In a surprising turn of events, Elon Musk’s fortune experienced a substantial decline, losing a staggering $20.3 billion in a single day.
This significant loss was triggered by Tesla Inc.’s warning that it may need to continue reducing the prices of its electric vehicles, causing the company’s shares to plummet. As a result, Musk’s net worth now stands at $234.4 billion, making it the seventh-largest decline ever recorded in the Bloomberg Billionaires Index.
The decline in Musk’s net worth is not an isolated incident, as other prominent US technology billionaires also faced a challenging day. Jeff Bezos of Amazon.com Inc., Larry Ellison of Oracle Corp., Steve Ballmer, the former CEO of Microsoft Corp., Mark Zuckerberg of Meta Platforms Inc., and Larry Page and Sergey Brin, the co-founders of Alphabet Inc., together experienced a collective loss of $20.8 billion in net worth. This financial downturn coincided with a 2.3 per cent drop in the tech-heavy Nasdaq 100 index, adding further strain to the fortunes of these tech giants.
Tesla’s shares, based in Austin, Texas, suffered a significant decline of 9.7 percent, falling to $262.90 in New York. This marked the most substantial drop since April 20, triggered by the company’s warning of potential further hits to its already-shrinking profitability. Over the past few months, continuous price markdowns have taken a toll on Tesla’s automotive gross margin, reaching a four-year low in the second quarter. In response to rising interest rates, Musk, the CEO of Tesla, declared that the company might be forced to continue lowering its vehicle prices.
Elon Musk’s immense wealth is primarily derived from his stake in Tesla, the electric vehicle manufacturer, along with his holdings in Space Exploration Technologies and Twitter. Remarkably, his wealth had increased by approximately $118 billion throughout the year until Wednesday, mainly due to Tesla’s meteoric rise, with its shares climbing 136 percent.
Meanwhile, Bernard Arnault, aged 74, has experienced a different trajectory in terms of wealth accumulation. His net worth rose by an impressive $39 billion during the year, bringing his total wealth to $201.2 billion. The shares of LVMH, headquartered in Paris, have surged by 26 percent in 2023, contributing significantly to Arnault’s financial growth.
The sharp decline in Elon Musk’s fortune serves as a reminder of the inherent volatility in the tech industry and the potential risks associated with high-growth stocks. While Musk’s net worth still surpasses Bernard Arnault’s, the setback has brought the two billionaires closer in their overall wealth.
As the markets continue to evolve and uncertainties persist, only time will reveal the lasting impact of this financial shake-up on the global wealth rankings.