No, Elon Musk didn’t really lose $200 billion.

(Boursier.com) – Poor Elon Musk! According to the headlines of several major Anglo-Saxon media, the former richest man in the world has lost $200 billion since November 2021, which would constitute the largest loss of wealth ever. To support this thesis, the media in question, who generally do not carry Musk in their hearts, evoke the gap between certain indices that measure the net worth or wealth of billionaires. The Bloomberg Billionaires Index measured Musk’s net worth at $340 billion in November 2021, up from $137 billion now. The quirky businessman would therefore have lost more than $200 billion according to this measure, and would be “more than” the second wealthiest person in the world.

However, these measures do not make much sense. The bulk of Musk’s fortune in 2021 came from his stake in You are here. It was a completely virtual fortune. What’s a little more concrete is the $40 billion in hard cash the billionaire raked in in fourteen months by selling Tesla shares — much to the chagrin of certain investors in the capital city of the Texas electric car maker. The first sale of shares had been justified by the coverage of a heavy tax surcharge. Since then, the acquisition of social media network Twitter probably explains most of Musk’s additional Tesla stock sales. After his latest sell-off, the multi-billionaire said he feared a very severe recession due to the Fed’s monetary policy, which would also justify the need for an extra safety cushion in the event of a dark scenario.

These measures of billionaire fortunes are largely virtual, as most of the time they are based on one or more stakes in companies whose stock market prices fluctuate daily. We remember, for example, that Musk has long been neck and neck with Jeff Bezos for the first wealth spot in the world, according to variations in the stock market prices of Tesla and Amazon. His throne conquered, the insolent Elon had mocked the founder of Amazon and his position as ‘number two’ or ‘silver medalist’ – position which is now Musk’s in the various rankings in this style.

Forbes’ real-time ranking of billionaire fortunes differs slightly from Bloomberg’s, giving Musk a ‘worth’ of $146.5 billion right now. Forbes recalls that Musk co-founded six companies, including Tesla, SpaceX, Boring Co and Neuralink. The magazine estimates that between his shares and his options, Musk still controls 25% of Tesla, but has pledged more than half of his shares as loan security. SpaceX would be valued at $127 billion based on a May fundraiser. The latest capital raising by the Boring Company would value this entity at nearly 6 billion. Finally, Musk would now own about 74% of Twitter, but the social network is not publicly traded, it is no longer possible to know how much the market would value the company acquired for 44 billion dollars – estimated price overestimated by some.

To say that Musk lost $200 billion is therefore quite misleading. On the one hand, the comparison is made with respect to the historic peak of Tesla’s valuation, which was certainly ‘in a bubble’ in the short term due to the Fed’s range, which had boosted certain major tech stocks. On the other hand, some of Musk’s assets (especially Twitter, SpaceX or Boring Co) are difficult to assess, as they are unlisted companies. Finally, the market values ​​of the major billionaires’ holdings are completely virtual, insofar as the slightest significant sale of the executive’s securities would trigger a sharp downward market reaction (as was the case with Tesla). Such holdings will therefore not be transferable at market price, as the first sales declarations would cause the share price to fall. Therefore, rather than saying that Elon Musk lost $200 billion, it would be appropriate to say that he was never worth $340 billion.

Musk is no doubt aware that this fortune was only very virtual. “If you had a bad year because you lost money in the markets, remember that Elon Musk lost $200 billion and is still making jokes on twitter,” notes a Twitter parody account. Jerome Powell, eliciting an emoji-like reaction of indifference from Musk.

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