Elon Musk & Sam Bankman Fried are the five biggest market losers in 2022.

Elon Musk.Patrick Pleul/picture Alliance via Getty Images
Elon Musk lost a large portion of his wealth in 2022. Sam Bankman-Fried is facing federal fraud charges. Other market sectors suffered significant setbacks in a turbulent year like housing. Here are the five biggest market losers for 2022.

Elon Musk saw a huge chunk of his wealth disappear in 2022. Sam Bankman-Fried is facing federal fraud charges for the collapse of FTX.

Other market segments suffered significant setbacks in a volatile macro environment, which included red-hot inflation and 425 basis points Fed rate hikes.

Here are the five largest market losers for 2022.

1. Elon Musk

Tesla CEO and self-described “chief twit”, has seen his net worth plummet to more than $130billion in 2022, as shares of his electric vehicle company plunged 70%.

Tesla shares have fallen more than 50% since Musk’s $44 billion purchase of Twitter in October. This compares to a mere 3% drop for the Nasdaq. Wedbush even stated that he is “asleep behind the wheel.”

Tesla stock is also being affected by Musk’s sale of shares to finance the Twitter buy, fears about a recession and the Fed’s aggressive campaign for higher interest rates. Due to weaker demand, Tesla has had to slow down its China factory’s production through January.

2. Sam Bankman-Fried, the collapse of cryptos

Before FTX crashed, crypto was already in trouble. Three Arrows Capital and Celsius filed for bankruptcy this spring, as Fed rate increases slammed risk assets. Key stablecoins also lost their 1-for-1 dollar peg. After peaking at $3 trillion in 2021, the total crypto market cap dropped to $1 trillion.

Then came FTX.

After a liquidity crisis, the crypto exchange filed for bankruptcy. There were also reports that FTX had transferred billions of client funds to Bankman-Fried’s Alameda Research.

Bankman-Fried was earlier this month arrested and is facing federal fraud charges. Nearly all of his wealth, which had topped $16 billion, has been wiped away.

3. Housing

While home prices are yet to experience a complete downturn, there were other indicators that pointed to a significant retreat. As borrowing costs soared, mortgage applications fell to a 25-year high in October. Since then, they have recovered somewhat as the fixed rate for 30-years fell below 7%.

The sentiment index of the National Association of Home Builders has dropped for 12 consecutive months, making it the lowest since 2012. This excludes the COVID pandemic. According to the National Association of Realtors, existing home sales have declined for ten consecutive months. This is the longest slump since 1999. Redfin reported that home sales fell 35% in November, its largest drop in records since 2012.

4. SPACs: Initial Public Offerings

Investors who are interested in growth stocks have historically seen initial public offerings increase. They were among the worst performers for 2022, however, which was the opposite. The number of IPOs fell 83% to 178 from a year ago.

This coincided with the demise of a once hot corner of the IPO marketplace: special purpose acquisition businesses. According to SPAC Analytics, SPAC IPOs have fallen 86% in the last year. According to data provider SPAC Research, SPAC creators have suffered losses of more than $1.1 million in liquidations this year. An ETF that tracks SPAC IPOs lost more than 70% in 2022.

5. Tech stocks

The Federal Reserve was the name given to tech darlings who were key in the explosion in growth stocks following the pandemic of 2021.

Tech-heavy Nasdaq dropped 35% in 2015. Other heavyweights have also suffered from Tesla’s slide. Meta has fallen 66%. Amazon and Apple lost 49% and 26%, respectively. Netflix has dropped more than half off.

Business Insider has the original article.
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By: bevans@insider.com (Brian Evans)
Title: The 5 biggest market losers in 2022: Elon Musk and Sam Bankman-Fried lead turbulent year
Sourced From: markets.businessinsider.com/news/stocks/elon-musk-sam-bankman-fried-biggest-market-losers-this-year-2022-12
Published Date: Thu, 29 Dec 2022 13:00:00 +0000