Elon Musk faces $9 billion drop in net worth amid Tesla stock decline
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San Francisco: Tesla CEO Elon Musk experienced a significant setback in his wealth as Tesla's stock witnessed a notable decline.
The stumble in Tesla's stock value was attributed to an analyst downgrade and less-than-impressive quarterly reports from smaller electric vehicle competitors.
On Thursday, Tesla's stock price plummeted by 5.5% to $210, prompted by HSBC analyst Michael Tyndall's initiation of coverage with a sell rating and a target price of $133. Tyndall's sell rating is indicative of a growing investor caution toward Tesla's stock, which has exhibited volatility in recent months.
This downgrade comes at a time when Tesla is grappling with various challenges, including heightened competition from rivals, escalating costs, and disruptions in the supply chain.
The company is also under scrutiny from regulators globally regarding its self-driving technology and safety concerns.
Forbes Magazine reported that other electric vehicle stocks are also facing declines, with American electric car makers Rivian (down 10% on Thursday) and Lucid (down 5%) witnessing drops following disappointing earnings reports, projecting substantial cash burn for each company this year.
As per Forbes' valuation, Elon Musk, who holds approximately 13% of Tesla shares, incurred a loss of $8.7 billion on Thursday, marking a decline of more than $7 billion larger than that of any other billionaire.
Despite this setback, Musk retains his position as the wealthiest person globally, with an estimated net worth of $223.7 billion. However, this remains about $100 billion below his peak fortune of $320 billion in November 2021 when Tesla's valuation exceeded $1.2 trillion.