Elon Musk’s wealth slumps US$20 billion as Tesla shares tumble

ELON Musk’s fortune slumped US$20.3 billion on Thursday (Jul 20) after Tesla warned it may have to keep cutting the prices of its electric vehicles (EV), sending shares tumbling.

The drop in net worth to US$234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index, and further narrows the wealth gap between Musk and Bernard Arnault, the world’s two richest people. Musk’s fortune still exceeds that of Arnault, chairman of luxury goods maker LVMH, by about US$33 billion.

Musk wasn’t the only US technology billionaire having a tough day. Amazon.com’s Jeff Bezos, Oracle’s Larry Ellison, former Microsoft CEO Steve Ballmer, Meta Platforms’s Mark Zuckerberg and Alphabet co-founders Larry Page and Sergey Brin shed a collective US$20.8 billion in net worth as the tech-heavy Nasdaq 100 fell 2.3 per cent.

Shares of Austin-based Tesla slid 9.7 per cent to US$262.90 in New York, the most since Apr 20, after the company warned of more hits to its already-shrinking profitability. Months of markdowns have taken a toll on automotive gross margin, which fell to a four-year low in the second quarter. Musk, the company’s CEO, said on Wednesday Tesla will have to keep lowering prices if interest rates continue to rise.

Musk, 52, derives his wealth primarily from his stake in the EV manufacturer, as well as his holdings in Space Exploration Technologies and Twitter. His wealth had increased about US$118 billion this year through Wednesday, as shares of Tesla climbed 136 per cent.

Arnault, 74, has seen his net worth rise by US$39 billion this year to US$201.2 billion. Shares of Paris-based LVMH have gained 26 per cent in 2023. BLOOMBERG