Elon Musk isn’t a trillionaire anymore, though, as the value of SpaceX and Tesla stock plummeted to fall below the trillion-dollar mark.
The Bloomberg Billionaires Index found on Tuesday that Musk’s net worth fell to $957 billion, from $1.11 trillion two weeks ago. Forbes also pegged his wealth at some $962 billion at the end of Tuesday, and at $970.2 billion at the end of Wednesday.
Even with the fall, Musk is still the richest man in the world by far.
A historic milestone didn’t last long
On June 12, SpaceX went public on the stock market, marking its first time in history having a net worth exceeding $1 trillion.
The company’s initial public offering was priced at $135 a share, before rising to $150 on the first day, which would put SpaceX at over $1.77 trillion. His personal net worth surpassed the trillion-dollar mark on the first day of the listing as he owns about 42% of the aerospace company.
The investment fever continued on the following days, pushing SpaceX’s share price to an intraday peak of $225.64 on June 16. The total amount of Musk’s net worth at that time ranged from $1.3 trillion to $1.45 trillion, depending on the estimate.
SpaceX and Tesla take a hit in tech sell-off.SpaceX and Tesla lose out on tech sell-off.
Technological stocks took a hit during the rally, and it finally slowed down.
The artificial intelligence spending concerns, the increase in infrastructure costs, and the fear of the potential for higher interest rates have led to a widespread sell-off in the technology sector. It was not only the big names of the AI boom that were impacted, but companies with close ties to the industry such as Nvidia, AMD, Intel, Alphabet, and Samsung, were also among the companies.
A major loser was SpaceX, where the stock dropped over 30% since mid-June and is now around $154-156.
Tesla also suffered in the process, as its stock fell by almost 6% during the same time frame.
Why does the fortune of Musk fluctuate so greatly?
Musk’s wealth, however, is largely tied up in only two companies, compared to many of the world’s richest people.
His net worth is almost entirely from SpaceX, which is followed by Tesla’s part. The majority of his wealth is invested in stocks and not cash, which can mean his fortune can fluctuate wildly depending on the prices of his stock.
Another factor that Forbes used is its effect on the calculation. About $116 billion of Tesla shares were restricted stock that would vest in Musk’s hands if he would exercise his stock options under his 2018 compensation package, but would instead be held by the company until he continues to serve as the leader of the company until January 2028. Those restricted shares were not included in his Forbes estimate of his net worth, which accounts for the loss.
Analysts Say Volatility Is Expected
The recent decline is thought to be a typical reaction after one of the biggest initial public offerings in history.
Danni Hewson, head of financial analysis at AJ Bell, pointed out that SpaceX’s investment would probably be a wager on the future of space exploration, but urged caution was needed to invest rather than have it be an emotion.
In the meantime, insiders are expected to start cashing out of their SpaceX stock in late July when restrictions on trading close, which could put further downward pressure on the stock.
Could Musk Become a Trillionaire Again?
While Musk has thus fallen below the trillion-dollar mark, analysts say that the milestone may soon be reached again.
Given how closely his wealth is tied to SpaceX and Tesla, even a modest rebound in either company’s share price could restore his trillionaire status.
For now, however, the world’s richest person is once again a billionaire, albeit one whose fortune still approaches the trillion-dollar mark.
