Elon Musk’s personal wealth suffered a nearly $13 billion blow on Thursday following a SpaceX rocket explosion and disappointing Tesla earnings.
Bloomberg’s Billionaires Index, which tracks the real-time net worth of the world’s wealthiest individuals, showed Musk’s wealth declining by $12.6 billion on Thursday.
A significant portion of Musk’s fortune is tied to Tesla shares, which plummeted almost 10% on Thursday due to a lackluster quarterly earnings report. The falling share price wiped $58 billion from the company’s market cap. Tesla reported a net income of $2.51 billion for Q1 2024, marking a 24% year-on-year decline.
Investor concerns were heightened as Musk, Tesla’s CEO, suggested the company would continue cutting vehicle prices to boost demand, despite the pressure on profit margins. Tesla subsequently increased U.S. prices on Friday after implementing six price reductions this year.
On the same day, headlines featured Musk’s name as SpaceX’s massive Starship rocket exploded minutes into its inaugural flight. Musk stated he had “learned a lot” from the event and anticipated another test launch within months.
Congrats @SpaceX team on an exciting test launch of Starship!
Learned a lot for next test launch in a few months. pic.twitter.com/gswdFut1dK
โ Elon Musk (@elonmusk) April 20, 2024
Over the past decade, Musk’s wealth has soared due to the rapid rise in Tesla’s share prices, which have increased more than 4,000% since their IPO. Musk also owns over 40% of SpaceX shares, according to CNBC, with the company receiving a private valuation of $137 billion earlier this year.
Despite remaining among the world’s richest people, Musk’s wealth has significantly decreased due to his Twitter acquisition and various issues at Tesla, including slowing sales. In late 2021, Forbes named him the richest person in history with a fortune approaching $300 billion.
However, Bloomberg currently estimates Musk’s net worth at $164 billion. One year ago, his fortune was valued at $260 billion.
Musk remains the second-wealthiest person globally, but the gap between him and the top-ranked Bernard Arnault, founder of luxury goods conglomerate LVMH, has been widening in recent months.
Tesla’s stock has lost about 52% of its value in the past 12 months, although it has recovered significantly since the beginning of the year, with shares gaining 50% since January.
Musk’s declining wealth may not have reached its lowest point, as some market observers predict his net worth could suffer further. Thursday’s earnings led several analysts to lower their price targets for Tesla, with one forecasting that shares, currently priced around $163, could plummet to just $28. Another analyst labeled Tesla as “one of the most overvalued” companies in the market and predicted an additional 80% drop in stock value.
Musk’s position atop Bloomberg’s global wealth ranking is due in part to the 4,000% increase in Tesla shares since the company’s IPO and the success of his other ventures, such as SpaceX. Just a decade ago, Forbes estimated his net worth to be $2.7 billion.
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