Elon Musk's fortune dropped by more than 16 trillion won in just one day on the 20th (local time). Bloomberg reported that issues arose one after another within 24 hours at companies Musk owns, from the world's largest electric vehicle manufacturer Tesla to space company SpaceX and social networking service (SNS) Twitter, dragging down the value of his wealth.
Bloomberg cited the billionaire index on the day, reporting that Musk's fortune decreased by $12.6 billion (about 16.7 trillion won). As a result, Musk's wealth was estimated at $164 billion. His fortune has increased by $26.8 billion so far this year. Musk is currently the world's second richest person, following Bernard Arnault, chairman of Louis Vuitton Mo?t Hennessy (LVMH).
Musk currently serves as the CEO of five companies simultaneously: Tesla, SpaceX, Twitter, tunnel boring company The Boring Company, and low Earth orbit satellite communication service Starlink.
1) Tesla's Q1 Earnings Shock
The sharp decline in Musk's fortune was due to Tesla's Q1 earnings announcement the previous day. Musk holds $67 billion of Tesla shares, the largest portion of his total wealth.
Tesla announced that its net profit for Q1 this year was $2.513 billion, down 24% compared to the same period last year. Revenue increased by 24% to $23.329 billion compared to a year ago. The price cuts implemented during Q1 boosted vehicle sales but reduced net profit, according to analysis.
In a conference call with analysts, when asked about maintaining profitability to some extent, Musk said, "It's hard to say," adding, "It's better to sell many cars at lower margins and have autonomy over pricing to recoup those margins in the future." He also noted that despite ongoing economic uncertainty, vehicle orders exceed production capacity.
Following Musk's remarks, investors expressed concerns about profitability. On the day of the Q1 earnings announcement, Tesla's stock price fell more than 2%, and on the following day, it plunged 9.75% to close at $162.99. Foreign media reported that Tesla's market capitalization was $517 billion, lower than Meta Platforms for the first time since 2021.
2) SpaceX Starship's First Test Flight Failure
Another issue shaking Musk's net worth was the failure of SpaceX's spacecraft 'Starship' during its first test flight. SpaceX launched Starship from the 'Starbase' space launch facility on the southern Texas coast at Boca Chica that morning. However, the vertically rising Starship spun mid-flight about four minutes after liftoff and exploded in the air.
After the test flight failure, Musk tweeted, "Congratulations to the SpaceX team on an exciting test flight launch," adding, "We learned a lot for the next test in a few months." Musk posted several photos and launch videos of Starship on Twitter throughout the day, expressing both anticipation and disappointment. According to him, the next test flight is expected to be attempted several months later.
Since SpaceX is a privately held company, Musk's wealth is not immediately affected numerically, but it is noteworthy in terms of valuation. SpaceX was recently valued at $140 billion in a funding round, nearly five times the $30.5 billion valuation in 2018. Foreign media assess that Musk's fortune is likely to be influenced by SpaceX's future trajectory.
3) Twitter Removes Verified Badge
Bloomberg also analyzed that Twitter's decision to remove the verified badge, which shows that accounts of celebrities and politicians are authentic, starting from that day, likely dealt a blow to Musk's net worth. Twitter now charges individuals $7.99 per month and companies $1,000 per month for the verified badge, which had been provided for free until now. This service was launched as part of Musk's revenue-generating efforts since acquiring Twitter last October.
While some welcomed the removal of the verified badge as promoting equality among users, others expressed concerns that fake accounts might spread and misinformation could proliferate. The Washington Post (WP) reported that some former employees worried that the large-scale removal of verified badges could lead to service collapse. Although started as a revenue business, there are concerns that Twitter's status as an SNS could be shaken.
Bloomberg evaluated, "With dramas unfolding across the empire, Musk's wealth has significantly decreased," adding, "(Due to these three issues) Musk experienced a turbulent 24 hours."
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