Elon Musk, a billionaire, is not having a good start to 2024 as his net worth continues to decline after Tesla’s market value fell by $30 billion at the conclusion of trading on Monday.
According to Forbes real-time billionaire estimates on Monday, Elon Musk’s net worth has decreased by $3.9 billion, valuing him at $194 billion.
The drop comes after Tesla’s stock performance, which plummeted on Monday to its lowest point since May of last year, prolonging Elon Musk’s electric car manufacturer’s severe 2024 selloff as Tesla behind other large technology firms in terms of price.
The sharp fall, amounting to 5% in midday trading, positioned Tesla on track for its lowest close since May 18, 2023. This selloff resulted in a staggering $29.7 billion reduction in Tesla’s market capitalization, bringing it down to $568.7 billion.
Due to this drop, Tesla slipped to the 10th position on the list of the highest-valued companies in the S&P 500, falling below Broadcom Inc. and Eli Lilly & Co.
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According to a report from German business daily Handelsblatt, Germany-based software company SAP SE, which manages a fleet of 29,000 vehicles, is discontinuing its purchase of Teslas. The fleet manager cited challenges with Tesla’s frequent changes in list prices and early deliveries, making planning and storage difficult.
Tesla’s recent setback coincides with heightened scrutiny surrounding CEO Elon Musk’s $56 billion pay package, which was recently nullified by a Delaware court.
This scrutiny is compounded by a recent Wall Street Journal report that sheds light on Musk’s purported exertion of pressure on board members.
As of April 2023, regulatory filings indicate that Musk possesses approximately 13% ownership of Tesla. Additionally, he holds around 304 million exercisable stock options stemming from his 2018 compensation package.
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The commencement of the year witnessed a decline in Musk’s net worth, leading to his loss of the title of the world’s richest man to fashion billionaire Bernard Arnault, as reported by Forbes. Musk currently holds the position of the world’s richest man on the Bloomberg Billionaires Index, with an estimated wealth of $200 billion.
In tandem with Musk’s financial challenges, Tesla’s stock has undergone a sharp decline of 28.7% since the inception of 2024. This downturn positions Tesla as the worst performer in the S&P 500 year to date. The market capitalization of $568.7 billion marks a substantial decrease from Tesla’s record market cap of $1.24 trillion on January 3, 2022.
The repercussions of Tesla’s stock selloff have extended beyond the company itself, impacting other electric vehicle (EV) manufacturers and contributing to a more widespread downturn in the sector.
This interconnected decline underscores the challenges currently faced by the broader EV industry in light of Tesla’s influential position and the dynamics of the market.
