A revolution is underway in the most prestigious and exclusive club in the world.
A new king is likely to be crowned in the coming days.
The billionaires club is about to experience a big change. Elon Musk, the current king, could pass the crown very soon to the French businessman Bernard Arnault. The first is the boss of the electric vehicle manufacturer Tesla (TSLA) and the social network Twitter, while the second is the CEO of the French luxury group LVMH (Louis Vuitton, Dior etc) (LVMUY) .
At the time of writing, about some $5 billion only separates the two men. If this amount is enormous for 99% of the inhabitants of the planet, it is derisory for the members of the club of billionaires. It is possible that Arnault will be crowned new king by the end of the week.
Musk's Fortune Has Shrunk By Nearly $100 Billion This Year
Musk, who has become the world's most influential CEO, has an estimated fortune of $171 billion as of December 7, according to the Bloomberg Billionaires Index. Arnault's net wealth is valued at $166 billion.
At the start of the year, Musk's wealth, which is based primarily on his Tesla shares, was estimated at $270.4 billion, compared to Arnault's $177.8 billion. Roughly nearly $100 billion separated the two men. But since then, Musk's fortune has shrunk by $99.4 billion compared to a drop of just $11.8 billion for Arnault.
For a brief moment on December 7, Arnault even topped Forbes' list of "Real-Time Billionaires." In this ranking, the gap separating Musk from Arnault is even smaller: the first has a fortune estimated at $185.4 billion against $184.7 billion for the second. Basically, the gap is only $700 million between the two.
Arnault benefits since the luxury sector is relatively impervious to the economic slowdown and recession concerns. LVMH reported stronger-than-expected third-quarter sales last month, as wealthy customers flocked to its fashion brands and Americans took advantage of the strong dollar to visit its stores in Europe.
Demand for luxury goods remains resilient in the face of sharp inflation. Affluent consumers have been less affected by the higher cost of living, while the average consumer has cut back on discretionary spending.
Third-quarter revenue for the owner of Louis Vuitton and Dior amounted to 19.76 billion euros ($20.29 billion), reflecting organic growth (excluding acquisitions) of 19% from a year earlier.
Sales in Europe, the U.S. and Japan have risen sharply this year due to solid demand from local customers and the resumption of international travel.
Musk, on the other hand, is hurt by the continued decline in Tesla shares, which constitute a large part of his fortune.
Since the billionaire made his $44 billion bid to acquire Twitter, the electric vehicle maker's shares have steadily fallen in value. That's because investors worry that the social network will distract him, when Tesla faces fierce competition from Chinese and legacy automakers.
Bill Gates Ahead of Jeff Bezos
The resurgence of covid-19 in China, and fears surrounding the tech sector in an inflationary environment also pose challenges for Tesla.
Tesla’s stock has fallen nearly 48% to $174.04 since Musk launched his takeover bid on April 25, translating into a $506 billion drop in market capitalization. Since the billionaire finalized the Twitter deal on October 27, the Tesla stock has lost 22.7%, a loss in market value of $161 billion in less than two months.
Overall, the Tesla stock is down 50.6% this year. Musk's early decisions caused chaos at Twitter, making it even more difficult for him to turn the platform profitable as soon as possible, since he took on $13 billion in personal debt to finance the transaction.
The Indian executive Gautam Adani is the world's third-richest person, with a net worth of $127 billion, up $50.1 billion since January, according to the Bloomberg Billionaires Index.
Microsoft (MSFT) co-founder Bill Gates is the fourth-richest person in the world with a fortune estimated at $113 billion. His wealth has shrunk by $24.6 billion in 2022.
Amazon (AMZN) founder and Executive Chairman Jeff Bezos is fifth with $112 billion, down $80.7 billion since the start of the year.
The top 10 include three other tech tycoons: Larry Ellison, co-founder of Oracle (ORCL), has a fortune of $91.9 billion, down by $15.3 billion. He's ranked seventh. Larry Page, co-founder of Alphabet (GOOGL), is ninth with $88.2 billion, down by $40.2 billion. And Steve Ballmer, former CEO of Microsoft, is 10th with a fortune of $88.2 billion, down by $19.1 billion.
The legendary investor Warren Buffett is the sixth richest person in the world. He is worth $106 billion, down by $2.85 billion. And the Indian billionaire Mukesh Ambani is eighth. His fortune is estimated at $90.9 billion, up by $962 million since January.
