If you ever had to explain and give an example of how macro factors influence money in your bank account, Elon Musk would be the first to jump up and say, “Nobody can teach you that better than me.”
Elon Musk. Photo: Getty Images
Elon Musk’s wealth was about 200 billion dollars this week has begun. But as tensions between Ukraine and Russia escalated and Vladimir Putin announced a “military operation” in Ukraine, global stock markets experienced a raging bloodbath as markets fell with momentum. Obviously, as stock prices of all stocks fell, so did Tesla’s stock prices.
When the markets opened on February 22, Tesla’s stock price was around $834.5 (i.e. Rs 62,831), which fell to $831.39 on February 23, and well that the US stock market has not yet opened on February 24; at the time of writing, the share price stands at $764.04 (i.e. Rs 57,526, a drop of around $70 per share. This means a loss of Rs 5,200/share. ).
The situation between Ukraine and Russia is causing chaos in all areas. Photo: Getty Images
WHY DO ELON MUSK’S REVENUES FLUCTUATE SO MUCH?
Since Elon Musk is the owner of Tesla, he naturally owns a lot of stock in the company. Musk holds about 175 million shares of Tesla Stock, even though he makes headlines most of the time because of his decisions to sell his shares. Why?
Elon Musk, unlike the common man who gets a salary, is paid in stock. Elon, like most businessmen, sells these shares to receive cash at his convenience and that’s when he has to pay taxes. Since he is also entitled to ESOPs, he receives more shares every few years and well, that is one of the reasons for the large number of shares that end up staying with him, despite the sale of his shares personal. He also kept about 1.3 million shares each time he exercised one of his stock option tranches.
Given that he owns a huge amount of stock, a drop of $70 per share is going to hurt his overall wealth during times like these.
The recent price change from $834 to $764 caused his wealth to plummet from $211 billion to $198 billion.
Although he remains the richest person in the world according to the Bloomberg Index, around $71.7 billion has been wiped from his fortune so far this year.
You may recall how his wealth peaked at $340.4 billion on Nov. 4, when Tesla shares hit an all-time high. A few days later, he asked his Twitter followers if he should sell some of his stake. It triggered the biggest drop in shares of the company which erased $35 billion of its net worth in one day. He eventually sold shares worth over $16 billion and also donated $5.7 billion worth of shares to charity.