Elon Musk, the maverick boss of Tesla, is not the world’s richest individual after shares within the electrical automobile firm dropped 8.6% on Monday, wiping $15.2bn (£10.8bn) off his fortune.
Musk, who final month leapfrogged Amazon founder Jeff Bezos to take the title of the world’s wealthiest individual, dropped again into second place with a $183bn estimated fortune behind Bezos’ $186.3bn.
The 8.5% drop in Tesla’s share value on Monday – the sharpest one-day fall since September – was partly fuelled by Musk tweeting that the costs of bitcoin and different cryptocurrencies “do appear excessive”. Tesla’s shares have been down an extra 6% in pre-market buying and selling on Tuesday.
His feedback got here simply two weeks after Tesla purchased $1.5bn of bitcoin, which despatched the value of the cryptocurrency to contemporary highs. Bitcoin, which reached a excessive of $58,000 on Sunday, has since fallen to $47,500 on Tuesday morning. The worth remains to be up greater than 500% over the previous yr.
Replying on Twitter to Peter Schiff, a stockbroker and gold investor, Musk stated: “Cash is simply knowledge that enables us to keep away from the inconvenience of barter. That knowledge, like all knowledge, is topic to latency and error. The system will evolve to that which minimises each. That stated, bitcoin and ethereum [another cryptocurrency] do appear excessive.”
Scottish Mortgage Funding Belief, which is managed by Tesla shareholder Baillie Gifford, was the largest faller on the FTSE 100 on Tuesday, down 11%. Baillie Gifford was the largest faller on the FTSE 250, down 8%.
Musk had final week stated Tesla’s resolution to purchase $1.5bn in bitcoin was an organization resolution not pushed by him. “Tesla’s motion is just not immediately reflective of my opinion,” Musk stated, once more on Twitter.
“Having some bitcoin, which is just a much less dumb type of liquidity than money, is adventurous sufficient for an S&P 500 firm … When fiat [government-issued] forex has adverse actual curiosity, solely a idiot wouldn’t look elsewhere. Bitcoin is nearly as bs [bullshit] as fiat cash. The important thing phrase is ‘nearly’.”
Tesla disclosed the bitcoin holding in a submitting with the US Securities and Trade Fee final month. The corporate stated it had “up to date our funding coverage to offer us with extra flexibility to additional diversify and maximise returns” to permit it to speculate money reserve in “various reserve belongings together with digital belongings”.
It stated that for the reason that resolution was accredited by its audit committee it had “invested an mixture $1.5bn in bitcoin below this coverage and should purchase and maintain digital belongings sometimes or long run”.
Musk has beforehand helped to drive the recognition of cryptocurrencies, together with bitcoin and dogecoin, by often tweeting that he’s a “supporter” of the cryptocurrencies. He has additionally joked that bitcoin is his “safeword”.
Final month, the value of bitcoin soared after Musk stated he was a supporter of the cryptocurrency in an interview carried on Clubhouse, a brand new social media app designed for rich folks. “I do assume at this level bitcoin is an efficient factor,” he stated. “And, so, I’m a supporter of bitcoin. Like I stated, I used to be late to the celebration, however I’m a supporter of bitcoin. And I feel, bitcoin is admittedly on the verge of getting broad acceptance by typical finance folks.”
He has beforehand modified his Twitter biography to “#bitcoin”.
Musk additionally tweeted on Monday that Tesla’s Mannequin Y Normal Vary SUV would nonetheless be accessible “off the menu”, following studies from electrical automobile newsite Electrek that the mannequin had been eliminated as an choice on-line.