Despite remaining the world's richest person, Elon Musk has lost his trillionaire status amid heightened volatility in SpaceX shares. After reaching a peak of $225.64 from its IPO price of $135, SpaceX shares have now declined around 30%, data showed.
With this, Musk's current net worth stands at $946 billion, registering a decline of $11.5 billion in the last 24 hours, according to Bloomberg's Billionaire Index data.
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SpaceX made a strong debut on Nasdaq on June 12, with its shares rising 19% in the first trading session. The listing drew heavy interest from retail investors, with net buying reaching $117.6 million on the debut day, the highest ever recorded for a newly listed stock, Reuters reported.
Through this initial public offering (IPO), Musk emerged as the biggest winner as he owns 42% of the company. Days before the IPO, his net worth already stood at around $700 billion. The IPO debut valued the rocket and satellite giant at more than $1.77 trillion. The listing instantly propelled Musk's paper fortune past the $1 trillion mark. By 16 June, surging investor enthusiasm drove SpaceX shares to a peak of $225.64, pushing Musk's total net worth to a peak of $1.32 trillion.
Why Musk Lost Trillionaire Status?
However, the share price has fallen from its early highs. The recent fall in SpaceX shares suggests that the excitement following its market debut has eased. Now, investors are becoming more cautious about potential amid concerns about technology stocks. This has been mainly fuelled by growing doubts over the long-term profitability of artificial intelligence.
On June 22, a sharp 16% fall in SpaceX shares wiped out an estimated $240 billion from Elon Musk's personal wealth, according to BBC. A day later, shares of Tesla dropped nearly 6%, adding to the losses. Despite a $11.5 billion decline in the last 24 hours, his wealth has increased by $326 billion so far this year and he remains the richest person.
However, as much of Musk's fortune is tied to a few companies, his wealth remains highly sensitive to market swings. This could be seen in the days ahead as SpaceX may witness further volatility.
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According to Peter Hillerberg of Ortex Technologies, the stock is facing selling pressure, but its limited number of publicly traded shares could create conditions for a short squeeze. If the share price rises unexpectedly, short sellers may be forced to buy back shares quickly, pushing the stock higher, he explained to Reuters.
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