How Elon Musk Lost $600 Billion on Paper as SpaceX Stock Collapse Shocks Wall Street

Elon Musk's extraordinary rise to an estimated $1.3 trillion fortune (around £977.6 billion) has unravelled almost as quickly as it began, with the billionaire's paper wealth shrinking by around $600 billion (£451 billion) in just weeks as SpaceX shares tumbled following the company's blockbuster stock market debut.

The dramatic reversal has pushed Musk's estimated net worth below $700 billion, underscoring how rapidly market valuations can inflate — and erase — the fortunes of the world's wealthiest individuals.

Elon Musk's Net Worth Drops Below $700 Billion

The latest decline in SpaceX shares has reduced Elon Musk's estimated net worth to around $695.7 billion (£523.1 billion) after the stock fell another 4.8% on Monday.

While the figure still leaves him comfortably as the world's richest person, it marks a significant retreat from the estimated $1.3 trillion (£977.6 billion) valuation his fortune briefly reached shortly after SpaceX went public.

The decline does not represent cash disappearing from Musk's bank account.

Instead, it reflects the falling market value of his holdings in SpaceX, alongside weakness in Tesla shares.

Musk himself acknowledged the reversal on social media on 24 July, describing himself as a '(former) trillionaire' after the remarkable surge in his paper wealth faded within weeks.

SpaceX Stock Surge Turned Into a Sharp Correction

The SpaceX IPO initially generated enormous enthusiasm among investors.

The company priced its shares at $135 (£101.50) before they opened at $150 (£112.80) on 12 June and finished their first trading day at $161 (£121).

Buying momentum continued over the following days, sending the stock as high as $225.64 (£169.67) within four trading sessions.

At that point, SpaceX's market capitalisation approached $3 trillion (£2.3 trillion), significantly boosting the value of Musk's ownership stake.

However, the rally proved short-lived.

By late July, SpaceX shares had fallen to around $113 (around £85), roughly 16% below their IPO price.

As of last Friday, the company's market value had declined to approximately $1.5 trillion (£1.1 trillion), nearly half its June peak.

The rapid rise and fall explain why Elon Musk's net worth changed so dramatically despite him not selling any shares.

Why SpaceX Shares Became So Volatile

One major factor behind the dramatic swings was the unusually small number of SpaceX shares available for public trading.

Only about 4.9% of the company's 13.2 billion shares entered the market when trading began.

That is far below the roughly 80% free-float ratio commonly seen among large companies listed on major US exchanges.

With relatively few shares available, investor demand quickly pushed prices sharply above the IPO level.

As selling pressure later increased, the limited supply amplified the downward move, accelerating the decline in SpaceX shares.

The poor performance has also drawn attention on Wall Street.

According to reports, SpaceX ranks among the bottom 10% of US IPOs worth at least $1 billion (£752 million) since 2009.

Over its first 27 trading days, the stock declined 23% from its opening-day close, while comparable large IPOs averaged a modest gain over the same period.

More Pressure Could Be Coming for SpaceX Stock

Investors are also watching a series of upcoming lock-up expiries that could place further pressure on SpaceX shares.

Beginning 6 August, early investors and employees will be allowed to sell up to 911.5 million shares after the company releases its first quarterly earnings report as a listed business.

Additional lock-up periods are scheduled to expire later in September, November and December, increasing the number of shares available for trading.

Meanwhile, Musk's wider fortune has also been hit by Tesla's recent decline.

Tesla shares fell sharply after the electric vehicle maker reported second-quarter revenue of $28.2 billion (£21.2 billion) and adjusted earnings per share of $0.33 (£0.25), both below analysts' expectations.

Free cash flow also turned negative for the first time in two years as the company continued investing heavily in robotaxis, its Optimus humanoid robot programme and artificial intelligence chip production.

With both Tesla and SpaceX losing market value at the same time, Musk's paper fortune has endured one of the fastest reversals ever seen among the world's richest individuals.