Musk's 2023: Earned 770 billion, Tesla and SpaceX are very prosperous, but Twitter's valuation has been halved
Source of this article: Times Weekly Author: Ma Huan
Musk's 2023 can be described as a spring breeze.
This year, his personal wealth increased by 108.4 billion US dollars (about 770 billion yuan), and his net worth reached 254.9 billion US dollars (about 1.82 trillion yuan), and the growth rate is far ahead of the world's richest people, firmly ranking as the richest man in the world.
His two major achievements, Tesla and SpaceX, are still growing at a high rate: Tesla's stock price has risen by more than 100% in 2023, with a market value of more than $802.8 billion, while the rocket company SpaceX has successfully carried out more than 90 launches in the year, and its valuation has soared to more than $175 billion.
Musk has solidified his business empire and managed to take center stage in the media. But on the other hand, the valuation of Twitter (now renamed "X"), which he acquired, has halved, and many of his controversial remarks have also affected and questioned the reputation of himself and the company.
Musk and children (Source: Musk's own social media)
But no matter what, a multifaceted and complex Musk is still the most dazzling business giant of this era.
Tesla and SpaceX go hand in hand
At the beginning of 2023, Tesla started a price war, announcing price cuts in more than 10 countries around the world in just two weeks, with a maximum reduction of more than 20%. In the next three quarters, Tesla continued this strategy of price reduction and quantity assurance in various countries.
This strategy has had some effect. The London Stock Exchange Group (LSEG) predicts that Tesla will deliver 1.82 million electric vehicles worldwide in 2023, an increase of 37% from 2022 and is expected to hit a record high, based on the views of 14 analysts.
But the low-price strategy in exchange for a decline in profitability. Tesla's financial report for the third quarter of 2023 shows that the gross profit margin has fallen below 18%, and the net profit has fallen by 44%.
Tesla's electric pickup truck Cybertruck (Source: Musk's own social media)
During the third-quarter earnings call, Musk complained that the high interest rate environment in the United States has affected consumers to sell cars. "I'm concerned about the high interest rate environment we live in. In the case that most people buy a car with a monthly loan, as the interest rate rises, the monthly payment will naturally increase. If interest rates remain high or continue to rise, it will make it more difficult for people to buy cars. ”
Musk also highlighted the difficulty of reducing the cost of cars. "It's like a penny Game of Thrones," he said. If you have a $40,000 car with about 10,000 items in it, each item will cost an average of $4. In order to reduce costs, say 10 percent, you have to cut out 40 cents from each part, and it feels like digging a tunnel with a spoon. ”
Despite declining profitability and slowing consumer demand, Tesla's stock price is still up more than 100% during the year, and it is still one of the top gainers in the S&P 500 in 2023.
Investors believe that Tesla is the global leader in the field of electric vehicles, and is expected to lead in the field of artificial intelligence in the future.
But Musk admitted: "Tesla is a very powerful ship, but in a storm, no matter how strong a ship is, there is trouble." Morgan Stanley analysts also believe that in the face of the impact of a number of emerging car companies, Tesla will usher in a "turbulent 2024".
Compared with Tesla, SpaceX, which has burned money for many years and suffered heavy losses, has finally made a profit this year.
According to Bloomberg, SpaceX expects to bring in $9 billion in revenue in 2023, which will increase to about $15 billion in 2024.
Currently, the company already dominates the space transportation market, securing several government contracts in 2023, strengthening its influence on the international political scene.
In the first half of the year alone, SpaceX carried out more than 64% of the world's commercial rocket launches, putting satellites, scientific instruments and other payloads into orbit.
SpaceX rocket (Source: Social Media)
The Wall Street Journal revealed that SpaceX's Starlink program is expected to provide Internet coverage to 60 countries, focusing on areas that are difficult to reach by communication services.
Of course, because Musk himself previously rejected Ukraine's request to open Starlink services in the Crimea region, he also attracted an investigation by the US Senate Armed Services Committee.
But these episodes did not affect SpaceX's value-added in the slightest. The company, which is not yet publicly traded, is now valued at $175 billion and is likely to be even higher in the future, more than any initial public offering (IPO) in U.S. history.
Twitter is fully Muskified
A few are happy and a few are sad, and X (formerly known as Twitter), which was acquired by Musk in 2022, is not so beautiful.
Since the acquisition, Musk has made various changes to the social media platform.
First, there were large-scale layoffs, including the dismissal of several senior executives and the reduction of jobs. Musk explained: "When companies are losing more than $4 million a day, layoffs are the only option. ”
Musk changed Twitter's name and logo, changed the platform's features, including badges that authenticate users, and rules on what can and cannot be said on the platform.
Twitter changed its name to X (Source: Musk's own social media)
Incomprehensible netizens erected a "tombstone" for Twitter in the comment area of Musk's tweet, saying that "Twitter is dead".
Musk's various reforms have also been resisted by many advertisers. The Wall Street Journal bluntly said that the X platform is still weak in the U.S. advertising market. Executives at several major ad agencies say they have yet to see a massive return of advertisers to X, with some returning to the platform cutting back on ad spend.
Musk also said in September that the X platform's advertising revenue in the United States has shrunk by 60% since the acquisition deal. He admits that operating the platform has been a "painful" and "rollercoaster" journey.
In October 2022, Musk bought Twitter for $44 billion, and at that time posted that "this little bird (Twitter's logo at the time) was free." ”
A year later, according to the New York Times, the renamed Company X gave out stock grants to employees, showing that the company was valued at just $19 billion, down about 55% from the price Musk bought a year ago.
Of course, even in the face of a boycott from advertisers and massive cost-cutting, X survived and did not collapse in just a few months, as some netizens predicted.
X's future challenges abound, but they don't seem to dampen Musk's ambitions. In his pinned post on the X platform, he wrote, "X is the collective consciousness of humanity."
2024: Take humans to Mars
For the upcoming 2024, Musk is still the "Iron Man" who speaks freely.
The most incredible plan is that he wants to send humans to Mars in 2024.
Musk has long had plans to lead humans to colonize Mars. "If something terrible happens on Earth, whether it's natural or man-made, we want to insure all of humanity and risk it at any cost," he explained. ”
"Starship" is preparing for the third test launch (Source: Musk's own social media)
According to his plan, he will send humans to Mars in 2024 and build self-sufficient Martian cities by 2050.
However, Musk also said that the first settlers of Mars are very likely to die, and it is not a natural death but an accidental death. Going to Mars is difficult and dangerous, not for the faint of heart.
More concerned than the seemingly distant Mars program, the outside world is where the next Tesla factory will be built.
In 2023, Tesla's Mexico factory, which had high hopes, was delayed several times. According to Mexican media, the original production plan for 2025 may have to be postponed to 2027.
In Asia, Thailand's prime minister said Tesla executives had visited the local industrial park. And India, which has not been able to negotiate several times, has also reported that cooperation is about to be reached. According to the latest reports in the Indian media, Musk will visit India in January 2024 and then announce the establishment of Tesla India. At the same time, Tesla is in the final stages of negotiations with India on land to build the factory, which could be in Gujarat, the home state of Indian Prime Minister Narendra Modi.
Regardless of where the next factory is built, Wall Street has predicted that Tesla is expected to join the "trillion-dollar market capitalization club" in 2024.
As for Musk himself, he believes that Tesla's future is not just about cars.
On December 28, Musk reiterated that Tesla is an artificial intelligence + robotics company, not just a car company.
"We are an AI/robotics company. Musk has said: "Almost all of Tesla's long-term value will come from AI and robots, including cars and humanoid robots." ”