Elon Musk's fortune has shrunk by an estimated $350 billion in less than a week as a sharp selloff in SpaceX shares erased nearly $1 trillion from the company's market value, raising fresh questions about the sustainability of its post-IPO rally.
Musk's net worth has fallen to around $1.1 trillion, according to market estimates, after SpaceX stock extended its losing streak to a third straight session on Monday. The stock plunged 16%, taking its cumulative decline from its June 16 peak to more than 30%.
The decline comes after a euphoric start to trading that briefly pushed SpaceX's market cap to nearly $3 trillion, making it the world's fourth-most valuable listed company ahead of Amazon and Microsoft.
The company is now valued at around $2 trillion, placing it seventh globally behind Taiwan Semiconductor Manufacturing Co (TSMC). Since its peak, SpaceX has lost roughly $928 billion in market value.
Musk owns about 38% of SpaceX, including 4.8 billion shares and stock options, making the slide particularly painful for the billionaire entrepreneur.
The selloff has been driven by growing investor concerns over SpaceX's lofty valuation, heavy cash burn and rising debt as the company accelerates investments in artificial intelligence. While investors initially rewarded the company for its dominant position in space launches, Starlink satellite services and AI ambitions, attention has now shifted to the execution risks associated with those investments.
Broader weakness in technology stocks has added to the pressure. The Nasdaq 100 was on track to erase more than $1 trillion in market value on Tuesday as chipmakers and large-cap technology stocks declined sharply.
Investor sentiment also weakened after MSCI reportedly assigned SpaceX a CCC ESG rating, the lowest on its seven-tier sustainability scale. The index provider said the company was lagging peers because of its exposure to and management of significant environmental, social and governance risks.
Adding to concerns, SpaceX disclosed on Monday that it plans to issue bonds to refinance a short-term loan, opting to raise debt rather than dilute existing shareholders through another equity sale.
The correction marks a dramatic reversal from the stock's blockbuster debut. SpaceX had surged nearly 67% above its IPO price of $135, briefly touching around $225 per share, as investors rushed to gain exposure to Musk's businesses spanning rockets, satellite communications and artificial intelligence.
Despite the recent correction, SpaceX remains one of the world's most valuable listed companies and is expected to join the Nasdaq-100 index in the coming weeks, a move that could attract fresh demand from passive funds and exchange-traded funds tracking the benchmark.
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