Elon Musk saw more than $11 billion (£9 billion) wiped off his net worth as Tesla shares plunged by 10% following disappointing financial results yesterday.
Following market close on Wednesday, Tesla reported its first ever annual profit decline. Earnings per share fell by 23% for the year as revenue came in below expectations.
Kathleen Brooks, research director at XTB, said: “Tesla missed earnings estimates yet again in Q4. Its adjusted EPS came in at $0.71, vs. $0.73 expected. A weaker quarter for earnings growth was expected by analysts, however, the revenue miss was a shock.”
A disappointing future outlook, mostly based on sales for a new smaller model, also worried investors.
Brooks said: “The key paragraph in the earnings report was in the outlook. The company claims that it is between two growth waves, the first one was the expansion of the model 3/Y platform, which they claim was the world’s bestselling car in 2023. The next wave is the expansion of the next generation vehicle platform that will be produced in Texas. There was no mention of timings for these next generation vehicles, instead Tesla said that they would deliver fewer vehicles next year, as they concentrate on building their new platform. Shockingly, the earnings report stated that Tesla could see the growth rate in revenue and deployment in its energy storage business outpace the automotive business.”
As markets opened in the US, Tesla shares tumbled by as much as 12.3% to $182.21.
That suggests a decline of about $88 billion in Tesla’s market value.
Tesla’s confrontational boss Elon Musk owns more than one-eighth of the company’s shares, meaning the value of his holding plunged by about $11.3 billion.
Musk still remains the world’s richest person, however, with a fortune of more than $200 billion, according to Bloomberg.
At one stage, Musk's net worth was $340 billion, but it has declined as investor excitement about Tesla cooled, while the value of social media platform X, known as Twitter before Musk bought it, is believed to have plunged from the $44bn purchase price Musk paid for it.
One of Musk’s biggest rival for the global rich list crown, Bernard Arnault, could see a big swing in his own fortune as his luxury empire LVMH is set to report its financial results today after European markets close.
Arnault, whose net worth has briefly overtaken Musk’s at points within the last two years but is currently considered to be the third-richest person in the world behind both Musk and Jeff Bezos, is worth $165 billion according to Bloomberg.
