© via REUTERS Billionaires Lose Billions: What Happens With Elon Musk and Sam Bankman Fried?
Within weeks, two major players in the tech industry saw their net worth decline by billions – in part as a result of their business decisions.
Reportedly, Sam “SBF” Bankman-Fried; Former CEO of the FTX trading platform; It had nearly $24 billion in March and $16 billion as recently as November 7th; But now it no longer qualifies for inclusion in the Bloomberg Billionaires Index. Some reports indicate that through his stakes in crypto and stock trading platform Robinhood, FTX and Alameda Research; SBF may face serious financial difficulties in the coming days.
Several ripple effects from FTX’s liquidity issues spread throughout the crypto space within a week. Bankman-Fried said on November 7 that FTX “assets are fine” in a now-deleted tweet; He dismissed several reports of the company’s liquidity as “false rumours.” It was later announced that FTX was working on a potential arrangement with Binance to address the “liquidity crunch”; But the deal collapsed within 48 hours. The SBF resigned and announced that FTX was filing for bankruptcy in the US less than two days later.
“FTX now joins the infamous club of centralized crypto entities that have collapsed this cycle as they have taken massive liberties not only with their clients’ money but also with ethics, integrity, and cryptocurrency ideals”; said Anto Baruyan, CEO and CEO of crypto hedge fund ARK36. “We hope that both the industry as a whole and individual crypto users can learn and grow from this experience.”
Elon Musk In contrast, it was Elon Musk, the CEO of Tesla and still the richest person in the world; It has been stalling the acquisition of the social networking platform Twitter for months ; This has led many to speculate that the billionaire has no intention of pursuing. When an agreement was reached in October; Musk bought the company for $44 billion; With estimates that he may owe about $1 billion in interest expense annually.
Musk’s net worth was over $300 billion in October 2021 before acquiring Twitter; Around the same time, Tesla’s stock price reached an all-time high of $407.36 in November 2021. The index showed that the Tesla CEO lost more than $86 billion; This brings his reported net worth down to $184 billion at press time.
The new Twitter leader has already implemented a series of controversial policies that many in the business world question Musk’s business acumen. He fired several senior executives in his first week at the company; Including several members of Twitter’s content moderation team; The platform witnessed a sudden rise in tweets containing hate speech; This has led to reports that advertiser revenues may be at risk.
One business decision that could put Twitter at financial risk was to move the platform to a subscription model; And charging users for blue check marks instead of distributing them only after the application process. The system led to a number of accounts wrongly representing legitimate companies and individuals by getting a blue check mark; Including Nintendo of America, video game publisher Valve, and US President Joe Biden.
“Elon Musk’s failed tenure at Twitter is a good example of how to fend off authoritarian attempts,” said Max Berger, co-founder of the activist group IfNotNow. “It has lost the critical support it needs from the pillars of support (advertisers, operators and users). He tried to centralize control, but he couldn’t.”
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