Elon Musk’s spell as the world’s first ever trillionaire lasted less than two weeks, after a sharp sell-off in SpaceX and Tesla shares saw his fortune drop.
Earlier this month, Musk’s wealth hit 13-figures thanks to the SpaceX IPO. When the company was floated on the stock market, there was huge investor excitement, pushing its value above $2 trillion and taking Musk’s wealth to $1.1 trillion.
But it hasn’t taken long for the hype around SpaceX to fade.
In the last week, the company’s share price has dropped dramatically. From a peak valuation of $3 trillion, its market capitalisation has not fallen to just over $2 trillion.
As a result, Musk’s reign as a trillionaire is over, whose net worth now sits at around $957bn, according to the Bloomberg Billionaires Index.
Dannie Hewson, AJ Bell’s head of financial analysis, said the SpaceX sell-off shows how newly listed companies often experience a period of intense volatility after the initial excitement fades.
“SpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it’s come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut,” she said.
“Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.
“For a stock like SpaceX, a lot of decision-making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved.”
At the same time as SpaceX’s valuation dropping by almost the equivalent of Musk’s entire fortune, Tesla also experienced a drop.
On Monday, the electric car company fell 5.8% as investors sold off artificial intelligence and semiconductor-related stocks, the Independent reports.