Tesla founder and CEO Elon Musk lost $10 billion in just a single day after claims of sexual misconduct against him emerged.
He was worth about $212 billion on Thursday, according to the Bloomberg Billionaires Index. After news of the allegations broke on Thursday night, his wealth fell to around $201 billion, the index showed.
According to Insider’s report, SpaceX, the aerospace firm founded by Musk, paid a flight attendant $250,000 to settle a sexual misconduct claim against Musk in 2018. Musk has denied the claim.
Musk owns around 47% of SpaceX. Last week, the company was estimated to have reached a $125 billion valuation. But it’s a privately-held company, and as such, its valuation doesn’t change much from day to day.
Tesla’s stock performance in public markets has the most significant impact on Musk’s wealth. Musk owns about 15% of the company, per BBC. After news of the allegations emerged, Tesla’s share price tanked 6.4%.
But Musk’s sexual misconduct news and related financial fallout is just the latest incident in a protracted wealth decline since the start of this year. Per Bloomberg’s estimate, he is now more than $69 billion poorer year-to-date. That’s partly because Tesla’s stock price was pulled down amid a global stock-market selloff as investors worried about the health of the global economy.
But it’s also likely that Tesla’s investors were thinking about “key-man risk,” or how the damages faced by one individual could negatively impact an entire organization. “The distraction risks for Musk (perception is reality) are hard to ignore,” Wedbush analyst Dan Ives tweeted on Thursday, referring to Musk’s split attention on Tesla and his upcoming Twitter acquisition.
The fall in Tesla’s stock price has picked up pace since Musk announced that he would take Twitter private for $44 billion in April. A day after that announcement, Tesla’s stock plummeted more than 12%, as shareholders wondered how he would finance his Twitter takeover, Insider reported.
Last week alone, the carmaker’s stock was down 14%, wiping out about $110 billion from its market valuation, Bloomberg reported. “As long as the Twitter deal is out there, and as long as Tesla’s stock is falling, people worry that Musk will have to sell more stock and would get distracted and not pay as much attention to Tesla as he should,” Gary Black, founder and managing partner at the actively-managed ETF Future Fund LLC, told Bloomberg.
Musk is likely to see his wealth shrink further as Tesla continues to get hammered by bad news. On Friday, a new documentary, “Elon Musk’s Crash Course,” premiered, which looks at Musk’s response to car crashes that were allegedly caused by the autopilot function in Tesla’s cars not operating correctly.
On the same day, Musk said on Twitter, without referring to Insider’s story or the documentary, that he was building a “hardcore litigation department” at Tesla that will report directly to him. He was looking for candidates who were aggressive and would not back down.
“There will be blood,” he tweeted.