Elon Musk’s company SpaceX (ticker symbol SPCX) went public on June 12, 2026. SPCX was priced at $135 per share ahead of its Nasdaq debut. The stock price rose by 19 percent on the first day of trading, giving the company a market capitalization of $2.1 trillion. It made Musk the world’s first trillionaire, with his net worth reaching a peak of $1.45 trillion within the next couple of trading days.

The global reaction to that staggering amount of personal wealth was swift. Most people thought it was obscene for a single person to have that much money while millions of others continued to struggle for the most basic of needs. Vermont Senator Bernie Sanders issued “a call to action to take on the unprecedented income and wealth inequality that now exists and the greed and power of a ruling class that is destroying the social fabric of America.” California Governor Gavin Newsome wrote: “Americans are struggling to pay for groceries and gas while Elon Musk becomes a TRILLIONAIRE.”

SPCX currently trades at around $110 per share. Recently, market worries about excessive capital expenditures in the AI sector, along with doubts about the future profitability of the companies doing all that spending, have caused prices of some previously high-flying tech company stocks to decline. The SPCX price drop and the overall market downturn have caused Musk’s net worth to tumble. In just a few weeks, it has fallen from the peak of $1.45 trillion to under $700 billion, cutting his fortune by more than half.

For most humans, having that kind of wealth, even at that reduced level, is unimaginable. But Musk is in a league of his own.

I agree with those who say that such a concentration of wealth is unhealthy for society. Of the various redistributive approaches that are often proposed to address the issue, the one that has gained the most currency lately is a wealth tax. But there are a few aspects of that idea that consistently trouble me.

I don’t think sufficient recognition is given to the fact that much of the wealth we talk about is only on paper. Quite often, that wealth also consists of inflated values. That $2.1 trillion market capitalization on day one valued SpaceX at 112x its prior-year revenue. For perspective, firms in that type of industry typically trade at a median of 11x to 27x trailing revenues. SpaceX is arguably a hyper-growth outlier with extreme revenue growth prospects. For companies in that category, those multiples can range from 40x to 180x. Even then, SpaceX’s sky-high valuation did worry some people.

Financial research firm CFRA gave SPCX a sell rating shortly after the stock began trading. The firm’s analysts set a 12-month price target of $115 for SPCX. Among the reasons for their pessimistic outlook were high capital intensity and overly rosy assumptions about future contributions to profits from unproven business segments.

The precipitous drop in Musk’s fortune should serve as a cautionary tale to policymakers and the rest of us. We shouldn’t always assume that we can measure how wealthy people are by simply looking at their stock holdings. Not everything we see in the financial markets is real. The last thing we want to do as a society is to design budgets and programs on the basis of phantom wealth.