In less than two weeks… Musk loses the title of the world’s first trillionaire economy

The net worth of American billionaire Elon Musk fell to less than a trillion dollars, after the significant decline in SpaceX shares in recent trading sessions, and the imposition of new restrictions on part of Musk’s stake in the electric car company Tesla, ending a short period during which he held the title of the first trillionaire in history.

Musk had crossed the trillion-dollar barrier after SpaceX was listed on the American Stock Exchange on June 12, bringing his wealth to about $1.1 trillion, before reaching its peak at about $1.45 trillion with the company’s stock rising to record levels in the first trading sessions for the company’s shares, which specializes in artificial intelligence and space rockets.

But SpaceX’s stock has declined by about 31% since its recent highest levels, in addition to excluding restricted shares in Tesla valued at about $116 billion from calculating his wealth, reducing his net worth to about $962 billion, according to Forbes magazine estimates.

Restricted shares

Restricted shares mean that they are a main tool used by the company as part of the compensation and bonus packages for its employees and executives (most notably Elon Musk in his bonus packages). They are called restricted because granting them to the company’s leaders and employees is conditional on a vesting period and not on immediate ownership, and also on conditions related to job performance and other factors.

The new restrictions are due to an agreement that Elon Musk concluded with Tesla last April, converting part of his shares into restricted shares that he cannot retain unless he continues in his executive position at the company until January 2028.

Despite the decline, SpaceX still represents Musk’s largest asset, as he owns about 4.8 billion shares in the company in addition to hundreds of millions of stock options, bringing the value of his total stake to about $796 billion.

Sharp fluctuations

In today’s session at the time of writing this report, SpaceX shares recorded an increase of 1.86% to $159.03, continuing its recovery for the second day in a row after a sharp decline that wiped out more than $600 billion from the company’s market value within three days.

During the session the day before yesterday, Monday, the stock recorded the second largest daily loss in market value in the history of financial markets, after the company lost about $400 billion in one day, a loss exceeded only by the record decline recorded by Nvidia last year.

Despite these losses, SpaceX’s market value is still close to two trillion dollars, making it one of the largest listed companies in the world.

New financing

In parallel, the company succeeded in raising $25 billion through the first bond issuance in its history, weeks after implementing the largest initial public offering in the world with a value of about $86 billion.

SpaceX also signed a multi-billion-dollar agreement to provide computing capabilities to Reflection AI, a startup specializing in artificial intelligence, as part of its drive to expand its presence in the artificial intelligence infrastructure sector.

Despite the recent wave of selling, the majority of financial institutions still maintain a positive outlook for SpaceX stock, as six companies recommend buying compared to only one recommendation to sell, while the average target price is about $227 per share, indicating the possibility of achieving gains of approximately 45% compared to current trading levels.