Elon Musk has lost his trillionaire status barely weeks after claiming it, as shares in SpaceX and the electric carmaker Tesla came under heavy pressure this week.
The entrepreneur’s total net worth slipped to $957bn on Wednesday, according to the Bloomberg Billionaires Index, the daily ranking of the world’s richest people. It is a striking reversal for a businessman who, only this month, became the first person in history to be valued at more than $1tn.
Musk crossed that threshold when SpaceX made its long-awaited stock market debut. The aerospace group raised a record-breaking $75bn at a valuation of $1.75tn, instantly placing it among the most valuable companies on the planet and turbo-charging its founder’s paper fortune.
The shares have been anything but settled since. After listing, the stock surged, briefly carrying SpaceX above a $2tn valuation and lifting Musk’s estimated wealth to $1.1tn. They have since fallen sharply from that peak, wiping hundreds of billions of dollars from the company’s market value.
The slide appears to have been amplified by SpaceX’s relatively small public float. With only a modest slice of the company freely traded, comparatively limited volumes have been enough to trigger outsized swings in the price, a dynamic familiar to anyone who has watched thinly traded listings whip about in their early sessions.
Some investors also pointed to the group’s $25bn bond sale, completed this week, which SpaceX said would help repay a bridging loan taken out in March. The fundraising is a reminder of the sheer capital intensity of the business, a venture that consumes cash at a pace few firms could sustain.
SpaceX shares fell a further 0.8 per cent on Wednesday to $154.83 in New York. Tesla, where Musk remains chief executive, dropped 1.6 per cent to $375.61, extending a difficult run for a company that has already been wrestling with questions over its leadership and direction.
Tesla has been swept up in a broader sell-off across technology and growth stocks, as investors reassess lofty valuations. Sentiment soured further after a Bank of America report forecast three US interest rate rises this year to counter rising inflation, while Goldman Sachs unsettled markets by drawing comparisons between today’s technology rally and the dotcom bubble of the late 1990s.
In a note flagging the tension between strong fundamentals and stretched valuations, analysts at the investment bank wrote: “The macro story around AI still looks quite secure, especially compared to the late 1990s. The investment boom still appears to have room to grow, in the absence of unexpected shocks, so the outlook for beneficiaries of that boom still looks supportive. But the market has continued to boost the value it is assigning to those future gains, making it more vulnerable to any news that challenges that optimistic assessment.”
For all the drama, Musk remains comfortably the world’s richest person, and his trillionaire milestone may yet prove a question of timing rather than a closed chapter, particularly given the $1tn Tesla pay package his shareholders approved. According to the Bloomberg index, the Google founders Larry Page and Sergey Brin rank second and third, with $297bn and $276bn respectively, while Amazon’s Jeff Bezos follows on $257bn.
Whether this week marks a blip or the start of a longer correction, it underlines an uncomfortable truth for founder-led growth companies: when a fortune is built almost entirely on the share price of two volatile businesses, the path back below $1tn can be every bit as swift as the climb above it.
