Musk loses $130bn as Tesla cash burn and SpaceX IPO unwind hit shares
A brutal selloff in Tesla and SpaceX erased $130 billion from Elon Musk’s net worth as investors punished the automaker for negative cash flow ahead of a critical SpaceX rocket launch.
Elon Musk’s corporate empire suffered a severe market correction this week, with Tesla and SpaceX shares plummeting to erase roughly $130 billion from his personal wealth. The dual selloff was driven by Tesla’s disappointing second-quarter earnings and a continued post-IPO unwind in SpaceX stock. Weeks after briefly becoming the world’s first trillionaire, Musk summarized the reversal in a Friday post on X: "(Former) trillionaire."
Tesla bore the brunt of the damage, plunging 18% over the week to close at $313.03, marking its steepest weekly decline since 2022. The drop followed Wednesday's earnings release, which revealed the automaker had turned cash flow negative. Management is aggressively pouring capital into long-term bets like robotaxis, humanoid robots, and a massive chip fabrication plant.
Wall Street analysts are increasingly skeptical of this capital allocation strategy. Argus Research, which maintains a hold rating on the stock, warned clients that the spending spree will "pressure free cash flow and delay earnings growth, without providing any near-term shareholder return." The firm concluded it will be "nearly impossible for Tesla to generate any consistency in profit growth in the near-term." The stock is now down 30% year-to-date, making it by far the weakest performer among mega-cap tech companies.
SpaceX’s newly public stock is facing its own sustained pressure, falling 7.2% this week to close at $115.07. The shares have dropped in four of the last five weeks and now sit roughly 43% below their June 16 peak. Investors are closely watching for a potential catalyst in the form of the 13th test flight of Starship V3, scheduled for Friday evening from Starbase, Texas.
A successful launch of the 400-foot-tall, fully reusable rocket would be the first since the company’s record IPO last month. The vehicle is considered essential for SpaceX’s plans to aggressively expand its Starlink satellite network and fulfill contracts to return U.S. astronauts to the Moon. The flight was delayed from Thursday "due to weather," following a prior abort last week when a booster issue triggered a hold that shut down the engines at ignition.
The financial headwinds coincide with rising political scrutiny that complicates Musk's broader business ecosystem. During a tense interview with The Economist this week, editor-in-chief Zanny Minton Beddoes pressed Musk on his financial and vocal support for fringe, anti-immigration parties like Germany's AfD and the UK's Restore Britain, alongside his ties to President Donald Trump. Musk dismissed the characterization, telling Beddoes "It's just normal people!" and berating "the traditional media" for an "absurd characterization of the far right."
