Elon Musk Loses $27 Billion As Tesla Stocks Plummet

Published March 8th, 2021 - 01:00 GMT
Elon Musk Loses $27 Billion As Tesla Stocks Plummet
Elon Musk has lost $27 billion in wealth since Monday as Tesla stock dropped. (Shutterstock)
For months, Musk and Bezos had vied for the coveted richest man status

Elon Musk has lost $27 billion in wealth in the span of a week after Tesla's plunging share price took a major bite out of the entrepreneur's net worth.

Musk, 49, was worth $157 billion after markets closed on Friday, marking a 15 percent plunge in his net worth from the beginning of the week, according to the Bloomberg Billionaires Index.

After vying for months with Jeff Bezos for the title of world's richest man and topping the Amazon CEO as recently as last week, Musk is now firmly in the No. 2 spot and $20 billion behind Bezos.

It comes after Tesla shares soared more than 700 percent in 2020, triggering billions in additional compensation for Musk per the terms of his stock-based payment package. 

Analysts have long warned of a bubble in the tech sector, fueled in part by an influx of cash from small investors, with Tesla shares singled out as potentially overvalued.

Tech shares soared more than the rest of the market for much of the pandemic, as well as in the years preceding it. 

But on Friday, Tesla was the heaviest weight dragging on the S&P 500. The stock fell 3.8 percent and is now down 15.3 percent so far this year. 

The electric carmaker faced headwinds for its Model 3 line in Fremont, California, which was forced to shut down for two weeks, reportedly due to a shortage in crucial computer chips. 

Yet Wedbush analyst Dan Ives remains optimistic, predicting in a note obtained by DailyMail.com that Tesla will hit a market capitalization of $1 trillion this year.

That would represent a 74 percent increase from current share prices -- but Ives believes the growth opportunities for Tesla in China support his view. 

'We believe China could see eye popping demand into 2021 and 2022 across the board with Tesla's flagship Giga 3 footprint a major competitive advantage,' wrote Ives. 

Throughout 2020, Tesla ramped up production in China and in Decmber began selling its locally made Model Y sport utility vehicle there at a price analysts say will disrupt the conventional premium car market. But the company faces growing competition by local challengers, including Nio Inc and Xpeng Inc. 

Meanwhile, Musk on Saturday promised that Tesla would likely confirm a delivery date for its highly touted Cybertruck sometime in the second quarter.

'Update probably in Q2. Cybertruck will be built at Giga Texas, so focus right now is on getting that beast built,' he told a fan on Twitter.  

Tesla delivered 180,570 vehicles during last year's holiday quarter, a quarterly record, even though it narrowly missed its ambitious 2020 goal of half a million deliveries. 

While Tesla has increased deliveries overall, the company in an earnings call that the average sales price per vehicle dipped 11 percent on a yearly basis, with more consumers switching to the less expensive Model 3 and Model Y. 

Musk has made an ambitious claim that Tesla's Full Self Driving software will have Level 5 autonomy capabilities by the end of 2021.

On Friday, he said that FSD is doubling its size with a new software update, and eventually increasing the number of participants tenfold.

'Still be careful, but it's getting mature,' Musk tweeted Friday. He said Saturday that Tesla would add a 'download beta' button to Tesla displays in the coming days 'due to high levels of demand.' 

© Associated Newspapers Ltd.

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