Elon Musk, the CEO of Tesla, saw his wealth take a steep dive on Thursday, losing a staggering $20.3 billion. This significant loss came as Tesla’s shares experienced their worst slump in months, amid concerns about a potential drop in the company’s profits. The shares plummeted by 9.7% to $262.90 per share during trading hours in New York, marking the sharpest decline since April 20.
Musk’s announcement on Wednesday that Tesla would have to continue lowering prices if interest rates keep rising likely added to the fears surrounding the company’s future profitability. As a result, his net worth, according to Bloomberg’s Billionaires Index, dropped to $234.4 billion. This makes it the seventh-largest decline ever recorded among the world’s richest individuals listed on the index.
Moreover, this significant loss in Musk’s wealth has further narrowed the gap between him and Bernard Arnault, the chairman of luxury goods maker LVMH. The gap between the world’s two richest people, Musk and Arnault, has been fluctuating over the past months. Musk overtook Arnault back in June to become the world’s richest person. However, even after the recent slump, Musk’s fortune still exceeds Arnault’s by approximately $33 billion.
As Musk’s personal wealth is tied directly to the value of Tesla stock, with him owning around 13% of the company, any fluctuations in share prices have a direct impact on his net worth. In addition to his Tesla holdings, Musk also derives wealth from his investments in Space Exploration Technologies (SpaceX) and Twitter.
This year has been particularly favorable for both Musk and Arnault in terms of wealth accumulation. Musk’s net worth had surged by approximately $118 billion, reaching over $250 billion as of Wednesday, primarily driven by the remarkable 136% increase in Tesla’s share price year-to-date. Similarly, Arnault has experienced an impressive addition of $39 billion to his net worth, which climbed to $201.2 billion. This surge can be attributed to a 26% gain in LVMH’s share price in 2023.
The race for the title of world’s richest person between Musk and Arnault has been a closely watched competition throughout the year. Their contrasting industrial sectors have pitted Tesla’s electric vehicle dominance against LVMH’s luxury goods empire. Both individuals have continued to make substantial gains, although recent developments have caused Musk’s lead to shrink slightly.
While Musk’s recent wealth decline is noteworthy, it is important to bear in mind that he still holds a considerable advantage over other billionaires. The continued success of Tesla, coupled with Musk’s diverse portfolio of ventures and investments, positions him as one of the most influential and wealthy individuals in the world.
In conclusion, Elon Musk’s wealth took a substantial hit of $20.3 billion due to Tesla’s stock slump. However, his overall net worth remains significantly higher than that of Bernard Arnault, his closest competitor for the title of the world’s richest person. Despite the recent setback, Musk’s fortunes are firmly tied to the success of Tesla and his other business ventures, demonstrating his enduring influence and economic prowess.