Elon Musk lost more than $21 billion from his net worth on Wednesday morning after SpaceX shares fell around 2%, according to Forbes. The fall came just two days after Musk regained his status as a trillionaire.
As of 11:35 a.m. EDT on Wednesday, Musk’s net worth stood at $1.03 trillion, down 2.04%. Despite the decline, he remains world’s richest person with a trillionaire status, according to Forbes’ Real Time Billionaires list.
What triggered the sell-off?
SpaceX shares were trading at $168.86, down around 2%, after reports suggested SpaceX is in talks with banks and asset managers to raise billions for the purchase of Nvidia artificial intelligence chips.
Following the news, the company’s credit risk surged to a fresh high and the company’s bonds weakened in the secondary market on Wednesday.
The price of five-year credit default swaps on the company’s debt, which increases as investor concern grows, rose as much as 0.167 percentage point, or 16.7 basis points, to around 197.6 basis points a year, according to ICE Data Services.
“This is unprecedented debt supply with no real ending in sight,” Sal Naro, chief investment officer at Coherence Credit Strategies, told Bloomberg News, speaking about AI debt in general. “The world has never seen an infrastructure build like this. This is larger than the railroads because this is global, all at once.”
SpaceX’s $40 billion debt plan
SpaceX is looking to raise $40 billion in what would be among the biggest-ever debt financings for the AI buildout. The company’s fundraising discussions are in an early stage and could end without a deal being completed, Bloomberg reported, citing people familiar with the matter.
It might include a $10 billion of bank loans and $30 billion of investment-grade debt according to the Financial Times, citing unidentified sources familiar with the matter.
Apollo is expected to lead the SpaceX deal and help place the debt with a broad range of investors, the Financial Times reported on Wednesday.
The deal is currently expected to close in 2027. However, SpaceX and Nvidia has not made any official comment on the matter.
Musk’s losses were also affected by Tesla shares, which were down around 1.5%. Musk owns nearly 11% of Tesla.
Musk maintains his trillionaire status
The latest decline came after Musk’s wealth rose by more than $30 billion on Monday, when SpaceX and Tesla shares gained, pushing him back into the trillionaire club.
Forbes valued Musk’s net worth at $1.03 trillion, keeping him firmly in first place on its Real Time Billionaires list. Jeff Bezos ranked second with an estimated net worth of $374 billion.