Electric carmaker Tesla’s share price fell almost 9% Thursday morning after the company released a poor third-quarter report and CEO Elon Musk expressed pessimism about the global economy—a development that cut Musk’s net worth by about $24 billion.
- Musk—who owns about 21% of Tesla, which accounts for 68% of his wealth—saw his net worth plummet almost 10% Thursday morning along with the company’s share price drop.
- Tesla reported $19.6 billion in revenue for the third quarter Wednesday, down from Q2 when it reported about $21.3 billion.
- The automaker also reported earnings of 66 cents per share, down from Q2 when it reported 91 cents per share.
- Both these metrics fell short of investor expectations, according to FactSet, which forecast the company would bring in $24.2 billion in revenue and 72 cents per share in earnings.
- However, analysts say most of the blame for the price drop is on Musk’s recent statements about the broader global economy during an earnings call where he lamented that “interest costs in the U.S. have risen substantially” and described the current market as “a challenging economic environment” while explaining the need for the company to lower prices and tempering early expectations for the new Cybertruck product.
We estimate Musk’s net worth to now be $232.2 billion. He is still the wealthiest person on Earth.
Analysts with Bernstein wrote in a Thursday morning note that while the earnings report wasn’t good, the “commentary on its earnings call was even more concerning.” Analysts with Wedbush on Thursday called Tesla’s earnings call a “mini disaster” where Wall Street “wanted to get their arms around the falling margins and constant price cuts seen globally,” but instead heard “a much more cautious Musk which focused on a higher interest rates, FSD/AI (full self-driving/artificial intelligence) investments, and highlighting the difficult path for Cybertruck production over the next 12 to 18 months.”
After seeing huge gains throughout the early days of the Covid-19 pandemic—Tesla’s share price rose more than 1,300% between March 2020 and November 2021, peaking at $410—the company has seen several ups and downs in the two years since. 2022 saw the share price fall 65% to just above $100 during a broader market downturn, but in 2023 it saw a partial rebound that brought the stock price up 130%. The share price is now around $221.
$695.7 billion. That’s Tesla’s market capitalization, making it the eighth-largest company in the world by market capitalization, according to Motley Fool.
The median net worth for families in the U.S. was $192,900 in 2022, according to the Federal Reserve’s most recent data released Wednesday. That means Musk lost the combined net worth of about 124,000 American households in one day.