Rocket explodes in mid-air, billionaire Elon Musk loses 11.4 billion USD

Billionaire Elon Musk, who is often ranked 1st or 2nd richest person in the world, faces many difficulties as the world economy is in a period of declining growth, while competition in the electric vehicle industry is increasing. The project to conquer space still has many challenges.

In the trading session of April 20, early morning of April 21 (Vietnam time), Tesla shares of billionaire Elon Musk's world's largest electric vehicle (EV) company fell nearly 10%. The company's capitalization evaporated more than 50 billion USD, down to 510 billion USD, down about 60% compared to its peak of more than 1,200 billion USD in early 2022.

Tesla shares fell sharply after the electric carmaker announced its first-quarter 2023 business results. Revenue for the quarter was $23.33 billion, lower than the expected $23.21 billion. Profit fell 24% year-on-year to $2.51 billion (compared to $3.32 billion in the first quarter of 2022).

Billionaire Elon Musk's fortune evaporated by $11.4 billion (6.17%) in the April 20 trading session, down to $173.6 billion. Elon Musk is currently the second richest person in the world after French luxury goods king Bernard Arnault.

Shares of the electric carmaker were also hit after Tesla CEO Elon Musk said the “uncertain” macroeconomic environment could impact his car buying plans in the near future.

*Tesla shares fell nearly 10% in the session on April 20. (Source: CNBC)*

Billionaire Elon Musk believes the next 12 months will be “stormy” for the economy. He warns that every time the US Federal Reserve (Fed) raises interest rates, it is equivalent to raising the price of cars. And whenever there is economic uncertainty, people often postpone “new major purchases like a new car.”

Recently, Tesla has continuously reduced the price of electric cars and accepted to sell at a loss to maintain/capture market share in the early days of the electric car industry.

Tesla shares fell sharply in the early morning trading session on April 21, while Elon Musk's SpaceX's Starship rocket, designed to carry 100 astronauts, exploded in mid-air minutes after leaving the launch pad. This was a historic test after the decision to postpone the launch earlier this week due to a pressurization problem.

While the test was said to have been a success, “helping improve Starship’s reliability as SpaceX looks to create life on multiple planets,” it shows that billionaire Elon Musk’s businesses are facing many difficulties in 2023.

*Elon Musk's SpaceX's Starship, the world's largest rocket, exploded in mid-air minutes after leaving the launch pad on April 20. (Photo: WSJ)*

Tesla has cut the starting price of its Model Y by 29%, just over three months after the world’s largest electric carmaker saw its profit growth slow significantly as borrowing costs rose and many automakers around the world launched competing models.

Tesla's sharp drop in shares contributed to the US stock market closing in red on April 20 (early morning of April 21, Vietnam time).

The Nasdaq Composite technology index fell 0.8% to nearly 12,060. The Dow Jones Industrial Average lost 110 points, or 0.33%. The broad S&P 500 index lost 0.6%.

Crude oil prices fell more than 2%, causing many energy stocks to decline, such as Exxon Mobil, Chevron...

Elon Musk co-founded six companies, including electric car maker Tesla, rocket maker SpaceX and tunneling company The Boring Company.

The American billionaire owns about 23% of Tesla's shares, but has pledged more than half as collateral for loans.

SpaceX, founded in 2002, was valued at $127 billion after a funding round in May 2022. Its value has quadrupled in three years.

Meanwhile, the Boring Company raised $675 million in April 2022 at a valuation of $5.7 billion.

Also in April 2022, Twitter's board agreed to sell the company to Musk for $44 billion, after Elon Musk disclosed a 9.1% stake and threatened a hostile takeover.

The deal closes in October 2022 and Musk now owns about 74% of the company.

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