Why did Musk and Bankman-Fried lose billions?

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Why did Musk and Bankman-Fried lose billions?

Bankman-Fried is now excluded from the Bloomberg Billionaires Index, while Elon Musk's net worth has dropped by more than $86 billion. As a result of their own business decisions, two major tech players have seen their net worth fall by billions of dollars in just a few weeks.

Currently, Sam Bankman-Fried (SBF), the now-former CEO of the crypto exchange FTX, does not even qualify to be listed on Bloomberg Billionaires Index due to his net worth, which reached roughly $24 billion in March and $16 billion on November 7.

In the near future, it seems that SBF may face financial difficulties due to its holdings in crypto and stock trading platform Robinhood, FTX companies, and Alameda Research.

Lost tens of billions of dollars in a few days

As a consequence, Bankman-Fried lost almost 24 billion dollars.

"FTX's assets are fine," he wrote on his Twitter profile on November 7, dismissing reports about the company's liquidity as "false rumours." He has since deleted the tweet. As soon as FTX announced it was working on a potential agreement with Binance to address a "liquidity crisis," SBF resigned and announced FTX's bankruptcy.

“FTX now joins the infamous club of centralized crypto entities that went bust this cycle because they took enormous liberties not only with its customers’ funds but also with ethics, integrity and the very ideals of crypto,” Anto Paroian, CEO and executive director of crypto hedge fund ARK36, told Cointelegraph.

“Hopefully, both the industry as a whole and individual crypto users will be able to learn and grow from this experience”. Meanwhile, Elon Musk, the billionaire CEO of Tesla and the richest person in the world, has been rumored to be unwilling to acquire Twitter for months.

The deal was finally reached in October, and Musk could owe roughly $1 billion in interest costs a year after buying the company for $44 billion. Before the Twitter acquisition, Musk's net worth was more than $300 billion.

Tesla's stock price peaked at $407.36 in November 2021, around the same time Musk's net worth reached $300 billion. Tesla CEO's net worth fell from $184 billion to $184 billion within about a year, according to Bloomberg's Billionaires Index.

“Elon Musk’s failed tenure at Twitter is a good example of how to repel authoritarian attempts,” said Max Berger, co-founder of activist group IfNotNow. “He lost critical support he needed from pillars of support (advertisers, workers, users). He tried to centralize control, but couldn’t”.