Elon Musk loses $50-billion in two days in record wealth plunge after twitter poll

Elon Musk has lost $50 billion so far this week after Tesla Inc. shares plunged for the second day in a row. It’s the biggest two-day decline in the history of the Bloomberg Billionaires Index, and the biggest one-day fall after Jeff Bezos’s $36 billion plunge following his divorce from MacKenzie Scott in 2019. 

Tesla shares have fallen by 4.9% after Twitter users voted in favour of boss Elon Musk selling 10% of his stake in the carmaker in order to pay tax. He polled his Twitter followers on whether he should sell the shares, and 58% of the 3.5 million accounts that voted said he should.

It could see him dispose of nearly $21bn (£16bn) of stock. Elon Musk held the poll over the weekend in response to a “billionaires tax” proposed by US Democrats. Mr Musk – who is one of the world’s richest people – pledged that he would abide by the results of the poll, “whichever way it goes”.

The Democrats had proposed plans to target billionaires by taxing their assets, such as shares. Billionaires are often compensated in shares, which means their wealth rises or falls depending on the stock price. But they only pay tax on the gains once the shares are sold.

Tesla’s rout comes amid a tumultuous few days for the automaker. It started when Musk asked his Twitter followers over the weekend whether he should sell 10% of his stake in the company, followed by news that his brother Kimbal sold shares just before the poll. Capping it off was an Insider report Tuesday morning on Michael Burry, the investor made famous by the movie “The Big Short,” saying Musk may want to sell shares to cover his personal debts.

The drop narrows Musk’s lead over Bezos as the world’s richest person to $83 billion. Musk surpassed the Amazon.com Inc. founder for the title for the first time in January and the gulf between the two recently rifted as wide as $143 billion, a figure greater than the net worth of Bill Gates, the world’s fourth-richest person. 

Cathie Wood’s ARK Investment Management, whose funds have been selling shares in Tesla over the past few months, lost more than $750 million in Tuesday’s selloff, while Oracle Corp. founder Larry Ellison, the company’s second-largest individual shareholder, lost $2.1 billion.

Despite the slump, Musk’s fortune is still up 70% this year thanks to Tesla’s gains on the back of strong earnings growth and delivery numbers and a higher valuation for SpaceX. Tesla’s market capitalization has stayed above $1 trillion, a benchmark it hit last month after its third-quarter results significantly beat market expectations and rental-car company Hertz Global Holdings Inc. placed an order for 100,000 Tesla cars.