Billionaire entrepreneur Elon Musk faces a significant hit to his net worth as Tesla, his electric vehicle company, experiences a $30 billion drop in market capitalization. The decline comes amidst a challenging start to the year 2024 for Musk and Tesla, with shares reaching their lowest levels since May last year.
As of Monday, Elon Musk’s net worth has fallen by $3.9 billion, leaving him with an estimated valuation of $194 billion, according to real-time billionaire estimates from Forbes. The sharp downturn in Tesla’s stock prices, which saw a 5% drop during midday trading, contributed to a staggering reduction in the company’s market cap to $568.7 billion.
This decline in Tesla’s market value pushed the company down to the 10th position among the highest-valued companies in the S&P 500 index, trailing behind Broadcom Inc. and Eli Lilly & Co. Additionally, reports indicate that Germany-based software company SAP SE is discontinuing its purchase of Teslas due to challenges with pricing changes and early deliveries.
Tesla’s recent struggles coincide with increased scrutiny surrounding Elon Musk’s $56 billion pay package, which was recently invalidated by a Delaware court. Reports from The Wall Street Journal also suggest Musk’s exertion of pressure on board members, further adding to the scrutiny.
Despite Musk’s loss of the title of the world’s richest man to fashion billionaire Bernard Arnault in April 2023, he currently holds the position of the world’s richest man on the Bloomberg Billionaires Index, with an estimated wealth of $200 billion. However, Tesla’s stock performance has been dismal, experiencing a decline of 28.7% since the beginning of 2024 and positioning it as the worst performer in the S&P 500 this year.
The repercussions of Tesla’s stock selloff extend beyond the company itself, impacting other electric vehicle manufacturers and contributing to a broader downturn in the sector. This interconnected decline highlights the challenges faced by the EV industry in light of Tesla’s influential position and market dynamics.