Investors recently dumped shares of SpaceX, causing a significant drop in Elon Musk’s personal wealth. On Thursday (July 16), the world witnessed the only publicly known trillionaire’s fortune shrinking dramatically.
According to the latest data from the Bloomberg Billionaires Index on Thursday, Musk, the only publicly known individual with a thirteen-digit fortune (even if it’s only on paper), saw his net worth decrease to $833 billion on Thursday. This figure represents a significant decline from the historic high reached after SpaceX’s initial public offering (IPO).
Nevertheless, Musk’s wealth still exceeds that of Larry Page, the co-founder of Google, who ranks second on the global rich list with a net worth of $316 billion, more than double that of Musk.
Market data showed that SpaceX’s stock closed at $131 on Thursday, falling below the IPO price of $135 per share. It hit a low of around $124 per share during trading, marking a 43% drop from its peak of $230.
For Musk to reclaim the “trillionaire status,” he would need to earn roughly $167 billion, a task largely dependent on whether SpaceX’s plummeting stock can rebound.
Adding to Musk’s woes, the stock price of another of his publicly traded companies, the electric vehicle giant Tesla, has also been under pressure, dropping nearly 6% in the past five days and over 11% year-to-date.
However, SpaceX’s current market value stands at around $1.8 trillion, surpassing Tesla’s $1.5 trillion. Additionally, Musk’s ownership stake in SpaceX (approximately 42%) is higher than in Tesla (between 12% to 20%).
According to recent analysis cited by the BBC, the declines in SpaceX and Tesla stocks are linked to concerns over high investments in the artificial intelligence (AI) sector, contributing to a broader sell-off in the tech sector.
During the IPO stage, many analysts had questioned the valuation of SpaceX, especially the extent to which it relies on AI assets – an intensely competitive field with strong rivals like OpenAI, Anthropic, and Google.
Furthermore, Musk’s orbital data center plan, currently in the planning stages and unverified, is seen as a potential risk factor.
Despite a net increase of nearly $250 billion in Musk’s wealth this year, analysts warn that as lock-up restrictions continue to expire in the coming months, prolonged low stock prices could exert greater pressure on SpaceX’s share prices and the liquidity prospects for employees and early investors.
SpaceX’s IPO lock-up period is structured in staggered segments rather than the traditional unified 6-month lock-up period. As more shares become unrestricted for trading, the stock price is expected to face downward pressure.
Of note, directly allocated shares, representing 5% of IPO shares available for purchase by selected employees and individuals, are exempt from lock-up restrictions.
For frontline employees and early investors, the first unlock is expected to occur on the second trading day after the announcement of Q2 earnings (estimated by analysts around early August), releasing 20% of eligible shares (approximately 9.115 billion shares) for sale.
Other unlock events include price incentive unlocks: an additional 10% will be unlocked if SpaceX’s stock price remains above 30% of the IPO price for five consecutive trading days.
Gradual maturity unlocks: 7% will be unlocked on the 70th, 90th, 105th, 120th, and 135th days post-IPO, and an additional 28% will be unlocked after the announcement of Q3 earnings.
Musk’s holdings: CEO Musk and other major investors are subject to a strict 366-day lock-up period, with their holdings remaining restricted until mid-2027.