Elon Musk, the maverick boss of Tesla, is no longer the world’s richest person after shares in the electric car company dropped 8.6% on Monday, wiping $15.2bn (£10.8bn) off his fortune.
Musk, who last month leapfrogged Amazon founder Jeff Bezos to take the title of the world’s wealthiest person, dropped back into second place with a $183bn estimated fortune behind Bezos’ $186.3bn.
The 8.5% drop in Tesla’s share price on Monday – the sharpest one-day fall since September – was partly fuelled by Musk tweeting that the prices of bitcoin and other cryptocurrencies “do seem high”. Tesla’s shares were down a further 6% in pre-market trading on Tuesday.
His comments came just two weeks after Tesla bought $1.5bn of bitcoin, which sent the price of the cryptocurrency to fresh highs. Bitcoin, which reached a high of $58,000 on Sunday, has since fallen to $47,500 on Tuesday morning. The price is still up more than 500% over the past year.
Replying on Twitter to Peter Schiff, a stockbroker and gold investor, Musk said: “Money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency and error. The system will evolve to that which minimises both. That said, bitcoin and ethereum [another cryptocurrency] do seem high.”
Scottish Mortgage Investment Trust, which is managed by Tesla shareholder Baillie Gifford, was the biggest faller on the FTSE 100 on Tuesday, down 11%. Baillie Gifford was the biggest faller on the FTSE 250, down 8%.
Musk had last week said Tesla’s decision to buy $1.5bn in bitcoin was a company decision not driven by him. “Tesla’s action is not directly reflective of my opinion,” Musk said, again on Twitter.
“Having some bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company ... When fiat [government-issued] currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs [bullshit] as fiat money. The key word is ‘almost’.”
Tesla disclosed the bitcoin holding in a filing with the US Securities and Exchange Commission last month. The company said it had “updated our investment policy to provide us with more flexibility to further diversify and maximise returns” to allow it to invest cash reserve in “alternative reserve assets including digital assets”.
It said that since the decision was approved by its audit committee it had “invested an aggregate $1.5bn in bitcoin under this policy and may acquire and hold digital assets from time to time or long term”.
Musk has previously helped to drive the popularity of cryptocurrencies, including bitcoin and dogecoin, by regularly tweeting that he is a “supporter” of the cryptocurrencies. He has also joked that bitcoin is his “safeword”.
Last month, the price of bitcoin soared after Musk said he was a supporter of the cryptocurrency in an interview carried on Clubhouse, a new social media app designed for wealthy people. “I do think at this point bitcoin is a good thing,” he said. “And, so, I am a supporter of bitcoin. Like I said, I was late to the party, but I am a supporter of bitcoin. And I think, bitcoin is really on the verge of getting broad acceptance by conventional finance people.”
He has previously changed his Twitter biography to “#bitcoin”.
Musk also tweeted on Monday that Tesla’s Model Y Standard Range SUV would still be available “off the menu”, following reports from electric vehicle newsite Electrek that the model had been removed as an option online.