Technology entrepreneur Elon Musk lost the title just two weeks after becoming the world’s first trillionaire or ‘millionaire’. According to recent data from Bloomberg, this loss of assets came shortly after the huge frenzy created by SpaceX’s stock market debut.
Musk’s net worth is now down to $957 billion (around £727 billion), according to data released on Tuesday (June 23) by the Bloomberg Billionaires Index, which is updated daily at 5:30 p.m. New York time. But less than two weeks ago, his wealth reached 1.11 trillion dollars.
Shares of SpaceX and Tesla fell amid a sudden slump in tech stocks and growing skepticism among investors regarding the long-term benefits of artificial intelligence (AI). And market analysts think that this huge wealth of masks has been underestimated.
But despite these huge losses, Elon Musk remains the world’s richest man, and his wealth gap is still far greater than his nearest rivals.
On June 12, Elon Musk’s rocket and satellite manufacturer SpaceX made history with the long-awaited debut of Elon Musk’s rocket and satellite maker SpaceX on the Nasdaq stock market. The IPO (initial public offering) was priced at $135 per share, which rose to $150 in early trading.
As a result of this blockbuster IPO, the market value of SpaceX stands at more than 1.77 trillion dollars. With Musk owning about 42 percent of SpaceX, his personal wealth account instantly crossed the $1 trillion milestone. Then on June 16, due to the massive demand of investors, when the price of SpaceX shares reached a maximum of 225.64 dollars, his total assets stood at 1.32 trillion dollars.
But this trend did not last long. Tech stocks around the world fell sharply due to concerns over huge costs in the technology infrastructure and artificial intelligence sectors and interest rate volatility. Tech giants like Nvidia, Intel and AMD are severely affected.
However, the biggest blow of this recession fell on SpaceX. Shares of SpaceX fell more than 30 percent from their mid-June highs to around $156. SpaceX’s 16 percent plunge in just one day on June 22, a volatile Monday, wiped nearly $240 billion from Musk’s personal fortune.
Shares in his electric car maker Tesla fell nearly 6 percent the next day, compounding the financial losses. Musk owns about 12 percent of Tesla.
Why is the wealth of masks fluctuating so fast?
According to market analysts, the main reason for this volatility in Elon Musk’s wealth is his single concentrated investments. Unlike traditional billionaires, he has about 80 percent of his net worth in SpaceX and the rest in Tesla. As a result, small fluctuations in these two institutions have a major impact on his total assets.
Danny Hewson, chief financial analyst at financial analyst firm AJ Bell, said: ‘A lot of decisions in stocks like SpaceX are emotional and can be made based on the huge potential of space travel. But one always needs to be realistic and patient when it comes to investments, even when such huge sums of money are involved.’
The market is expected to come under a bit more pressure when the ban on the sale of shares by company insiders is lifted at the end of next July. But analysts believe that Musk will regain his trillionaire status only if SpaceX’s shares turn around 6 percent. As a result, the possibility of his name being written as the world’s first ‘repetitive trillionaire’ cannot be ruled out.
