Elon Musk’s fortune is coming back down to Earth, since after an epic six-day rally, Tesla shares tumbled 17% Wednesday, the most in eight years, cutting the chief executive officer’s fortune by $5.9 billion, Bloomberg reported.
The stock had surged to a record close of $887.06 a day earlier, rocketing Musk to No. 20 on the Bloomberg Billionaires Index, just past John and Jacqueline Badger Mars, the owners of candy-maker Mars Inc.
Musk, 48, ended the day at No. 25 on the ranking with a net worth of $39.3 billion, Bloomberg adds.
Even before the plunge, investors and analysts had said Tesla’s market value had become unmoored from the fundamentals. They include Steve Eisman, the investor made famous by betting against subprime mortgages ahead of the 2008 financial crisis, who said in a Bloomberg Television interview that the run-up in the company’s stock was inexplicable and “has cult-like aspects to it”.
Canaccord Genuity cut its rating on the stock to hold, expressing concern that the spread of a fatal coronavirus could slow production at Tesla’s Shanghai plant.
Tesla shares, which traded below $200 as recently as June, took off in earnest in October, when the electric-vehicle maker posted a surprise third-quarter profit. Then it charged higher last month after reporting stronger-than-expected fourth-quarter results and accelerating the timetable for the release of its new Model Y crossover SUV.