Despite Elon Musk retaining his title as the world's richest individual, Tesla's stock took a significant hit, dropping over 9% on Thursday, October 19. This decline, speculated to be a result of Tesla's Q3 revenue and profits falling short of expectations for the first time since Q2 2019, wiped out at least $16 billion from Musk's net worth.
According to the Bloomberg Billionaires Index, even after this financial setback, Musk's wealth stands at a staggering $210 billion. This places him comfortably ahead of the second and third richest individuals globally, Amazon founder Jeff Bezos and French luxury goods magnate Bernard Arnault of LVMH.
Forbes, which also tracks billionaire wealth, noted that Musk's fortune decreased by $24 billion in a single day when the stock fell 9%, bringing his net worth to approximately $232.2 billion. Still, he remains the wealthiest person on the planet.
To put this in perspective, recent data from the Federal Reserve indicates that the median net worth of U.S. households in 2022 is $193,000. This means Musk's single-day loss equates to the combined net worth of about 124,000 American households.
Public records show that Musk owns roughly 13% of Tesla's shares and holds over 300 million exercisable options. As a result, about 68% of his wealth is tied to these holdings, making his personal fortune closely linked to the company's stock performance.
During the COVID-19 pandemic, from March 2020 to November 2021, Tesla's stock skyrocketed over 1300%, reaching a peak of $410. This surge propelled Musk into the top ten global billionaires in September 2021, and by November, he topped the list with a wealth of $320 billion.
Bernard Arnault, 22 years Musk's senior, briefly overtook him as the world's richest person in December of the previous year, riding on the rise of LVMH stock. However, as tech stocks rebounded this year and European luxury goods stocks struggled with weak demand, Musk reclaimed the top spot on May 31. Just two days before the Tesla stock plunge, on October 17, Bezos surpassed Arnault to become the world's second-richest person.
Wall Street analysts believe that aside from Tesla's Q3 total revenue growth hitting a three-year low and profit margins at their lowest in four years, Musk's pessimistic comments during the earnings call about global economic conditions and consumer confidence in purchasing vehicles in a high-interest-rate environment added to the unease. He also mentioned potential price reductions and tried to temper expectations for Tesla's upcoming electric pickup, the Cybertruck.
Following the earnings release, 15 analysts revised their price targets for Tesla downward, though the median estimate of $260 remains above the current trading level. Despite Thursday's significant drop, Tesla's stock is still up nearly 80% for the year. Many investors remain optimistic about the company's ability to outperform competitors in uncertain economic times and the long-term boost from autonomous driving.
Reports from three weeks ago highlighted that the three tech billionaires with the most significant wealth increase this year are Musk of Tesla, Mark Zuckerberg of Meta, and Bezos of Amazon.
Even with Thursday's sharp decline in Tesla's stock price and the subsequent reduction in Musk's net wealth, his fortune has still grown by over $70 billion in 2023, making him the most rapidly ascending billionaire in terms of wealth increase among the world's top ten richest individuals.
