Tesla Shares Plunge Following Trump-Musk Conflict
The electric vehicle manufacturer faces a significant market drop as political tensions escalate.
Tesla Inc. experienced an unprecedented decline in its stock value, plummeting approximately 14% within a single trading day.
This sharp decrease was triggered by comments from former U.S. President Donald Trump, who suggested on his social media platform, Truth Social, that he would consider eliminating government contracts with Elon Musk’s companies as a means to cut federal spending.
Following this announcement, Tesla's market capitalization fell by $153 billion, marking a record decline for the company.
The decline reflects ongoing struggles for Tesla, which has already seen its stock price decrease by 25% since the beginning of the year.
The turbulence in the stock began around noon, coinciding with an exchange of insults between Trump and Musk, creating a climate of panic among investors.
This public confrontation is viewed as exacerbating existing concerns regarding Musk’s role in governmental affairs and the implications for his businesses.
Earlier in May, Musk resigned from his position leading the Department of Government Efficiency (DOGE), following mounting criticism aimed at his enterprises.
While Tesla faced these challenges, Musk's other ventures, particularly SpaceX and Starlink, completed a successful trading day, contributing to a rise in the stock prices of competing communications companies.
Analysts highlight that Tesla's rapid decline is unprecedented in the automotive industry, with strategists from major investment banks like JPMorgan issuing warnings as early as March.
They noted the rarity of a global automotive brand experiencing such a swift loss in market valuation.
Furthermore, Musk's political engagements in Europe, including expressions of support for far-right political parties, have also negatively impacted Tesla’s sales performance in that region.
This sharp decrease was triggered by comments from former U.S. President Donald Trump, who suggested on his social media platform, Truth Social, that he would consider eliminating government contracts with Elon Musk’s companies as a means to cut federal spending.
Following this announcement, Tesla's market capitalization fell by $153 billion, marking a record decline for the company.
The decline reflects ongoing struggles for Tesla, which has already seen its stock price decrease by 25% since the beginning of the year.
The turbulence in the stock began around noon, coinciding with an exchange of insults between Trump and Musk, creating a climate of panic among investors.
This public confrontation is viewed as exacerbating existing concerns regarding Musk’s role in governmental affairs and the implications for his businesses.
Earlier in May, Musk resigned from his position leading the Department of Government Efficiency (DOGE), following mounting criticism aimed at his enterprises.
While Tesla faced these challenges, Musk's other ventures, particularly SpaceX and Starlink, completed a successful trading day, contributing to a rise in the stock prices of competing communications companies.
Analysts highlight that Tesla's rapid decline is unprecedented in the automotive industry, with strategists from major investment banks like JPMorgan issuing warnings as early as March.
They noted the rarity of a global automotive brand experiencing such a swift loss in market valuation.
Furthermore, Musk's political engagements in Europe, including expressions of support for far-right political parties, have also negatively impacted Tesla’s sales performance in that region.
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