The year 2024 so far is not looking too good for billionaire Elon Musk as his net worth sinks lower following the drop in Tesla’s market capitalization by $30 billion at the close of trade on Monday.
Elon Musk’s net worth has recorded a $3.9 billion drop, putting his valuation at $194 billion according to Forbes real-time billionaire estimates on Monday.
The decline follows the performance of Tesla shares which dipped Monday to their weakest level since last May, extending 2024’s brutal selloff for Elon Musk’s electric vehicle maker as Tesla loses gas compared to its fellow big technology stocks.
The sharp fall, amounting to 5% in midday trading, positioned Tesla on track for its lowest close since May 18, 2023. This selloff resulted in a staggering $29.7 billion reduction in Tesla’s market capitalization, bringing it down to $568.7 billion.
Due to this drop, Tesla slipped to the 10th position on the list of the highest-valued companies in the S&P 500, falling below Broadcom Inc. and Eli Lilly & Co.
According to a report from German business daily Handelsblatt, Germany-based software company SAP SE, which manages a fleet of 29,000 vehicles, is discontinuing its purchase of Teslas. The fleet manager cited challenges with Tesla’s frequent changes in list prices and early deliveries, making planning and storage difficult.
What you should know
Tesla’s recent setback coincides with heightened scrutiny surrounding CEO Elon Musk’s $56 billion pay package, which was recently nullified by a Delaware court.
- This scrutiny is compounded by a recent Wall Street Journal report that sheds light on Musk’s purported exertion of pressure on board members.
- As of April 2023, regulatory filings indicate that Musk possesses approximately 13% ownership of Tesla. Additionally, he holds around 304 million exercisable stock options stemming from his 2018 compensation package.
- The commencement of the year witnessed a decline in Musk’s net worth, leading to his loss of the title of the world’s richest man to fashion billionaire Bernard Arnault, as reported by Forbes. Musk currently holds the position of the world’s richest man on the Bloomberg Billionaires Index, with an estimated wealth of $200 billion.
In tandem with Musk’s financial challenges, Tesla’s stock has undergone a sharp decline of 28.7% since the inception of 2024. This downturn positions Tesla as the worst performer in the S&P 500 year to date. The market capitalization of $568.7 billion marks a substantial decrease from Tesla’s record market cap of $1.24 trillion on January 3, 2022.
The repercussions of Tesla’s stock selloff have extended beyond the company itself, impacting other electric vehicle (EV) manufacturers and contributing to a more widespread downturn in the sector.
This interconnected decline underscores the challenges currently faced by the broader EV industry in light of Tesla’s influential position and the dynamics of the market.
