The world’s richest man Elon Musk lost a whopping $20 billion overnight after saying Tesla could keep cutting prices amidst ‘turbulent times’.
The drop in net worth to $234.4 billion is the seventh-largest decline ever among those in the Bloomberg Billionaires Index, and further narrows the wealth gap between Musk and Bernard Arnault, the world’s two richest people. Musk’s fortune still exceeds that of Arnault, chairman of luxury goods maker LVMH, by about $33 billion.
Shares of Austin-based Tesla slid 9.7% to $262.90 in New York, the most since April 20, after the company warned of more hits to its already-shrinking profitability. Months of markdowns have taken a toll on automotive gross margin, which fell to a four-year low in the second quarter.
Musk, the company’s CEO, said Wednesday Tesla will have to keep lowering prices if interest rates continue to rise.
The company has pulled down prices several times since late last year, and increased discounts and other incentives to reduce inventory, as it tries to shield against competition and economic uncertainty.
