Tesla Down 32% from All-Time High, Musk Loses Over $50bn

Tesla Down 32% from All-Time High, Musk Loses Over $50bn

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Key Takeaways

• Tesla rout substantially stronger than the broader market’s decline
• Elon Musk’s wealth down from $210bn at its peak to $157bn

Tesla’s plunge has far exceeded the drop in the tech-heavy Nasdaq Composite and the broader market as a whole. About $300bn of Tesla’s market cap has evaporated in 2021 as the EV maker’s stock has dropped 32% since its peak at $883 on Jan 26. Tesla is now trading below $600, around levels dating back to December last year, meaning that the stock is now lower than when it entered the S&P500 on Dec 21. Year-to-date, Tesla stock is down a little over 18%.

As Tesla shares dropped, Elon Musk, the billionaire entrepreneur behind the brand, saw his net worth decline accordingly due to his 18% stake in the company. At Tesla’s peak, Elon Musk had a personal wealth of over $210bn, putting him way ahead of Jeff Bezos, Amazon’s founder and departing CEO. However, as the stock spiralled down, Elon Musk suffered enormous losses day in and day out. Lastly, on Friday, the stock dropped 13% before closing down 3.8% to $597, resulting in a $5.3bn loss for Elon Musk that day. In total, his net worth has slipped by over $50bn from Jan 26 to date as Elon lost his number one spot as the world’s wealthiest man, promptly taken by Jeff Bezos, who is now ahead by $20bn.

In comparison to Tesla’s stock performance, the Nasdaq Composite has fallen 8% from its all-time high reached on Feb 12, while the S&P500 is down a little over 2.00% for the same period and the Dow Jones Industrial Average has slipped by 1.50% from its all-time high.

Tesla Announces Full Self Driving Mode Feature

Tesla’s rise in the months leading to the January peak was underpinned by strong quarterly results, positive expectations related to Joe Biden’s clean technologies agenda, combined with enthusiasm from the retail trading community. Opponents were quick to point out that Tesla stock was the most prominent example of an unsustainable frothiness in the market. In 2020, Tesla shares soared 743% and zeroed in on valuation near $1tn.

More recently, Mr. Musk has been a vocal proponent of bitcoin. In February, he unveiled a $1.5bn allocation of Tesla cash into bitcoin, effectively introducing bitcoin to the S&P500 benchmark index. Elon Musk’s enthusiasm about the cryptocurrency market has made him one of the most important crypto cheerleaders. On multiple occasions, he had tweeted in support of bitcoin, cryptocurrencies as a whole, and dogecoin, a digital asset initially created as a joke.

Tesla pre-market trading indicates a lower open on Monday even after the company unveiled its expansion of Full Self Driving mode. On Saturday, Elon Musk announced on Twitter the EV maker is doubling the size of the beta version with a new software update and eventually offering the service to 10 times more participants. “Still be careful, but it’s getting mature,” the Tesla chief said.