMH), briefly surpassed Musk in net worth, claiming the top spot as the world's richest person.

Foreign media reported that Musk temporarily lost the title of the world's richest person due to the sharp decline in the value of Tesla shares and the impact of the $44 billion (approximately 58 trillion KRW) acquisition of the social media platform Twitter.

With a slight rebound in stock price due to intraday bargain buying, Musk regained the position of the world's richest person by a narrow margin. As of 9:50 a.m. Pacific Time that day, Musk and Arnault's net worth were recorded at $185 billion and $184.7 billion, respectively.

Musk had maintained the title of the world's richest person for over a year after surpassing Amazon founder Jeff Bezos in September last year, but the decline in Tesla's stock price has made holding onto the top spot uncertain.

Tesla's stock price, which had been on a steady decline since the beginning of the year, plunged more than 3% in the New York stock market that day. The market was sluggish amid expectations of further interest rate hikes by the U.S. Federal Reserve (Fed), and the stock was hit by rumors of production cuts at the Shanghai factory in China.

Since Musk announced his intention to acquire Twitter, Tesla's stock price has plummeted more than 47%, making the 'Twitter risk' a major negative factor weighing down Tesla's stock price.

Concerns have grown that while Tesla's core automotive business faces worsening external conditions and performance worries, Musk is focusing more on managing Twitter, which he recently acquired.

Bloomberg News pointed out that the automotive industry is going through a difficult period due to unfavorable business conditions such as rising raw material costs caused by inflation and concerns about a recession leading to weakened automobile demand, and expressed hope that Musk would concentrate on managing Tesla.