New York (Bloomberg): Elon Musk’s fortune is coming back down to Earth.
After an epic six-day rally, Tesla Inc. shares tumbled 17 per cent Wednesday - the most in eight years - and cutting the CEO’s fortune by $5.9 billion. The stock had surged to a record close of $887.06 a day earlier, rocketing Musk to No. 20 on the Bloomberg Billionaires Index.
Musk ended the day at No. 25 on the ranking with a networth of $39.3 billion. He started the year at No. 35.
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 an interview that the run-up in the company’s stock was inexplicable and “has cult-like aspects to it.”
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.