Elon Musk at an event with Chicago mayor Rahm Emanuel in June 2018.2018 Getty Images
Shares of Tesla dropped 9% on Friday after the New York Times published an extensive interview with CEO Elon Musk late the night before. In the article, Musk called the last year “excruciating” and said that short-sellers “will possibly result in Tesla’s destruction.” At times in the story Musk appeared off-kilter; the article cited concern from board members about his use of Ambien, and Musk said that he has recently been working 120-hour weeks.
The decline in Tesla’s stock reduced Musk’s net worth by nearly $1 billion.
The sell-off came amid a turbulent two-week stretch for Musk, which began with a tweet he sent on August 7 suggesting that he might take Tesla private. “Funding secured,” he added.
That tweet sent investors into a tizzy, and Tesla’s stock ended the day with a 10% gain. Musk did not immediately explain whether he would execute the transaction, however, or who would provide the funding. The Securities and Exchange Commission is reportedly investigating the matter and has already subpoenaed Musk and other Tesla officials.
In Thursday’s interview, Musk admitted that the deal was far from shored up. He said he was referring to possible financial backing from Saudi Arabia’s sovereign wealth fund, whose representatives have reportedly visited with Musk in the past to discuss making an investment. But the Times reported that “the Saudi fund had not committed to provide any cash.”
Following Friday’s decline, Musk is worth an estimated $19.6 billion, according to Forbes’ real-time billionaire rankings. He is the 50th richest person in the world. About half of his fortune comes from his roughly 20% stake in Tesla. Virtually all of the rest derives from his majority stake in rocket maker SpaceX, which raised funds this spring at a $25 billion valuation.
Musk has a long track record of entrepreneurial success. He earned his first major payout after selling Zip2, a software firm he cofounded, to Compaq in 1999 for a reported price of more than $300 million. Three years later, Paypal, which he also cofounded, sold to eBay for $1.4 billion.
Musk joined Tesla as a significant investor in 2004 and became CEO in 2008. The business went public two years later at a price of $17 per share. Its stock has since soared 18-fold.
More Info: www.forbes.com