Elon Musk’s Wealth Slashed by Nearly $13 Billion After SpaceX Explosion

Elon Musk experienced a significant drop in his wealth this week amid tumultuous times at Tesla, SpaceX, and Twitter. Credit: Daniel Oberhaus / Wikimedia Commons/ CC BY 4.0

Elon Musk’s wealth dropped by almost $13 billion on Friday over the course of just a single day. The dramatic financial nosedive occurred amid tumultuous times at all three of Musk’s major companies, Tesla, SpaceX, and Twitter.

According to the Bloomberg Billionaires Index, Musk’s wealth declined by $12.6 billion to $164 billion. It was this biggest decline in wealth recorded thus far this year.

The slide in Musk’s net worth coincided with a sharp fall in Tesla’s share prices, the explosion of SpaceX’s Starship, and the disappearance of the coveted blue checkmarks on Twitter for many verified users.

Elon Musk loses $12.6 billion

Musk who is now worth $163.9 billion, is the second richest person on the planet. In first place is Bernard Arnault, the CEO and chairman of LVMH, Moët, Hennessy, and Louis Vuitton.

Musk and Arnault have been trading positions as the first and second richest men in the world since Musk first lost the top spot in December last year. Arnault, who is currently leading the race has an estimated net worth of $211 billion.

Bloomberg calculates Musk’s total wealth based on his ownership percentages in three companies. This includes a 13% stake in the publicly-traded Tesla, a 42% stake in the privately-held SpaceX, and a 79% share in Twitter, which he acquired for $44 billion in 2022. Musk serves as the CEO of all three companies..

A chaotic week

It proved to be a tumultuous week at all three of Musk’s companies. The fall in Tesla’s share prices was probably the most consequential factor that impacted Musk’s wealth.

On Thursday, Tesla released their first-quarter results which were underwhelming, with a nearly 20% decrease in gross margins reported. The electric vehicle manufacturer has implemented multiple bold price cuts on their vehicle offerings in recent months, which boosted sales despite a sluggish EV market. However, this decision has caused a negative impact on Tesla’s overall profit margins.

The subsequent closing of markets on Thursday saw Tesla’s stock price decrease by 9.8% to $162.99. This was important because Musk’s largest asset is his 13% ownership stake in Tesla.

That same day, SpaceX launched the inaugural test flight of Starship, the most powerful rocket ever created. However, just four minutes into its flight, the rocket system failed to separate properly and exploded.

This is not necessarily as bad as it sounds. The SpaceX engineers – and Musk himself – concluded that the mission was still a success as Starship still exceeded expectations. Within the context of the test, a successful launch alone was considered a success.

Crucially, the Super Heavy booster and the rest of the spacecraft passed a point called max Q, where forces on the spacecraft reach their highest point before entry into the less dense upper atmosphere.

Further tests are scheduled in coming months and Musk expects them to be more successful. He has a 42% stake in SpaceX.

Meanwhile at Twitter, Musk fulfilled his promise to remove blue checkmarks from legacy accounts on Thursday. He previously described the checkmarks as an unfair “lords & peasants system”. Users will now have to pay an $8 monthly subscription to Twitter Blue for verification.

The decision to remove the checkmark verification system has raised concerns, particular among advertisers, that misinformation could increase on the social media platform as a result. Without verification, there are worries that people could pose as famous individuals or organizations and disseminate misleading information under their guise.