Not only is Elon Musk no longer the world’s richest person, but his electric car company, Tesla, is also not faring very well. Last week, Amazon’s Jeff Bezos overtook Musk’s top spot on the Bloomberg Billionaires Index, and now to further add insult to injury, Tesla plunged in the pre-market session on Tuesday, erasing all year-to-date gains and falling below its S&P 500 inclusion level.
Following Monday’s 8.6% decline, Tesla stock fell by nearly 12% to $627 on Tuesday before recovering ahead of the close, putting the electric car company 30% below its record intraday high set on January 25. The mass sell-off was largely fueled by Musk’s tweets over the weekend, when he said the prices of cryptocurrencies Bitcoin and rival Ether “do seem high.” His comments follow Tesla’s earlier announcement that it had purchased $1.5 billion worth of Bitcoin in a move to diversify its assets.
However, it appears that the inconvenient revelations surrounding Tesla are just beginning. Also on Monday, Euro Pacific Capital CEO Peter Schiff, who is well-known to be a gold enthusiast and a Bitcoin detractor, took to Twitter to reveal that Tesla’s share price has actually been declining following its Bitcoin purchase— a downturn that many investors have blamed on the automaker’s CEO, Musk.
“Two weeks after @elonmusk announced that he spent $1.5 billion of shareholder money buying bitcoin, #Tesla stock entered a bear market, plunging 20 percent from its all-time high set on January 25th, and 16 percent since disclosing the bitcoin buy,” Schiff revealed, adding: “Not an example other CEOs will likely follow!” In what has become a rather typical fashion of response for Musk, the Tesla CEO replied to Schiff’s critical tweet with one emoji: an eggplant.
Schiff’s tweet followed what has been a volatile beginning of the week for Bitcoin, with the cryptocurrency falling from $58,000 to a low of $46,000 on Tuesday.
Information for this briefing was found via Bloomberg and Twitter. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.