As of 16 December 2022, who is the richest man in the world?
Spoiler: it isn’t Elon Musk.
Bernard Arnault is now the richest man in the world. Here’s everything you need to know about his rise to No. 1.
The Fall of Elon Musk: How it Went Down
The Twitter and Tesla CEO has lost his title as the richest man in the world and now holds second place.
For a while, there was still hope for Musk to continue holding onto his title.
That was until Monday struck.
On 12 December, Tesla shares dipped by a whopping 6.3%, dealing the final blow to Musk. Meanwhile, LVMH’s shares had only dropped by 1.5%, propelling Arnault to No.1 on the Bloomberg Billionaires Index.
For those who avidly keep track of news in finance and business, this doesn’t come as a shock.
Tesla’s shares have been steadily dropping since mid-September.
It didn’t help that Musk’s Twitter deal added fuel to the fire.
In case you don’t know, Musk offered $44 billion to buy Twitter in April but pulled out of the deal in July, citing the immense number of fake accounts as a deterrent.
Or perhaps it was the fact that Twitter is full of angry gremlins?
Needless to say, Twitter executives were not pleased and took legal action. After months of lengthy legal struggles, Musk finally upheld his $44 billion deal in October, though begrudgingly.
In order to secure the $44 billion, Musk had to sell off some of his stocks in Tesla, which pushed the shares down. Furthermore, investors have begun to lose faith in Tesla due to the amount of attention Musk has been paying to Twitter.
It certainly has not been a good year for Musk.
Bernard Arnault… Who?
If you’ve never heard of him before, don’t fret. You wouldn’t have seen him around due to his preference for keeping his personal life private.
Unlike Musk, Arnault doesn’t tweet. He isn’t even active on social media.
Bernard Arnault is the chairman of French luxury goods giant Moet Hennessy Louis Vuitton (LVMH), home to other big luxury brands such as Christian Dior, Marc Jacobs, Fenti and many more.
You’ve probably come across stores under LVMH as you walk past ION Orchard.
According to Forbes, he is now worth $191.4 billion, which is $7.7 billion more than Musk.
While he has never been the world’s richest man, he has always been on the list. In 2019, he even managed to inch past Amazon CEO Jeff Bezos (the richest man in the world before Musk outdid him) and hovered in the top spot for a while before falling back to second place.
This marks the first time a European has been the richest man in the world.
His rise to power began when he bought Christian Dior in 1984, which was then bankrupt. Not only did he return the group to profitability, he also bought a controlling stake in LVMH in 1989 and has been the chairman and CEO of the company from then onwards.
Over the past 30 years, Arnault has turned LVMH into a luxury powerhouse that produces items such as champagne, jewellery and cosmetics. He pounced on the idea of China as a key market and worked on expanding LVMH’s business there. He opened the first Louis Vuitton store in Beijing in 1992.
How did Arnault Do it?
Ultimately, the match point came down to the performance of stocks in Tesla and LVMH.
While Tesla’s share price plunged by 54%, LVMH’s stocks continued to hold steady.
In addition, the lockdown caused by COVID-19 increased the demand for LVMH’s luxury items in China, resulting in LVMH’s revenue increasing by 32% to $17 billion in 2021. LVMH also acquired luxury giant Tiffany & Co. in 2021, which is an impressive feat.
Though Arnault’s net worth did dip by $7 billion this year, Musk’s net worth plummeted by 15 times more and decreased by $107 billion.
All these factors gave Arnault the boost needed to rise to the top and become the richest man in the world.
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