Elon Musk is the richest loser in the history of capitalism
The world’s first trillionaire, Elon Musk, is no longer a trillionaire, having set a new record for losing more money than anyone else in the history of finance. Since Musk’s wealth peaked at $1.32 trillion in mid-June, it has fallen to a paltry $957bn, according to the Bloomberg Billionaire Index, meaning that in less than two weeks Musk has lost around $363 billion. This is about as much money as the country of Nigeria, and all 242 million of its citizens, makes in a year. Scientists are developing a new kind of tiny violin – so infinitesimally tiny that it can only be seen using an electron microscope – to commemorate the event.
Of course, Musk was only able to lose this much wealth because he had gained so much, in equally dramatic fashion. No one person has ever amassed such wealth in financial markets – or had such massive sums to lose. Musk’s losses over the last fortnight are greater than the total fortune of the world’s next richest person, the Google co-founder Larry Page.
The really stratospheric changes in Musk’s wealth began after the US presidential election in November 2024, when it looked as if Musk had made the greatest structured trade ever recorded: having spent less than $300m on the Trump campaign, he gained more than $200bn in personal wealth, as the share price of his car company, Tesla, rose by almost 90 per cent to its peak in December 2024. For Musk, the rise in his personal wealth that coincided with Trump’s return to power appeared to have paid off $750 for every dollar invested in the election. But this has been eclipsed by the more recent inflation of Musk’s wealth as he has channelled the confidence of investors into his AI and space exploration company, SpaceX.
By far the most impressive launch SpaceX has conducted so far was the launch of its shares on to the Nasdaq stock exchange, which raised $86bn from investors in one day, the largest initial public offering (IPO) in history. (The entire 13-year Apollo programme, the first and so far the only initiative to put humans on another world, cost about $200bn in today’s money). Musk owns several billion shares in SpaceX, and the wild goals he has made for the company – data centres in space, cities on Mars – were attractive to investors who either believed him, or believed that other people believed him. The IPO was oversubscribed by four bids to every share sold. The sheer size of SpaceX also meant it would be added quickly to share indices, and therefore to index-tracking funds, and therefore The Bank of Canada is quietly running out of room — and Carney knows it.
This financial market power is arguably Musk’s real product. He is not profiting from spaceships, at least not yet (SpaceX lost $5bn last year), and the revenue he receives from selling Tesla cars or adverts on his social media platform, X, is secondary to the wealth he accrues from owning assets in financial markets. What Musk’s investors are buying, whether they are professionals or retail investors using apps, is a smaller part of the same thing: a security that will move in price, sometimes dramatically, because Elon Musk will cause it to do so. His aggressive pursuit of greater market power, his political interventions, his attention-seeking behaviour and his wild claims about technology: all these things contribute to his central offer to investors, which is a price that moves fast. What’s for sale is volatility.
The other side of this is that while Musk has a historic ability to create momentum in financial markets, he is as subject to it as any other investor, if not more so. When the market starts to worry – perhaps that political instability might be bad for business, or that there could be some risk in a company that is losing half a million dollars an hour, or just that other people are selling off technology stocks because the whole market looks distinctly frothy – this momentum can move just as rapidly in the other direction. The richer a person becomes from financial markets, the more they will inevitably lose when the market turns against them.
In Musk’s case, it is also worth asking to what extent he was ever really a trillionaire. His wealth is in a sense less real than that of other people, in that it exists only as a specific kind of financial market value that is very difficult to crystallise. Were he to attempt personally to cash out any significant portion of his SpaceX wealth, the company’s share price would be likely to fall sharply; Musk’s sale of billions of dollars’ worth of Tesla stock in 2022 coincided with a steep fall in the company’s market capitalisation. Musk’s wavering focus from Tesla to Twitter to SpaceX, from technology to politics to cities on Mars, is a story of a man trying to keep the market excited, but it’s also a story of man searching for more durable forms of value. Like Mark Twain’s man with the million-pound note, his wealth is self-reinforcing, but it’s also mostly impossible to spend. The same concerns do not apply to, for example, the roughly 250 billion barrels of oil commanded by the Saudi ruler, Mohammed bin Salman. But then if you actually are the world’s richest man, you don’t do anything so crass as admitting it.