Elon Musks Drops to 3rd World’s Richest Man as Angry Bitcoin Fans Dump Tesla Shares
Elon Musks Drops to 3rd World’s Richest Man as Angry Bitcoin Fans Dump Tesla Shares
Elon Musk has lost his position as the world's second wealthiest person, according to the Bloomberg Billionaires Index.
Bernard Arnault, president of LVMH, fired Tesla founder Elon Musk after the electric vehicle maker's stock fell 2.2 percent on Monday.
However, the reason for Musk's wealth decline extends beyond Monday's dip. Since hitting a high of $900 in late January, the company's stock has been declining.
Tesla shares are dropping
Tesla's stock has fallen about 24% to around $580, resulting in a loss of about $9.1 billion for the Tesla founder this year, the most among US billionaires.
The reasons for Tesla's continuous decline vary, but the most recent one may be related to the company's recent tweet.
Musk announced on Wednesday, May 12, that the company would suspend the use of bitcoin for vehicle purchases due to concerns about climate change.
Bitcoin's price fell from $54,602 to $52,466 in minutes following his announcement, according to Coindesk. Additionally, it resulted in the erasure of approximately $350 billion from the cryptocurrency market.
Bitcoin Enthusiast are Angry
Angry over Musk's announcement, several Bitcoin investors have taken a stance against him. Some have stated their intention to cancel their Tesla Cybertruck orders, while others have urged investors to short Tesla stock.
Chris Dunn, an investor and founder of a skill incubator, lashed out at Musk, claiming that Musk's claim about Bitcoin's environmental impact is incorrect and disingenuous. “I cannot support someone who promotes altcoins on television to uninformed viewers and then declares bitcoin to be the problem,” he added.
Similarly, Nikita Sachdev, co-founder of Luna Management, advised her followers to sell their Tesla stock and invest in Bitcoin.
They are not alone; several investors have taken to social media to urge people to sell their Tesla stock and cancel their orders for Tesla's cyber-truck. Nikita's tweet alone garnered over 16,000 likes.
This backlash could have had a direct or indirect effect on Tesla's stock price. According to reports, its shares fell 4.42 percent in the subsequent 24 hours.
That's not all; Musk wreaked havoc again over the weekend when he appeared to imply that Tesla may sell or has already sold its Bitcoin holdings. He later clarified in a tweet Monday that while the company had not done so, the damage had been done.
Tesla's stock price had dropped another 2.2 percent.
Following that, according to a regulatory filing, billionaire investor Michael Burry placed a sizable wager against the company.
In summary, Musk's wealth decline was a direct result of Tesla's stock falling 24% from its January high.
The recent decline could be attributed to the backlash against his recent tweets, but the primary reasons are a global semiconductor shortage, increasing competition from traditional automakers and electric vehicle startups, and investor concerns about China's regulatory environment.
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