Tesla shares plunge 16% over Two consecutive days
Tesla’s controversial CEO Elon Musk, has reportedly lost about $50 billion of his wealth due to a significant drop in the value of his company’s shares. According to the Bloomberg Billionaires Index, the company’s shares declined for two days in a row, by 16% in one week alone. It marks the biggest decline over a two-day period in the history of the Bloomberg Billionaires Index.
The shrinkage ofMusk’s fortune is the biggest such loss in the history of Billionaires. It even exceeds the amount of money that fellow billionaire Jeff Bezos lost due to his divorce. Elon Musk became the world’s richest man in January 2021, with a sizable gap in wealth between him and his nearest challenger, Jeff Bezos. Thus the loss doesn’t change anything about Musk’s status as the world’s richest man.
The decline caused by Tesla stock price decline will have little effect on Musk’s standing as the world’s richest man, as he still retains the spot even though he is now worth about $323 billion and the gap with his nearest challenger, Jeff Bezos, is still sizable at $82 billion.
How it Happened
The decline in the value of Tesla shares was massive after word of one of Elon Musk’s latest tweets spread. Musk was innocently inquiring from followers via a Twitter poll if he should sell some of his Tesla stock in order to clear up his pending taxes.
The Tesla CEO organized an innocent Twitter poll regarding the sale of his company’s stock, and the resounding majority of respondents answered yes to it. The result is that Tesla stock declined by about 7% on Monday before tumbling again on Tuesday, falling as much as 12%.
Another contributing factor of Tesla stock’s demise is the news that Kimbal Musk, a Tesla director and cousin of Elon Musk, sold Tesla stock worth more than $100 million. Musk tweeted another unfortunate post on his Twitter account, this time about his company’s deal with Hertz that helped increase the company’s stock valuation.
The Effects of the Tumbling Stock Crisis
Musk’s tweet, which caused a chain-reaction, has been dubbed the most expensive tweet ever. The tweet’s poll had 3.5 million participants, 57.9% of whom voted yes to the CEO’s question about selling his shares. It ended up costing the shares of the company significant value at first, though the company’s stock remains strong and has gained about 45% in 2021 alone, despite the recent loss.
The reason is that the market capitalization of Tesla stock hit $1 trillion and has stayed above it. The company’s case is also bolstered by an order for 100,000 Tesla cars from Hertz Global Holdings Inc. The rejuvenated billionaires’ income tax that is about to be enforced in the US is reportedly what kicked off the whole saga.