On Tuesday, Tesla shares saw a notable decline in response to the company’s disappointing first-quarter delivery figures. The 5% drop in the stock price had significant implications for CEO Elon Musk’s stake in the company, leading to a substantial reduction in its overall value.
Elon Musk, a prominent figure in the tech and automotive industries, holds a considerable number of Tesla shares, totaling approximately 411 million. At Monday’s closing price of $175.22 per share, Musk’s stake was valued at roughly $72 billion. However, with the stock price falling to $166.45 on Tuesday, the value of his stake decreased to around $68.4 billion, reflecting a notable decline of $3.6 billion.
In addition to his direct stock holdings, Musk holds a substantial number of stock options, amounting to approximately 303 million, with a strike price of about $26 per share. These stock options are part of Musk’s 2018 compensation package and represent a significant portion of his overall wealth. On Monday, these options were valued at just over $45 billion, but following Tuesday’s stock drop, their value decreased to $42.5 billion, resulting in a decline of $2.5 billion.
The combined effect of the decline in Tesla’s stock price and the devaluation of Musk’s stock options led to an overall decrease of approximately $6.1 billion in his Tesla stake on Tuesday. Despite this setback, Musk remains one of the wealthiest individuals globally, ranking third on the Bloomberg Billionaires Index with a net worth of $189 billion as of April 1.
Tesla’s disappointing first-quarter delivery figures underscored challenges facing the company, including a decline in vehicle deliveries to 386,810 units, down nearly 9% from the year-ago quarter. This drop, the most significant in Tesla’s history, fell short of analysts’ expectations, who had anticipated deliveries of about 425,000 vehicles.
Wedbush Securities analyst Dan Ives described the first-quarter performance as “an unmitigated disaster,” highlighting its significance in the Tesla narrative. He emphasized the importance of Musk’s leadership in addressing these challenges and regaining investor confidence.
Despite facing increased competition from Chinese electric vehicle manufacturers and concerns about inventory levels, Ives maintained his bullish outlook on Tesla stock. He cited the potential for Musk to navigate the company through these challenges, underscoring the importance of Musk’s leadership in steering Tesla towards a positive trajectory in the coming quarters.