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In a significant turn of events, Elon Musk, the richest person on the planet with a staggering fortune of $209.6 billion, saw his wealth plummet by $16.1 billion on Thursday. The reason behind this financial setback was Tesla Inc.’s disappointing third-quarter earnings report, which sent shockwaves through the market.
Musk’s connection to this financial rollercoaster is primarily through his ownership of 13% of Tesla, from which he derives the majority of his wealth. The EV giant’s shares tumbled by 9.3% in response to its underwhelming performance in both earnings and sales for the quarter.
During a post-earnings release conference call on Wednesday, Elon Musk raised concerns about the impact of high-interest rates on consumer confidence. These rates seemed to have taken a toll on Tesla’s bottom line.
Tesla, a dominant player in the electric vehicle industry, reported its first quarterly decline in sales for the year. They managed to deliver 435,059 vehicles, a number that fell short of expectations. Additionally, the company’s profit margins hit their lowest point in over four years, largely attributed to the repeated price cuts on its vehicles.
Despite these recent challenges, Musk’s overall wealth has surged by over $70 billion in 2023, marking an impressive rebound in Tesla shares. This increase has occurred even as the company faces deteriorating fundamentals.
For a brief moment, Musk had been overtaken as the world’s wealthiest person by LVMH’s Bernard Arnault. However, Musk has once again reclaimed the title by a substantial margin.
Despite the recent hiccups, Tesla remains the most valuable vehicle producer globally. The company has remained determined in its commitment to delivering new vehicles to 1.8 million customers by the year’s end. Their resilience and strong market position have kept investors optimistic.
Furthermore, Tesla continues to maintain its status as an industry leader, and it has announced the imminent delivery of its long-awaited Cybertrucks in November, albeit about two years behind the initial schedule. The electric-vehicle juggernaut’s innovative spirit and focus on sustainable transportation remain at the forefront of the automotive industry, ensuring that it remains a force to be reckoned with despite recent challenges.
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