- The year didn't start out the best for Elon Musk.
- Tesla's valuation has fallen by about $188 billion as investors worry about a slowdown in EV sales.
- Advertisers fled Company X, and SpaceX got into a spat with Ukraine over Russia's use of Starlink terminals.
The year didn't start out the best for Elon Musk.
The world's richest man has faced problems at Tesla, SpaceX, and X, from a collapse in Tesla's valuation to an exodus of X's advertisers.
Here are some of the notable potatoes that Mr. Musk is working on.
Tesla stock price decline
Despite a strong 2023, Tesla shares are down about 23% since the start of the year as investors worry about China's fragile economy and a potential slowdown in global EV sales.
“The market is trying to price in next year's growth and may be assuming that a slowdown in EV sales will lead to a slowdown in Tesla sales,” Morningstar equity strategist Seth Goldstein said last month. Stated. “Tesla is such a high-growth stock that even small downward revisions can have a large impact on the valuation.”
Tesla also lost its position as the world's largest EV maker to China's BYD. To be fair, BYD stock has also fallen about 12% this year.
The drop in Tesla's stock price has wiped out about $188 billion from the company's valuation this year, according to calculations by Business Insider. The stock closed at just under $192, giving it a value of just over $600 billion as of Friday's close.
RothMKM analyst Craig Irwin calls Tesla “significantly overvalued” and has a price target of $85 for the stock.
It's worth noting that the stock price is about the same as this time last year. And even though Tesla's value has more than halved since its peak, the stock is still up nearly 900% over the past five years.
Nevertheless, a wipeout in 2024 puts Tesla's place in the “Magnificent Seven” group of fast-rising Big Tech stocks at risk. Currently, its value is valued by Warren Buffett's Berkshire Hathaway, pharmaceutical giant Eli Lilly, as well as Microsoft, Apple, Nvidia, Alphabet, etc. Amazonmeta.
Musk's own wealth is closely tied to his 21% stake in Tesla, and his personal wealth has declined by about $21 billion this year as a result of the electric car maker's stock market struggles, according to the Bloomberg Billionaires Index. However, before you start feeling too sorry for Mr. Musk, he's still worth his $208 billion.
Shareholders also had to counter a Wall Street Journal report last month that said some executives and board members were concerned about Musk's use of drugs such as LSD, cocaine and ketamine. . He denied those claims.
Delaware salary determination
Adding insult to injury, a Delaware judge also ruled against Musk's $55 billion Tesla compensation package last month.
Musk does not receive a salary for his work as Tesla's CEO. Instead, his salary is tied to the company's growth.
The judgment in Delaware is threaten his title as the richest person in the worldconsidering most of his wealth is tied up in Tesla stock.
Since the ruling, Musk has slammed Delaware as a place to do business and promised to hold a shareholder vote to move the EV maker's incorporation to Texas. And one of his other companies, SpaceX, has reportedly filed to relocate its business entity to the Lone Star State.
Mainstream advertising of X
Musk also has to contend with problems he has caused at social media company X (formerly Twitter), which has been in a seemingly endless state of crisis since taking over the reins in October 2022. There wasn't.
Advertisers withdrew from the platform after Musk stepped up comments widely seen as anti-Semitic in November and then told major sponsors (in a slightly more blunt manner) to get their way. I started.
Ad spending in 2023 will fall 54% to $1.89 billion, according to data from Insider Intelligence, and X will struggle to sell slots to promote trending topics during the Super Bowl. Advertisers left behind on X may be AI “undressing” apps or questionable crypto services, he said, BI previously reported.
In what appears to be an effort to drum up interest from advertisers, Musk sent it to his 173 million followers this week as an X Ads post.
According to Axios, asset manager Fidelity has repeatedly reduced the value of X shares since Musk bought it, and now believes the company is worth 71% less than the $44 billion Musk bought it for. That's what it means. However, the company raised the valuation of its X shares by 11% last month, Axios reported.
Starlink's Struggle
Finally, Musk's SpaceX company has been embroiled in controversy over Russia's alleged use of its Starlink satellite internet terminal.
Ukraine has repeatedly claimed that Russian forces are using Starlink on its territory. Mr. Musk had previously denied the accusations, but Kiev said this week that it was working with SpaceX to disable Russian access.
SpaceX was also forced to postpone Tuesday's launch, again delaying its moon landing efforts.
On Thursday, Houston company Intuitive Machines successfully landed its unmanned lander Odysseus on the moon, becoming the first commercial spacecraft to do so.
