Tesla CEO Elon Musk has lost his position as the world’s richest man following a slump in Bitcoin and a slump in his company’s stock that some analysts believe are correlated. Tesla stock (TSLA) has dropped 21% from its high of $890 on January 26, accelerating those losses over the past two days in a fall to $698. Shares of the electric vehicle maker dropped as much as 13% on Tuesday, February 23, the stock’s worst day since early September.
Tesla’s stock drop is being associated with bitcoin’s slump.
Fox Business has blamed this week’s Tesla stock drop on the company’s association with Bitcoin, citing analyst Dan Ives of Wedbush, who also noted he believes the move was a strategic one for the long-term. Tesla stock traded at around $865 earlier this month when the announcement it had purchased $1.5 billion in Bitcoin was made. It bottomed out at $681 yesterday, according to Yahoo Finance. However, reports of quality control issues in China may have also affected the price.
Bitcoin continues to trade around $50,000.
At the time of writing, BTC is changing hands at just above $50,500. As reported earlier, Tesla owns an estimated 48,000 BTC, which means that paper profits were in the region of one billion dollars by the time the asset had hit its all-time high of a little over $58,000 on February 21. Despite this week’s price drop, the firm is still in profit on the Bitcoin buy, as the asset was priced at a touch over $39,000 when the purchase announcement was made, but the actual purchase happened sometime in January when the price was even lower.