Elon Musk’s wealth – and Tesla’s stock – took a huge hit on Friday, continuing a downward spiral and possibly jeopardizing the billionaire’s acquisition of Twitter.
According to the Bloomberg Billionaires Index, Musk has lost $69.1 billion since the start of 2022. His net worth is now $201 billion.
In the course of Friday’s trading, shares of Tesla, from which much of Musk’s wealth derives, fell more than 10 percent to $636 per share at one point.
What you should know
- Tesla shares are being affected by the same forces that are roiling global stock markets – war in Ukraine, rising interest rates, recession threats, supply chain chaos, and surging inflation.
- Tesla shares have fallen far more than those of other Silicon Valley giants like Apple or Alphabet, the owner of Google.
- The premise that enabled Tesla to reach its astronomical stock price and make its founder Elon Musk the richest man on earth is being re-examined by investors.
- More than $400 billion worth of stock value has evaporated since Tesla’s shares dropped 40 percent since April 4. This reveals the risks the company is facing.
- These include increased competition, a lack of new products, and lawsuits alleging racial discrimination.
- China’s production problems have undermined Tesla’s claim to being the most valuable car company in the world.
Chinese buyers are flocking to Tesla vehicles, fuelling hopes of supercharged growth in the world’s largest auto market. With a market share of 2.5 percent in the first quarter of 2022, Tesla is closing in on luxury car makers BMW, Mercedes-Benz, and Audi.