In a matter of weeks, two major players in the tech industry have seen their net worth drop by billions of dollars, in part as a result of their own business decisions.
Sam Bankman-Fried, the now former CEO of cryptocurrency exchange FTX, allegedly I had a net worth of roughly $24 billion in March and $16 billion on November 7, but he can’t even figure in the Bloomberg Billionaires Index. Some reports suggest that with its holdings in cryptocurrency and stock trading platform Robinhood, firms FTX, and Alameda Research, SBF could face severe financial difficulties in the coming days.
Many of the effects of the liquidity problems on FTX spread throughout the cryptocurrency space within a week. Bankman–Fried said on November 7 that “assets are fine” at FTX in a now-deleted tweet, dismissing many of the reports about the firm’s liquidity as “false rumors.” He subsequently announced that FTX was working on a possible deal with Binance to deal with the “liquidity crisis”, but the deal fell apart in 48 hours. SBF resigned and announced that FTX was filing for bankruptcy in the United States less than two days later.
“FTX now joins the infamous club of centralized cryptocurrency entities that broke this cycle because they took enormous liberties not only with their clients’ funds, but also with the ethics, integrity and ideals of cryptocurrency itself,” he said. Anto Paroian, CEO and managing director of cryptocurrency hedge fund ARK36, told Cointelegraph. “Hopefully both the industry as a whole and individual crypto users can learn and grow from this experience.”
By contrast, Tesla CEO and still the world’s richest person, Elon Musk, had been teasing an acquisition of social media platform Twitter for months, leading many to speculate that the billionaire had no intention of go ahead. When a deal was struck in October, Musk bought the company for $44 billion, with estimates suggesting he may owe about $1 billion in annual interest expense.
Musk had a net worth of over $300 billion as of October 2021 before the Twitter acquisition and around the same time Tesla’s stock price hit an all-time high of $407.36 in November 2021 In about a year, the Bloomberg Billionaires Index He showed that the Tesla CEO had lost more than $86 billion, dropping his reported net worth to $184 billion at press time.
Twitter’s new leader has already launched a series of controversial policies that have many in the business world questioning Musk’s insight. He fired many top executives in his first week at the company – including many members of Twitter’s content moderation team – and the platform experienced a surge in tweets containing hate speech, leading to report that advertisers’ revenues could be in jeopardy.
Please note that Twitter will do lots of dumb things in coming months.
We will keep what works & change what doesn’t.
— Elon Musk (@elonmusk) November 9, 2022
Keep in mind that Twitter will be doing a lot of dumb things in the coming months.
We will keep what works and change what doesn’t.
One business decision that has the potential to put Twitter at financial risk was moving the platform to a subscription model, charging users for “verified” blue ticks instead of distributing them only after an application process. The system caused several accounts falsely representing legitimate companies and individuals to get the blue checkmark, including Nintendo of America, video game publisher Valve, and US President Joe Biden.
It’s like this now, I’m sure advertisers will stick around pic.twitter.com/OE8PZxA5zx
— David Milner (@DaveMilbo) November 9, 2022
Now it’s like this, I’m sure advertisers will stay
“Elon Musk’s failure on Twitter is a good example of how to repel authoritarian attempts,” said Max Berger, co-founder of the activist group IfNotNow. “He lost the critical support he needed from the support pillars (advertisers, workers, users). He tried to centralize control, but he couldn’t.”
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Billionaires lose billions: What about Elon Musk and Sam Bankman-Fried?