Elon Musk’s fortune slumped $20.3 billion Thursday after Tesla Inc. warned that it may have to keep cutting the prices of its electric vehicles, an announcement that sent shares tumbling.
The drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index and further narrows the wealth gap between Musk and Bernard Arnault, the world’s two richest people. Musk’s fortune still exceeds that of Arnault, chairman of luxury goods maker LVMH, by about $33 billion.
Musk wasn’t the only U.S. 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 shed a collective $20.8 billion in net worth as the tech-heavy Nasdaq 100 fell 2.3%.
Shares of Austin, Texas-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, the company’s CEO, said Wednesday that Tesla will have to keep lowering prices if interest rates continue to rise.
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 by 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.