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Business News/ Companies / People/  Elon Musk’s wealth slumps $20.3 billion as Tesla shares tumble; narrows gap between world’s two richest people
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Elon Musk’s wealth slumps $20.3 billion as Tesla shares tumble; narrows gap between world’s two richest people

Elon Musk's wealth dropped by $20.3 billion as Tesla warned of more price cuts, narrowing the wealth gap between him and Bernard Arnault.

The drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index (Image: Reuters)Premium
The drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index (Image: Reuters)

Elon Musk’s wealth slumped $20.3 billion on Thursday after Tesla Inc. warned that it may have to keep cutting the prices of its electric vehicles, sending its shares tumbling.

This drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index. Moreover, it further narrows the wealth gap between Musk and Bernard Arnault, the world’s two richest people. 

However, after the slump, Musk’s fortune still exceeds that of Arnault by about $33 billion. Arnault is the chairman of luxury goods maker LVMH.

Earlier in June, Elon Musk crossed Bernard and became the world's richest person after shares of LVMH fell 2.6 percent in Paris trading. Musk and Arnault have been neck-and-neck for the top spot this year in the Bloomberg Billionaires Index.

Also read: Global markets update: Tesla, Netflix drag down S&P 500 and Nasdaq

Meanwhile, Musk wasn’t the only US technology billionaire having a tough day. Amazon.com Inc.’s Jeff Bezos, Oracle Corp.’s Larry Ellison, former Microsoft Corp. CEO Steve Ballmer, Meta Platforms Inc.’s Mark Zuckerberg and Alphabet Inc. co-founders Larry Page and Sergey Brin too shed a collective $20.8 billion in net worth as the tech-heavy Nasdaq 100 fell 2.3 percent. Shares of Austin-based Tesla slid 9.7% to $262.90 in New York, the most since April 20, after the company warned of more hits to its already-shrinking profitability. Months of markdowns have taken a toll on automotive gross margin, which fell to a four-year low in the second quarter. 

Musk said that Tesla will have to keep lowering the prices of its electric vehicles if interest rates continue to rise. Months of markdowns have already taken a toll on automotive gross margin, which fell to a four-year low in the second quarter.

Musk, 52, derives his wealth primarily from his stake in the EV manufacturer, as well as his holdings in Space Exploration Technologies and Twitter. His wealth had increased about $118 billion this year through Wednesday, as shares of Tesla climbed 136%.

Arnault, 74, has seen his net worth rise by $39 billion this year to $201.2 billion. Shares of Paris-based LVMH have gained 26% in 2023.

(With inputs from Bloomberg)

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Published: 21 Jul 2023, 06:31 AM IST
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