Why did Elon Musk's wealth shrink by $16 billion in one day?

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Elon Musk's wealth shrank by $16 billion in one day due to a significant drop in Tesla Inc.'s share price, which was triggered by the company's weak third-quarter earnings report. Musk, who is the richest person in the world with a fortune of $209.6 billion, owns 13% of Tesla and derives the majority of his wealth from the auto company. Tesla's shares fell by 9.3% after it missed both earnings and sales expectations for the quarter. The electric vehicle company reported its first quarterly fall in sales this year, delivering 435,059 vehicles, while margins fell to the lowest in over four years after the company repeatedly cut prices for its cars. During a post-earnings conference call, Musk highlighted the adverse effects of high interest rates on consumer confidence. Despite these challenges, Musk's wealth had surged by more than $71 billion in 2023, in tandem with a resurgence in Tesla's stock value, even as the company's financial underpinnings weakened. Looking ahead, Tesla remains focused on its goal to put 1.8 million customers in new vehicles by year-end. However, Musk expressed concerns regarding the potential impact of rising interest rates, which could make cars less affordable. It's important to note that fluctuations in Musk's wealth are not uncommon due to his significant stake in Tesla. For instance, at its peak in November 2021, Musk’s net worth was $340 billion, but it plunged 65% in 2022 due to weakened demand for Tesla's vehicles and increased competition in the electric vehicle market. Despite these fluctuations, Musk has managed to maintain his position as one of the world's wealthiest individuals.
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