Elon Musk loses world’s richest crown as Tesla stock tanks

A disappointing Investor Day that was short on specifics for a new electric car saw $50 billion wiped from the company's value

Tesla co-founder Elon Musk is again the world's second-richest person with a net worth of $176 billion. AFP

Elon Musk is no longer the world’s richest person after shedding $7.71 billion from his net worth on Thursday, as shares in Tesla tanked amid Wall Street disappointment that the centibillionaire’s Investor Day event fell short on specifics.

Once again, Mr Musk, co-founder of Tesla and also the owner of Twitter and SpaceX, is back to being the world’s second-richest person with a net worth of $176 billion after a short three-day reign in the number one spot, according to data from the Bloomberg Billionaires Index.

Bernard Arnault, chairman of French luxury group LVMH, has regained the world’s richest person crown with a personal fortune of $187 billion.

Watch: Who is Bernard Arnault, the man who replaced Elon Musk as world’s richest?

The majority of Mr Musk’s fortune is tied to Tesla stock, which fell to as low as $186.77 on Thursday — its biggest intraday drop since January.

The stock pared back some losses to end the trading day 5.85 per cent down at $190.87, wiping $50 billion from the company’s value.

On Monday, Tesla stock hit an intraday high of $210.70, which catapulted Mr Musk back to the top position on the Bloomberg Billionaires Index with a net worth of $187 billion.

However, the stock is still down by more than half its value compared with January 2022, when it was trading at $399.93.

The stock had rallied sharply over the past two months, as investors piled in ahead of the four-hour Tesla Investor Day event that many expected would reveal plans for a cheaper new electric car, Bloomberg reported.

Instead, the event was light on any specific details about the next vehicle, it said.

“I’d love to really show you what I mean and unveil the next-gen car, but you’re going to have to trust me on that until a later date,” Franz von Holzhausen, Tesla’s design chief, said during the event at the company’s headquarters in Austin, Texas.

“We’ll always be delivering exciting, compelling and desirable vehicles, as we always have.”

The investor day “was heavy on discussion relative to clean energy transition and on the company’s approach to designing and developing vehicles generally, but short on specifics or measurable metrics to track its progress”, JP Morgan analyst Ryan Brinkman told Bloomberg.

Mr Musk, 51, is one of the biggest gainers on the Bloomberg Billionaires Index this year, adding $39.3 billion, or 28.7 per cent, to his net worth since January 1.

It was a tumultuous 2022 for Mr Musk, which resulted in his wealth plummeting amid a sell-off of technology stocks and numerous controversies related to his $44 billion acquisition of Twitter.

In January, Mr Musk broke the world record for the biggest wealth loss in history after shedding $182 billion from his net worth since November 2021, according to a report by Guinness World Records.

In 2022 alone, the father of 10 shed $138 billion from his net worth — almost equivalent to the gross domestic product of Hungary — resulting in Mr Musk losing his world’s richest crown for the first time in 14 months on December 12.

Mr Musk started 2023 with a net worth of $138 billion, a sharp drop from the peak of his wealth of $320 billion in 2021, Forbes magazine data shows.

He made his first millions in the 1990s, when he sold his first company, Zip2, for more than $300 million. He then launched X.com, an online payment system that eventually became PayPal, which he sold to eBay for $1.5 billion in 2002.