Elon Musk lost $10 billion in net worth in a single day after sexual misconduct claims emerged
Tesla founder and CEO Elon Musk lost $10 billion in a single day after sexual misconduct allegations emerged against him.
He was worth around $212 billion on Thursday, according to the Bloomberg Billionaires Index. After the allegations broke Thursday night, his fortune fell to around $201 billion, according to the index.
According to Insider’s report, SpaceX, the aerospace company founded by Musk, paid a flight attendant $250,000 to settle a sexual misconduct complaint against Musk in 2018. Musk has denied the complaint.
Musk owns about 47% of SpaceX. Last week, the company reportedly reached a valuation of $125 billion. But it’s a private company, and as such, its valuation doesn’t change much from day to day.
The performance of Tesla’s stock in the public markets has the most significant impact on Musk’s wealth. Musk owns around 15% of the company, according to the BBC. After the allegations were announced, Tesla’s stock price fell 6.4%.
But news of Musk’s sexual misconduct and related financial fallout is just the latest incident in a prolonged decline in wealth since the start of this year. According to Bloomberg’s estimate, it is now $69 billion poorer since the start of the year. That’s partly because Tesla’s share price was lowered amid a global stock market selloff as investors worried about the health of the global economy.
But it’s also likely that Tesla investors were thinking about “key man risk,” or how damage to one individual could negatively impact an entire organization. “The risks of distraction for Musk (perception is reality) are hard to ignore,” Wedbush analyst Dan Ives tweeted Thursday, referring to Musk’s shared focus on Tesla and its upcoming acquisition on Twitter.
Tesla’s share price slide has accelerated since Musk announced he would rob Twitter of $44 billion in April. A day after that announcement, Tesla shares fell more than 12% as shareholders wondered how it would finance its takeover of Twitter, Insider reported.
In the past week alone, the automaker’s stock fell 14%, wiping around $110 billion off its market valuation, Bloomberg reported. “As long as the Twitter deal is there, and as long as Tesla shares go down, people are worried that Musk will have to sell more shares and get distracted and not pay as much attention to Tesla as he should. “, Gary Black, founder and managing partner of the actively managed ETF Future Fund LLC, told Bloomberg.
Musk is likely to see his wealth shrink further as Tesla continues to be hammered by bad news. On Friday, a new documentary, “Elon Musk’s Crash Course,” premiered which examines Musk’s response to car crashes allegedly caused by Tesla’s cars’ Autopilot feature not working properly.
On the same day, Musk said on Twitter, without referencing the Insider story or the documentary, that he was building a “hardcore litigation department” at Tesla that will report directly to him. He was looking for aggressive candidates who would not back down.
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