Tesla stock surged over 700% in 2020, causing billions in additional compensation for Musk under the terms of his stock-based compensation plan. For most of the pandemic, as well as in the years leading up to it, tech stocks outperformed the rest of the economy, and now it seems the stock market bubble has begun to deflate.
Eccentric entrepreneur and SpaceX CEO Elon Musk’s fortune has plummeted by $27 billion in a week, as Tesla’s stock price has fallen significantly, eroding the billionaire’s net worth, Bloomberg Billionaires Index showed on Sunday.
According to the data, Musk, was worth $157 billion after markets closed on Friday, a 15% drop in his net worth from the start of the week. Musk is now comfortably in second place in the list of world’s richest men again, about $20 billion behind Amazon’s Jeff Bezos, after a months-long fight for the title.
It comes after a sharp drop in the tech sector, with Tesla shares taking the brunt of the downturn, falling by nearly a third from their all-time high in January.
On the last day of trading, Friday, Tesla, was the S&P 500’s heaviest dragging stock on Friday, with its value falling 3.8%, bringing its total current losses to 15.3%.
Analysts have long predicted a tech bubble, fuelled in part by a flood of cash from small investors, with Tesla shares being highlighted as potentially overvalued.
The electric carmaker’s Model 3 line in Fremont, California, was reportedly forced to shut down for two weeks due to a shortage of critical computer chips.
Meanwhile, Musk said on Saturday that Tesla will most likely confirm a second-quarter delivery date for its much-anticipated Cybertruck.
According to the company’s production statistics and sales data, Tesla was a little short of the mark of half a million cars delivered in 2020, although the carmaker delivered a total of 180,870 vehicles in Q4, which is a quarterly record.
While Tesla increased total deliveries, the average sales price per vehicle fell 11% year over year, as more customers switched to the less expensive Model 3 and Model Y, according to the company’s earnings page.