Elon Musk’s trillionaire status has taken a hit as the value of his space exploration company SpaceX plummeted. As reported by Bloomberg’s Billionaires Index, Musk’s net worth dropped to $957 billion from $1.1 trillion in less than two weeks, following SpaceX’s recent public debut that initially propelled him to become the world’s first trillionaire.
Forbes’ Real-Time Billionaires list also reflected a decline, pegging Musk’s fortune at $964 billion. Despite this setback, Musk remains the wealthiest individual globally by a significant margin.
The decrease in SpaceX’s shares, which contribute to nearly 80% of Musk’s wealth, along with declines in his electric vehicle firm Tesla, coincided with a broader sell-off in technology stocks. Musk holds substantial ownership stakes, approximately 40% in SpaceX and 12% in Tesla.
Concerns about escalating geopolitical tensions and economic uncertainties, including geopolitical conflicts like the one with Iran, have raised doubts about the long-term profitability of artificial intelligence (AI).
Musk achieved trillionaire status on June 12 when SpaceX’s stock surged following its prominent initial public offering on Wall Street, despite the company reporting an overall $2.6 billion loss from operations the previous year.
Following an IPO price of $135 per share, SpaceX shares soared over 19% on June 12, starting at around $150, reaching a peak of $168, and closing just under $161. This closing price pushed the company’s market value to $2.1 trillion, ranking it as the sixth-largest public company in the US.
After hitting a high of $225 on June 16, SpaceX’s shares retreated to $156 by Tuesday and further dropped to $154 on Wednesday, marking a 1.35% decline in early trading.
Financial experts like Danni Hewson from AJ Bell emphasize the importance of rational decision-making in investments, cautioning against emotional choices, particularly in high-value investments. Susannah Streeter, chief investment strategist at Wealth Club, noted SpaceX’s decline post-IPO, partly attributing it to plans for a substantial bond sale of approximately $20 billion, which has raised concerns about cash flow for the capital-intensive venture.