In late October 2021, Tesla’s market capitalisation reached US$1 trillion for the first time, making CEO Elon Musk the first ever person worth US$300 billion or more. On Tuesday, the electric vehicle maker’s equity valuation dipped below US$500 billion in mid-day trading for the first time since November 2020, before rebounding to hover slightly above that mark.
Tesla shares, which fell as much as 6.5% Tuesday, were down 4% as of 2 p.m. ET, shaving another US$4.6 billion off the fortune of Elon Musk, who was worth an estimated US$176.7 billion at the time–nearly US$12 billion less than French luxury conglomerate LVMH’s Bernard Arnault, the world’s richest person since last week. Arnault is currently worth just under US$189 billion. Arnault passed Musk for the first time last Wednesday, December 7, and the two traded spots in the days that followed. The Frenchman may now be pulling away.
“There’s no major [Tesla-specific] news out today,” says CFRA analyst Garrett Nelson. “The company just can’t catch a break in terms of investor sentiment. There’s a growing recognition that the sooner Elon Musk assumes a chairman role at Twitter and appoints someone to take over the day-to-day operations, the better off TSLA investors will be.”
The drop in Tesla’s stock price Tuesday followed a positive CPI report that showed inflation eased in November, sending the broader market upwards. As of 2 p.m., the tech-heavy Nasdaq was up nearly 1%. Tesla’s latest “milestone”, meanwhile, was the culmination of a year-long decline, with its stock down more than 50% in 2022–almost all of that since Musk announced his US$44 billion Twitter takeover in mid-April. While the company’s results have been hampered by supply chain issues, particularly in China, the distraction of Musk’s Twitter takeover has been top of mind for investors.
“Musk has gone from a superhero [for] Tesla’s stock to a villain in the eyes of the Street as the overhang grows with each tweet,” says Wedbush analyst Dan Ives. “The Twitter circus show has hurt the Musk brand and it’s a major overhang on Tesla’s stock. Musk is Tesla and Tesla is Musk.”