Skip to content

Tesla Shares Plunge 10% As Musk’s Net Worth Takes A $20 Billion Hit

Earnings beat fails to impress investors amid production warning and lack of margin clarity.

Tesla, Inc. (NASDAQ:TSLA) shares slumped nearly 10% Thursday following the electric vehicle pioneer’s earnings.

What Happened: The Tesla stock plunge wiped off roughly $90 billion off the company’s market capitalization. The negative reaction was despite the second-quarter top- and bottom-line exceeding expectations.

Analysts blamed the predicament on a big increase in the “other income” component that boosted results, a production warning issued for the third quarter, CEO Elon Musk’s hint at more price cuts, and a lack of clarity on the margin outlook.

Musk’s personal fortunes also took a tumble following the stock drop. According to Bloomberg’s Billionaires Index, the billionaire’s net worth fell by $20.3 billion to $234 billion based on the closing price of the stock on Thursday.

Notwithstanding the drop, Musk is still the world’s richest person. He is ahead of the second ranker Bernard Arnault, who runs the French luxury retailer LVMH, by about $33 billion.

Why It’s Important: Tesla is Musk’s flagship business, and he also runs other companies, such as SpaceX and the Boring Company, while also owning social-media platform Twitter. Much of his fortunes are tied to his ownership stakes, primarily in SpaceX and Tesla.

After plunging about 65% in 2022, Tesla stock took a turn for the better this year as a series of price cuts and copious discounts kept volume growth going amid a still uncertain economic environment.

The inside of a Tesla Model S, the newest model of the S series of the American multinational automotive and clean energy company, equipped to work as a police car with vehicle registration plate fast reading and detection, exhibited during the Mobile World Congress 2023 on March 11, 2023, in Barcelona, Spain. PHOTO BY JOAN CROS/GETTY IMAGES 

The company is also contending with competition in several geographies. Tesla bulls point to a promising future as multiple cogs in Tesla’s wheels begin to work in unison, and the sum-of-the-parts story plays out.


Produced in association with Benzinga

“What’s the latest with Florida Man?”

Get news, handpicked just for you, in your box.

Check out our free email newsletters

Recommended from our partners