Elon did not lose $600 billion from a bank account. The number vanished because most of his fortune sits in shares. When SpaceX (NASDAQ: SPCX) jumped after its public listing, the value of his stake pushed his estimated wealth above $1.3 trillion.

When the stock later fell by half from its highest price, that paper gain disappeared. His net worth dropped to about $725 billion, and his run as the first trillionaire lasted only a few weeks.

The stock began trading on June 12 after the company priced its offer at $135 a share. Buyers paid $150 for the first trade, and the session ended at $161. Four days later, the price reached $225.64.

That gave SpaceX a market value close to $3 trillion. By late July, shares were near $113, around 16% below the offer price. On July 24, Elon posted, “(Former) trillionaire.”

SpaceX’s tiny public float sent Elon’s paper wealth sharply higher and then lower

The listing raised $85.7 billion after banks used the extra-share option attached to the deal. That made it far larger than the 2019 listing of Saudi Aramco (TADAWUL: 2222). The SpaceX deal started with a valuation of about $1.75 trillion.

The company had 13.2 billion shares, but public buyers received only about 4.9% of them. Most large companies in major indexes have close to 80% of their stock available for normal trading, based on data from Nasdaq Inc. (NASDAQ: NDAQ).

SpaceX entered the market with very little supply, so even a rush of new orders could push the price far above the IPO level.

Once traders started selling, the stock dropped fast. It closed at $118.24 on July 23 and $115.07 on July 24. By Friday, SpaceX was valued at about $1.5 trillion, almost half of what it was worth at its June high.

Short sellers benefited from the drop. Ortex Technologies estimated that bearish traders had about $15.5 billion in unrealized gains. Short positions covered nearly 56% of the public float, equal to around 360 million shares.

Elon warned on social media that firms keeping very large short bets open against SpaceX for a long time had a very small chance of surviving.

The stock also ranked badly against other major U.S. listings. Barron’s placed SpaceX in the bottom 10% of American IPOs valued above $1 billion since July 2009.

During its first 27 trading days, SpaceX fell 23% from the $161 first-day close. A group of 955 similar IPOs produced an average gain of 0.8% over the same period.

New share supply and Tesla’s earnings miss kept pressure on Elon’s fortune

To make matters worse, early SpaceX investors and employees could begin selling up to 911.5 million shares on August 6, two days after the company reports its first quarterly results as a public company.

That block alone would raise the tradable portion of the company from about 4.9% to roughly 12%, per CNBC’s calculation.

More locked shares will become available in September, November, and December as the 180-day lockup period expires in stages. Goldman Sachs (NYSE: GS), which led the deal, can also allow some investors to sell earlier. Elon’s own SpaceX shares will stay locked until June 2027.

The SpaceX drop came during Tesla’s (NASDAQ: TSLA) worst week since 2022. Tesla shares fell 18% after its second-quarter results missed Wall Street’s estimates. Revenue came in at $28.2 billion, while adjusted earnings were $0.33 per share, below the $0.50 analysts expected.

Tesla also posted negative free cash flow for the first time in two years. It spent money on robotaxis, a humanoid machine called Optimus and giant factories to make artificial-intelligence chips. That was another hit to Elon’s wealth with Tesla being one of his biggest listed assets.

So Tesla’s report hit Elon from a second direction, while SpaceX was already falling. His wealth estimate includes stakes at current market prices, so an 18% weekly loss in Tesla shares also fell the value assigned to that holding that week.