Photo Source, Reuters
Elon Musk became the world’s first richest man in January.
Elon Musk, Tesla’s CEO, came down to second place again a month after becoming the world’s richest man in January due to a plunge in Tesla stock prices.
Tesla’s stock price, which rose to the $880 mark in January, fell more than 10% on the New York Stock Exchange on the 23rd (local time).
However, as the stock price gradually recovered, it closed at $698.84, down 2.19% ($15.66) from the previous day.
This is the biggest decline since September.
It is analyzed that Musk’s recent decision to buy bitcoin on a large scale had a big impact on this decline.
Musk, who showed interest in investing in bitcoin this year, purchased $1.5 billion (about 1,668 trillion won) of bitcoin through Tesla earlier this month.
Meanwhile, due to the plunge in Tesla’s share price, the title of the world’s richest man was returned to Jeff Bezos, CEO of Amazon.
Dan Eves, an analyst at Wedbush Securities in the U.S., analyzed that some Tesla investors are selling their shares due to the sharp decline in bitcoin.
He also pointed out that “Musk and Tesla aggressively bought bitcoin, and investors started to think of bitcoin and Tesla linked together.”
He added, “The bitcoin sell-off and the increase in volatility seen in the last 48 hours are causing some investors to drop out of related stocks in the short term.”
For several weeks after Tesla announced its large-scale purchase of bitcoins, the value of bitcoin soared for the first time in history on the 17th, and then rose to the 58300 dollar level on the 21st.
However, it has since recorded a steep decline, falling close to 20% from the current high and then rebounding.
However, it is still higher than when Tesla purchased it.
Photo Source, Getty Images
Musk is being criticized for triggering a decline in bitcoin by revealing on Twitter on the 20th that the price of bitcoin is “looks expensive”.
The depreciation of Bitcoin was also influenced by US Treasury Secretary Janet Yellen.
He recently stated that “Bitcoin is an extremely inefficient asset to conduct transactions,” and expressed concern over the potential losses investors may suffer.
This is a remark after the price of bitcoin soared as major financial companies such as Mastercard and BNY Mellon announced that they were reviewing cryptocurrencies such as bitcoin as a payment method.
Another reason for the decline in Tesla shares?
Photo Source, Getty Images
For Tesla, China is the second largest market after the United States.
The plunge in Tesla’s stock price is not just the effect of Bitcoin.
Tesla recently stopped selling standard range trim (grade), which is the cheapest of its sports utility vehicle (SUV)’Model Y’.
Musk said it was a decision to improve the rating.
Tesla is said to have received complaints from Chinese regulators earlier this month about a battery fire and abnormal acceleration.
Competitors such as General Motors (GM) and Volkswagen of the United States strengthened their investment in electric vehicles, which also had an impact.
In 2020, Tesla’s stock price soared from the $90 range to the $700 level. Thanks to this, Musk CEO’s net worth increased by more than $150 billion (165 trillion won), surpassing Amazon CEO Jeff Bezos earlier this year, becoming the world’s richest man.
Since then, Musk and Bezos are competing for the world’s number one spot.
However, according to Bloomberg News, Tesla shares plunged more than 8% in the New York Stock Market on the 23rd, the largest since September.
As a result, Musk estimated that about $15 billion (16 trillion won) of net worth evaporated.
Musk has been controversial with tweets related to stock prices several times in the past.
Earlier last year, he tweeted that “Tesla’s stock price is too high,” and was criticized for a decline in Tesla’s market cap of 14 billion dollars (about 17 trillion won).