Tesla recently lost $200 billion in its market value, according to Forbes. This comes following the electric car company’s investment in Bitcoin. In the first week of February, Tesla announced that it had invested $1.5bn in Bitcoin. As it stands, the company has lost more than $200 billion in its market value as a result of its controversial investment which doesn’t seem to be going so well.
According to Forbes, Tesla’s stock plummeted by 25% and the company lost over $200 billion in market value since its investment in Bitcoin. Before the losses the electric car company is facing now, the company made a profit of almost one billion dollars on its Bitcoin investment but that seems not to matter now. This loss is not only telling on the electric car company, but also on the individual net worth of the CEO of the company; Elon Musk. Elon Musk’s net worth has dropped from about $200 billion to $183 billion, declining by about $17 billion.
Daniel Ives; a Wedbush Securities analyst, in a note to its clients provided an expert opinion suggesting the reason behind the recent Tesla plunge in the stock markets. Ives stated, “For both good and bad, Tesla shares are now ‘heavily tied’ to Bitcoin prices–a development that’s driving a sell-off among cautious investors.” Another reason for Tesla’s losses, also stated by Ives, was Tesla’s decision to stop the sales of its cheapest model Y car, raising demand concerns amongst Wall Street analysts.
Tesla shares plunged over 10% on Tuesday morning. This recent plunge has pushed its total loss since the Bitcoin investment to 25%. This is resulted in Tesla’s loss of about $200 billion in Market capitalization, according to Forbes. Tesla stocks shot up to over 740% in 2020, but currently, Tesla’s stock seems to be now at its lowest level.
Elon Musk who recently rose to being the richest man in the world at the beginning of this year no longer holds the title of World’s Richest Man. Amazon CEO Jeff Bezos now occupies the position of the World’s Richest Man.