The world’s richest man, Elon Musk, witnessed a dramatic decline in wealth in October as he lost a whopping $35 billion, mostly as a result of the falling value of his Tesla shares.
According to Forbes, this significant drop in Musk’s wealth had a significant effect on the list of the richest people in the world.
The combined net worth of the world’s ten richest individuals, as of November 1, was an astounding $1.32 trillion but this figure had dropped by nearly $50 billion from only a month prior.
The charismatic Tesla CEO, Elon Musk, who saw a significant decline in his fortune in the month of October, was the catalyst for this downturn.
According to Nasdaq, a number of unfavourable variables and poor market conditions contributed to the fall in Tesla’s stock performance in October.
The electric vehicle manufacturer experienced an almost 20% decline in stock value over the month due to a number of negative events.
Tesla’s third-quarter earnings were below investor forecasts due to low delivery volumes and dismal results overall.
Investor trust was further undermined by these unsatisfactory results. Furthermore, the company’s capital expenditures and operating costs kept rising, which resulted in lower cash flows and diminishing profit margins.
The demand for big-ticket purchases like cars and durable goods has also decreased as a result of rising interest rates and inflationary pressures.
The industry for electric vehicles experienced its own set of difficulties, such as labour strikes and worries about profitability because of high development and manufacturing expenses in the face of fierce price rivalry.
Notably, during this time, the stock values of other significant automakers, like Ford, Rivian, and General Motors, also declined.
However, the climate for consumer discretionary companies was difficult due to Tesla’s large market capitalization, which had a considerable impact on major indexes.
Investors in this industry should expect volatility, particularly if they own companies that are valued aggressively.
In the race for autonomous vehicles, Didi in China and Cruise and Waymo in the United States present serious challenges for Tesla.
Musk said, “We dug our own grave with Cybertruck,” referring to the unconventional cybertruck. He also said that it might take the vehicle 12 to 18 months to start contributing positively to cash flow.
Although Elon Musk suffered a large financial setback, it’s crucial to remember that other billionaires also suffered losses in October.
