As the world’s richest man, Tesla CEO Elon Musk has lost his crown after a dramatic correction in Bitcoin and a slump in the stock of his business that some experts say is correlated.
Tesla stock (TSLA) declined 21 percent from its high of $890 on January 26, accelerating those losses to $698 in a plunge over the past two days. On Tuesday, February 23, the stock’s worst day since early September, shares of the electric vehicle manufacturer dipped as much as 13 percent.
Fox Business blamed the price decline this week on the connection of the firm with Bitcoin, citing analyst Dan Ives of Wedbush, who also noted that he thinks the move was a long-term strategic one.
“Investors are starting to tie Bitcoin and Tesla at the hip. While Tesla on paper made roughly a $1 billion on Bitcoin in a month that exceeded all its EV profits from 2020, the recent 48 hour sell off in Bitcoin and added volatility has driven some investors to the exits on this name in the near-term,”
On February 8, when the news was made that it had bought $1.5B in Bitcoin, Tesla shares traded at about $865. According to Yahoo Finance, it bottomed out on February 23 at $681. Reports of quality management problems in China, however, may also have influenced the price.
According to cointelegraph.com, Tesla holds an estimated 48,000 BTC, which means that by the time the asset had reached its all-time high of a little over $58,000 on February 21, paper profits were in the range of one billion dollars.
The business is also profiting from the Bitcoin acquisition after this week’s price decline, as the asset was valued at a little above $39,000 when the purchase announcement was made.
Musk has been pushed off the top of Bloomberg’s Billionaires Index by the Telsa price crash, with recent losses estimated at $3.56 billion. With an estimated overall net worth of $187 billion, Jeff Bezos tops the list again, while Musk has, according to Bloomberg, $180 billion.