World Richest Man Elon Musk took a $10 billion hit to his net worth after finalising his $44 billion Twitter deal, according to calculations by the Bloomberg Billionaires Index. Bloomberg reported that Musk spent at least $25 billion to follow through on his agreement from April to buy Twitter for $54.20 a share, assuming he kept the external investors for who he had committed $7.1 billion to the deal.
The report said that six months after Musk announced he would buy the microblogging site, shares of the company crashed as economic uncertainty and interest rate increases curb market speculation and advertiser spending. This made Musk’s offer very expensive, report added.
Although hours before the acquisition Elon Musk said that he bought the social media platform to help humanity, not to make more money.
Bloomberg cited the Solactive Social Media Index, which tracks the performance of publicly traded social-media companies, saying that the shares of other social media companies have also fallen by almost 40 per cent. The Bloomberg wealth index factors in a similar drop in the value of Twitter, and, thus, Musk’s stake, the report said.
Musk isn’t the only Twitter investor taking a hit, the report added. Twitter’s co-founder Jack Dorsey and Prince Alwaleed Bin Talal al Saud’s wealth estimates also dropped $380 million and $640 million, respectively. Both of them supported the takeover and are thought to have remained investors in the company, Bloomberg said.
In July Musk said that he was terminating the offer because he’d been misled about the prevalence of bots on the network. Musk ultimately had to follow through with the original offer price as Twitter sued to force him to complete the deal. The $10 billion hit to Musk’s fortune brings his total losses this year to $66 billion, according to the Bloomberg wealth index.
The report said that the shares of his other venture Tesla Inc. is also down 35 per cent this year, partially on fears he’d sell shares in the electric-vehicle maker to fund his Twitter purchase. Musk used all his available liquid assets to complete the Twitter purchase, and his estimated liabilities increased by $4.6 billion, according to Bloomberg.