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Elon Musk's Fortune Plunges By Nearly $17 Billion Friday After Leaked Comments About Tesla Layoffs – Forbes

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Tesla chief Elon Musk.
Shares of Tesla fell 9% Friday, as the world’s richest person reportedly weighed laying off 10% of his electric vehicle maker’s employees in a leaked email.
For the fourth week in a row, shares of Tesla swung by more than 5% on a Friday, plunging 9.2% after Elon Musk reportedly sent emails to executives saying his electric vehicle maker should freeze hiring and cut its workforce by 10%, citing his “”super bad feeling” about the economy. The fortune of the world’s richest person–he’s worth an estimated $216.8 billion–shrunk by $16.9 billion on the news, which came just days after Musk was widely criticized for ordering his employees to return to the office for 40 hours a week or “pretend to work somewhere else.”
“The biggest thing that investors are probably thinking is that they want Musk to shut up,” says Miller Tabak’s chief market strategist Matt Maley. “He was strangely quiet last week and the stock finally saw a nice rally.” Despite rebounding 14% last week and another 2% through Thursday, Tesla’s stock ended this week down 33% for the year, with most of its losses coming after Musk announced his $44 billion Twitter takeover on April 14. Musk has not responded to Forbes’ request for comment.
Musk’s tweets have caused Tesla’s stock price to swing wildly in recent weeks – for example, when he tweeted that the Twitter deal was on hold on May 13, Tesla shares soared 5.7% that day. And while his latest comments were made in an email leaked to Reuters, investors may have already been on edge. Last month at the All-In Summit in Miami, Musk said the U.S. was “probably” already in a recession due to government stimulus-fueled inflation.
Musk’s outlook is at odds with the views of some economists, including Goldman Sachs’ Jan Hatzius, who wrote in a note last week that recession fears “will prove overblown unless new negative shocks materialize.” But the Tesla chief executive officer’s loud voice appears to be ringing in investors’ ears.
“It’s great that people want to buy EV’s to help the environment, but most of Tesla’s cars are expensive,” says Miller Tabak’s Maley. “If he’s worried about the economy enough to lay off 10% of his workforce, what does that tell you about his view of the demand side of things for his cars? A recession is not going to be Tesla-friendly.”
Adding to Musk’s and Tesla’s woes, Cowen analyst Jeffrey Osborne lowered his price target for Tesla’s stock from $790 to $700 per share Friday (it closed at $703.55 Friday), citing lingering concerns about production levels in China due to the country’s latest round of Covid-19 lockdowns, which had already weighed on the company’s shares in recent weeks.
According to CFRA analyst Garrett Nelson, Musk’s reported comments have likely exacerbated investor fears on this front. “Tesla is a high-growth company that is in the process of ramping up production at two brand new plants, so the hiring freeze raises a lot of questions,” he says. “Judging by the stock price reaction today, the market is assuming the worst.”
Despite the shock of Friday’s news, Tesla is hardly an outlier when it comes to its reported staffing plans. “Many other technology companies are following a similar path,” says Blanke Schein Wealth Management’s chief investment officer Robert Schein. “Facebook, for example, recently announced its plans to pause hiring, and Coinbase is going as far as rescinding previously inked job offers. Tesla’s announcement is the next domino to fall, and investors are starting to take notice of the financial woes hitting growth companies.” The tech-heavy Nasdaq fell by nearly 2.5% Friday, erasing its gains from earlier in the week, and bringing its losses for the year to 23%.
The $16.9 billion hit to Musk’s fortune Friday has to hurt at least a little bit, bringing the contraction in his fortune for the year to $55 billion. But he remains the world’s richest person by a long shot, worth $58.9 billion more than runner-up Bernard Arnault of French luxury goods empire LVMH. As recently as last Thursday, Musk was looking on the brightside, tweeting that a recession “is actually a good thing.”
According to Musk, the economy “has been raining money on fools for too long.” One has to wonder: Does that include buyers of Tesla vehicles?

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She has been writing columns on consumer gadgets for over 2 years now. Her areas of interest include smartphones, tablets, mobile operating systems and apps. She holds an M.C.S. degree from Texas A&M University.