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Tesla Founder Elon Musk” Lost $10 billion From Net Worth In A Day After Sexual Misconduct Claims Emerged

 

Elon Musk’s wealth shrink by $10 billion on Friday as Tesla’s stock down, per Bloomberg.

Tesla’s stock price down after a news that SpaceX settled a sexual misconduct levelled against Musk. An analyst said Tesla’s backers feared “key-man risk” and “perception is reality for [Wall] Street.”

According to Bloomberg Billionaires index, the net worth of Musk was about $212 billion as of Thursday. After news of the allegations broke out on Thursday night, his net worth went down to around $201 billion, the index showed.

According to Insider’s report, SpaceX, the aerospace firm which was founded by Musk, paid the sum of $250,000 as flight attendant to settle a sexual misconduct levelled against Musk in 2018. But Musk has denied the allegation.

However, Musk owns around 47% of SpaceX. Last week, estimates shows that the company 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 circulated, 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 beginning of this year,. According to Bloomberg’s estimate, he is now more than $69 billion poorer year-to-date. That’s partly because Tesla’s stock price was down despite 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 can the damages caused by one person could negatively impact a whole 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 the time Musk announced that he would takeover 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.

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