Elon Musk's "darkest week": Tesla plunges 18% for the biggest weekly drop since 2022, SpaceX Starship drops another 7% before test flight

This week has been a tough one for Elon Musk.

Tesla's stock price plunged 18% this week, closing at $313.03 on Friday, marking the most severe weekly decline since 2022.

Meanwhile, SpaceX's stock continued its downward trend, dropping 7.2% over the past five trading days and closing at $115.07 on Friday, its lowest level since the company's record-setting IPO last month.

The decline in the share prices of both companies has wiped about $130 billion from Musk's personal fortune. Just weeks ago, he had become the world's first "trillionaire".

On Friday, Musk joked on X: "(Former) trillionaire".

Tesla: Cash Flow Turns Negative, Profit Outlook Under Pressure

Tesla's stock decline was mainly due to the fact that the company's Q2 earnings report missed expectations.

Due to a significant increase in investments in future projects, including robo-taxis, humanoid robots, and large chip factories, Tesla's cash flow turned negative.

Argus Research analysts stated in a report on Friday:

"We expect this to put pressure on free cash flow, delay earnings growth, and fail to deliver near-term shareholder returns. It is nearly impossible for Tesla to achieve steady profit growth in the short term."

So far this year, Tesla's stock price has fallen 30%, making it the worst performer among the Mag 7.

SpaceX Falls for Three Consecutive Weeks, Starship Test Flights Canceled Twice

SpaceX’s stock has also continued to decline over the past month. While the company's stock soared shortly after its IPO, it then steadily retreated. In the past five weeks, SpaceX's share price has fallen in four, now down about 43% from its June 16 closing high.

Investors overall are reducing exposure to tech stocks. Mahoney Asset Management CEO Ken Mahoney described the current situation as a "perfect storm"— with oil prices, interest rate hike expectations, and skepticism around AI returns combining as triple pressures.

Morgan Stanley analyst Jonas said that many investors expect SpaceX’s stock price may drop to $100 after the first restricted shares are released next month. He believes the current investor pessimism is clearly out of line with the company's fundamentals, creating a buying opportunity for SpaceX.

On Friday evening, SpaceX will once again attempt the 13th Starship test flight. This is currently the world’s largest and most powerful rocket system.

The company plans to launch the upgraded Starship V3 rocket from its “Starbase” site in Boca Chica, Texas. This rocket is designed to be fully reusable and is considered vital to SpaceX’s near-term goal of massively expanding its Starlink satellite network.

SpaceX said on its X platform the planned Thursday test flight was postponed due to “weather reasons.” Previously, the company also canceled a test flight last week, at which time the booster triggered an abort procedure.

If the Starship V3 is successfully launched this time, it will be the first successful Starship mission since SpaceX went public. SpaceX plans to use Starship to return American astronauts to the surface of the moon, and Musk’s long-term goal is to use the rocket for manned Mars missions.