Tesla Shares Set to Drop Amid Investor Concerns Over Elon Musk's Political Moves
Tesla’s stock is poised for a significant decline in the US as investors worry that Elon Musk’s new political venture could create further challenges for the electric vehicle manufacturer.
Early trading on Monday saw Tesla’s shares drop over 7%, risking a loss of roughly $70 billion (£51 billion) in market value once Wall Street opens.
A fall of that magnitude would reduce Musk’s personal stake by more than $9 billion, leaving his holdings worth around $120 billion. Despite this, the Tesla and SpaceX CEO remains the world’s wealthiest individual, with an estimated net worth of $400 billion, according to Forbes.
Tesla's valuation stands just below $1 trillion, but its stock has faced pressure due to Musk’s shifting relationship with Donald Trump.
Initially, Musk’s outspoken endorsement of the former president sparked backlash among consumers. Now, tensions between the two have left investors concerned that Musk could be distracted from leading Tesla or that government intervention could target his businesses.
Dan Ives, an analyst at Wedbush Securities, stated that Musk’s decision to finance a US political party will unsettle investors.
“Simply put, Musk’s increasing political involvement—especially challenging Washington’s establishment—is the opposite of what Tesla investors want during this pivotal phase for the company,” Ives said, noting growing frustration among shareholders that Musk, Tesla’s largest stakeholder, continues to engage in political debates.
On Sunday, Trump dismissed Musk’s plans to establish the America party as “ridiculous,” sharply criticizing the billionaire.
Through a post on Truth Social, Trump wrote: “I am saddened to see Elon Musk go completely ‘off the rails,’ turning into a total train wreck over the last five weeks.”
Musk revealed the formation of the America party on his social media platform X, stating: “When it comes to wasting taxpayer money and corruption, we no longer have a democracy—just a one-party system. The America party is here to restore your freedom.”
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