Elon Musk Is No Longer the World’s Richest Person, Falls Behind Bernard Arnault

Elon Musk is no longer the world’s richest person.

Mr. Musk, the Tesla Inc. chief executive and new owner of Twitter Inc., gave up the unofficial title Tuesday to European mogul Bernard Arnault for Earth’s wealthiest individual, according to Bloomberg, which publishes a ranking of the richest people in the world. A prolonged slump in Tesla’s stock has wiped out more than $100 billion of Mr. Musk’s net worth this year.

The net worth of Mr. Musk, who claimed bragging rights as the wealthiest person in January 2021, is valued at $163.1 billion as of Tuesday morning, according to Bloomberg. He now trails Mr. Arnault, the chairman and chief executive of luxury conglomerate LVMH Moët Hennessy Louis Vuitton, whose personal wealth is estimated at $170.6 billion.

Tesla didn’t respond to a request for comment. An LVMH spokesman declined to comment.

When Mr. Musk first reached the pinnacle of the Bloomberg Billionaires Index almost two years ago, he overtook Amazon.com Inc. founder Jeff Bezos, driven by a meteoric rise in the value of Tesla. The car maker’s shares have fallen sharply this year, though, amid concerns about demand. Mr. Bezos has also fallen in the wealth ranks and is now the fifth-richest person, largely reflecting a drop in Amazon’s stock amid recession fears. Mr. Bezos has said he plans to give away most of his fortune to charity.

For many executives and founders, their net worth is at least partially tied up in shares of their businesses. That means volatility in stocks and other holdings can sway their measures of wealth. Establishing their exact net worth can also be tricky, in part because many of their holdings are private.

Mr. Musk is compensated in stock awards as Tesla’s CEO and doesn’t accept a cash salary from the electric-car company. He has accumulated most of his wealth in recent years as Tesla has turned profitable.

Photos: Elon Musk Buys Twitter. Here’s How He Made His Fortune

In January 2020, Mr. Musk’s net worth was valued at about $28 billion, according to Bloomberg. As Tesla’s stock soared, so did Mr. Musk’s wealth, which peaked at $336 billion in November 2021. He has lost more on paper this year than any other billionaire, according to Bloomberg.

Mr. Musk, a serial entrepreneur, runs rocket company SpaceX, formally known as Space Exploration Technologies Corp. He also founded Boring Co., an underground tunnel business, and neuroscience startup Neuralink Corp. In October, Mr. Musk acquired Twitter for $44 billion. He has sold some Tesla stock this year at least in part to fund the Twitter deal, including selling $4 billion worth of shares last month.

It has been a rocky period for Twitter since Mr. Musk took ownership. He fired about half the staff, and the social-media company has seen waves of people leaving. It suffered “a massive drop in revenue” and was losing $4 million a day, he said soon after buying the business. Mr. Musk has said he aimed to make Twitter less dependent on advertising revenue that accounted for about 90% of sales, though efforts to introduce a paid subscription service have suffered repeated delays. He later said bankruptcy is a possibility for Twitter.

Mr. Arnault’s wealth, meanwhile, is largely tied up in the luxury empire LVMH.

A businessman from Northern France, Mr. Arnault bought the storied French fashion house Dior out of bankruptcy in the 1980s and then used it to amass a stake in LVMH. This shareholding structure remains in place today: the Arnaults own more than 97% of Dior, which in turn owns 41% of LVMH. The family also owns close to 7% of LVMH directly, with total voting rights of well above 50%.

Like some of his peers, Mr. Arnault went on a spending spree over the past three decades, allowing him to build economies of scale in advertising, shop leases and department-store space between his dozens of brands.

Ultimately, Mr. Arnault came out on top in a bruising race to become the biggest in the industry, earning the nickname “the wolf in cashmere” for the way he pursued acquisitions. LVMH’s wines-and-spirits division houses Dom Pérignon champagne and Hennessy cognac. Its fashion and leather goods unit includes brands like Loewe, Celine and Fendi, while the conglomerate also owns American jeweller Tiffany & Co. and watchmaker TAG Heuer.

Having gone on a tear since 2015, the luxury industry also has held up better than most this year. LVMH reported strong revenue in the most recent quarter as wealthy consumers continued to spend freely on luxury goods despite the uncertain economic backdrop.

Indian industrialist Gautam Adani is currently the third-richest person in the world, according to Bloomberg. Mr. Adani is the chairman of his namesake Adani Group, an India-based conglomerate involved in initiatives including green energy, power and gas distribution. His push into green energy comes as Indian Prime Minister Narendra Modi has stressed development for infrastructure and renewable energy. Shares of Mr. Adani’s publicly traded businesses have risen this year.

Mr. Adani is the first person from Asia who has ranked this high on Bloomberg’s wealth index, long dominated by U.S. tech entrepreneurs. Earlier this year he became a centibillionaire, with his net worth exceeding that of Warren Buffett.