Elon Musk’s Net Worth Declines as Tesla’s Market Cap Drops $30 Billion: What You Need to Know.
In 2024, Elon Musk, the renowned billionaire, is experiencing a downturn in his fortunes as Tesla’s market capitalization plunges by $30 billion. This decline has led to a $3.9 billion reduction in Musk’s net worth, now estimated at $194 billion according to Forbes’ real-time billionaire estimates.
The drop in Tesla’s market capitalization is primarily attributed to the recent performance of its shares, which hit their lowest point since May of the previous year. This decline, amounting to 5% in midday trading, has positioned Tesla for its lowest close since May 18, 2023, resulting in a significant decrease in market capitalization to $568.7 billion.
As a consequence of this decline, Tesla has slipped to the 10th position among the highest-valued companies in the S&P 500, trailing behind companies like Broadcom Inc. and Eli Lilly & Co.
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Moreover, reports from sources such as German business daily Handelsblatt indicate challenges for Tesla, with Germany-based software company SAP SE discontinuing its purchase of Teslas due to difficulties in managing frequent price changes and early deliveries.
Key Points to Note:
- The setback faced by Tesla coincides with increased scrutiny surrounding CEO Elon Musk’s $56 billion pay package, recently nullified by a Delaware court.
- Musk’s ownership of approximately 13% of Tesla, along with around 304 million exercisable stock options, adds to the complexity of the situation.
- Musk’s net worth decline earlier in the year resulted in him losing the title of the world’s richest man to fashion billionaire Bernard Arnault, although he currently holds the top position on the Bloomberg Billionaires Index.
- Tesla’s stock has experienced a sharp decline of 28.7% since the beginning of 2024, making it the worst performer in the S&P 500 year-to-date.
- The broader repercussions of Tesla’s stock selloff have impacted other electric vehicle (EV) manufacturers, contributing to a sector-wide downturn.
This interconnected decline highlights the challenges faced by the EV industry, emphasizing Tesla’s influential position and its impact on market dynamics.
