Tesla SpaceX stock slump cuts into Musk wealth before Starship test

The Tesla SpaceX stock slump gave Elon Musk a difficult week across his two highest-profile companies, according to CNBC. Tesla shares fell 18% for the week to close Friday at $313.03, their worst weekly decline since 2022, while SpaceX dropped 7.2% over five trading days to finish at $115.07.

For investors, the moves show how quickly expectations can reset when companies tied to ambitious, expensive projects hit a rough patch. CNBC reported that the declines erased roughly $130 billion from Musk’s wealth, just weeks after he had become the world’s first trillionaire. Musk posted on X on Friday: “(Former) trillionaire.”

Why did Tesla stock fall this week?

CNBC linked Tesla’s sell-off to the electric vehicle maker’s second-quarter report late Wednesday, which came in below Wall Street expectations. The company turned cash flow negative after spending increased on projects including robotaxis, humanoid robots and a large chip fabrication plant.

Cash flow is the money moving in and out of a business. When a company is cash flow negative, it is spending more cash than it is bringing in over the period, a point investors watch closely because it can limit flexibility even when a company still has long-term growth plans.

Argus Research, which has a hold rating on Tesla, said in a Friday note that the spending is expected to weigh on free cash flow and push out earnings growth without near-term returns for shareholders. The firm also said it believes consistent profit growth will be extremely difficult for Tesla in the near term.

Tesla is now down 30% for the year, CNBC reported, making it the weakest performer among the largest technology companies.

What is happening with SpaceX stock?

SpaceX has also been sliding after an early rally following its public debut. CNBC reported that the stock has fallen in four of the past five weeks and is about 43% below its peak closing price from June 16. Friday’s close marked its lowest level since the company’s record IPO last month.

The decline came ahead of SpaceX’s planned 13th test flight of Starship, the largest rocket ever built or flown, according to CNBC. The company planned to launch the upgraded Starship V3 from Starbase, Texas, on Friday evening.

SpaceX said on X that it delayed a test flight scheduled for Thursday because of weather. A prior attempt last week was also scrubbed after the rocket’s booster triggered a hold, with a SpaceX employee saying during the company’s livestream that the engines shut down just as ignition was beginning.

Why does Starship matter to SpaceX?

Starship is designed to be fully reusable, meaning SpaceX aims to fly the rocket hardware repeatedly rather than discard major parts after each mission. CNBC reported that the vehicle is considered central to SpaceX’s near-term goal of expanding its Starlink satellite network.

SpaceX also plans to use Starship to return U.S. astronauts to the Moon’s surface. Musk has said he wants the rocket to eventually carry crewed missions to Mars.

Musk also appeared this week in an interview with The Economist that CNBC described as contentious. Editor-in-chief Zanny Minton Beddoes asked about his support for far-right and fringe political parties in some countries, including Germany’s AfD and the U.K.’s Restore Britain. Musk rejected that framing, saying, “It’s just normal people!” and criticizing what he called an “absurd characterization of the far right.”

This story draws on original reporting from CNBC.