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Elon Musk faced a challenging week as his flagship companies, Tesla and SpaceX, experienced significant setbacks. Tesla shares suffered their worst slump since 2022 following disappointing Q2 earnings, while SpaceX’s stock continued its post-IPO decline amidst repeated delays for its crucial Starship V3 test flight. These financial downturns wiped approximately $130 billion from Musk’s personal wealth, capping a week that also saw him engage in a contentious interview regarding his political affiliations.
It was a profoundly challenging week for billionaire entrepreneur Elon Musk, as both his major ventures, Tesla and SpaceX, experienced significant financial setbacks and operational hurdles.
Tesla, the electric vehicle giant, saw its shares plummet by a staggering 18% during the week, closing at $313.03 on Friday. This marked the automaker's worst weekly slump since 2022. The sharp decline was primarily triggered by weaker-than-expected second-quarter earnings, reported late Wednesday. The company's cash flow turned negative as it ramped up spending on ambitious, futuristic initiatives such as robotaxis, humanoid robots, and a massive chip fabrication plant.
Analysts at Argus Research, who hold a 'hold' rating on Tesla stock, commented in a report: "We expect this to pressure free cash flow and delay earnings growth, without providing any near-term shareholder return. We believe it will be nearly impossible for Tesla to generate any consistency in profit growth in the near-term." Tesla's stock is now down a substantial 30% for the year, making it the weakest performer among tech's mega-cap companies.
Meanwhile, Musk's aerospace company, SpaceX, also faced a downward trajectory. Its stock dropped 7.2% over five days, closing at $115.07 on Friday, the lowest point since its record-setting initial public offering last month. SpaceX shares have been in a steady decline over the past month, falling for four of the last five weeks and now standing approximately 43% below their peak close on June 16.
The combined stock slides erased roughly $130 billion from Elon Musk's personal fortune, a significant blow just weeks after he briefly held the title of the world's first trillionaire. Reflecting on the downturn, Musk humorously posted on X (formerly Twitter) on Friday, "(Former) trillionaire."
Adding to SpaceX's challenges were repeated delays for the 13th test flight of its colossal Starship V3 rocket. This upgraded version of the roughly 400-foot-tall rocket is designed to be fully reusable and is considered pivotal for SpaceX's ambitious plans to expand its Starlink satellite network and eventually facilitate manned missions to the Moon and Mars. The company had to scrub a test flight last week due to a booster issue and delayed the latest attempt planned for Thursday "due to weather," as announced on X. A successful launch of Starship V3 would be the first since the company's IPO and a crucial milestone.
Beyond the financial and operational pressures, Musk also made headlines for a contentious interview with The Economist's editor-in-chief, Zanny Minton Beddoes. During the discussion, Beddoes pressed Musk on his support for "not just the populist right, but the far right, in fact very fringe parties in some countries." Musk, known for his financial and vocal backing of figures like President Donald Trump and involvement in his administration, has also endorsed Germany's extreme anti-immigrant AfD party and the UK's Restore Britain, which advocates for reversing mass migration. Musk vehemently defended his stance, stating, "It's just normal people!" and berating "the traditional media" for what he termed an "absurd characterization of the far right."
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