Elon Musk’s net worth is in free fall, with the world’s richest person losing his trillionaire status as shares of Tesla (NASDAQ:TSLA) and SpaceX (NASDAQ:SPCX) continue to decline. The prolonged weakness in the two companies has erased hundreds of billions of dollars from his fortune, pushing it well below its peak earlier this year.
Elon Musk’s Net Worth Has Plunged Recently
Bloomberg data shows that Musk’s net worth has slumped to $792 billion from a high of $1.32 trillion last month. He is still the world’s richest person by far, with his wealth being higher than the next two billionaires combined. Google’s Larry Page and Sergey Brin are worth $297 billion and $276 billion, combined.
Most of Musk’s wealth is tied to SpaceX and Tesla, with the rest being in private companies like The Boring Company and Neuralink. Neuralink raised money at a $9 billion valuation last year, while The Boring Company is valued at $5.6 billion.
Tesla stock is stuck in a bear market after falling by 23% from its highest point this year. SpaceX, which went public last month, has plunged to a record low, erasing over $1 trillion in value. This sell-off continued on Friday after aborting its launch following an engine failure.
SpaceX’s bond yields have jumped and are moving towards junk status. A $100 million allocation in its 2056 bonds would be worth about $90 million today.
Tesla and SpaceX are Facing Major Challenges
Elon Musk’s companies are facing some major challenges. While Tesla’s deliveries jumped in the second quarter, it is navigating a more difficult market as competition in key markets like China and Europe soars.
SpaceX is also navigating a tough market in key industries. For example, its AI business is seeing elevated costs as memory, semiconductor, and server prices jump. Grok, its key product, has struggled to gain market share, with ChatGPT and Claude being the market leaders.
SpaceX is also facing substantial competition in the satellite launching business, with Rocket Lab, Firefly Aerospace, and Blue Origin gaining market share. It is also burning billions of dollars in cash.
Most importantly, the two companies are highly valued, with Tesla having a forward price-to-earnings ratio of 178. SpaceX trades at a forward price-to-sales ratio of 41, higher than many companies.
The next key drivers for SpaceX and Tesla stocks will be their earnings, which will provide more information about their performance. Tesla’s earnings will come out on Wednesday, while SpaceX is expected to release its numbers in August.
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