Tesla's Crazy Thursday: A Roller Coaster Ride with Elon Musk and President Trump
Stock price of Tesla experiences a significant 14% drop, marking the 11th-worst day in its history, as the ongoing confrontation between Musk and Trump intensifies.
Elon Musk's Twitter feud with President Donald Trump took a toll on Tesla's shares on Thursday, as the duo's seemingly stable political alliance crumbled. The stock drop of nearly 14% translates to a staggering $138 billion loss in market value, erasing a whopping $34 billion from Musk's personal fortune [1][3].
Trading closed Thursday at $284.70, a far cry from the day's high of $351.55. This marks one of Tesla's worst single trading days since its IPO in 2010[2]. Though the stock did recover some losses, it still faced a massive downdraft, hitting more than 17% at one point in the afternoon [2].
This tumultuous exchange began when Musk, through over a dozen tweets on X since Tuesday, aired his displeasure over Trump's policy bill, dubbing it "massive, outrageous," and "pork-filled." Musk further expressed his disapproval by calling out Republicans who voted for the bill, suggesting they were complicit in a wrongdoing [1].
Musk's barbs extended to Trump himself on Thursday, when he responded to a 2013 tweet from Trump, "I cannot believe the Republicans are extending the debt ceiling-I am a Republican & I am embarrassed!". Musk simply wrote "wise words" in response [1]. Trump, in turn, responded to these recent attacks, stating that the relationship, once considered great, may no longer be a reality [1].
Industry analyst Dan Ives summed up the sentiments of many investors, stating, "The rapidly souring friendship between Musk and Trump is a jaw-dropping event, inducing fear among Tesla investors, and raising questions about what's next" [1].
Curiously, Tesla's stock had surged 22% in May, following Musk's announcement that he would dedicate more time to his role as Tesla's CEO for the next five years [2].
Tesla's ongoing feud with Trump also coincides with a decline in the company's sales in key markets such as the UK, Germany, Italy, and China in May. In the UK, Tesla's sales dropped a startling 45%, despite an overall industry growth of 28% [2].
The controversies surrounding Tesla's self-driving technology continue, with concerns over safety and technical data swirling. Despite Musk's claims of "full autonomy" when using Tesla's Autopilot feature, Tesla will be launching a robotaxi service in Austin, Texas, in June, featuring around 20 autonomous Model Y vehicles [2].
The National Highway Traffic Safety Administration has launched several investigations into Tesla's Autopilot feature over nearly a decade, including probes related to two deaths [2].
The breakdown in Musk and Trump's alliance can be traced to Musk's role as head of the Department of Government Efficiency, a position he held for several months. Though the two sides maintain that Musk's departure was amicable, and that Musk would continue to serve as a Trump advisor, Musk's focus on his government role raised concerns among some analysts who thought he was shifting his priorities away from Tesla [1].
[1] Enrichment Data: The Jeffrey Epstein files are a set of documents containing allegations of sexual misconduct by numerous high-profile individuals, including President Donald Trump. The files have been the subject of much speculation, with various theories circulating online. It's important to note that unsubstantiated claims do not necessarily hold truth, and allegations must be evaluated critically.
[2] Enrichment Data: Musk had been criticized for spending too much time on his government role at the expense of his responsibilities at Tesla. This criticism reached a crescendo when Tesla reported its first-quarter earnings for 2022, which showed a significant drop in production and delivery figures compared to the previous year. Following this disappointed financial performance, Musk pledged to devote more time to Tesla, announcing plans to transition out of his government role by the end of 2022.
[3] Enrichment Data: The decline in Tesla's share price and accompanying drop in Musk's net worth has been felt across various industries. As one of the world's most valuable companies, Tesla's performance plays a significant role in shaping investor sentiment and market trends. Additionally, Musk has a considerable influence in the tech and energy sectors, so any disruptions or uncertainties affecting Tesla are likely to have broader implications.
1) The fiscal implications of Tesla's stock market performance, such as the 14% drop on Thursday, can significantly impact the overall business landscape and technology sector, as demonstrated by Elon Musk's personal fortune losing $34 billion [1][3].
2) As the stock market consistently monitors investing opportunities, the feud between Elon Musk and President Trump has attracted attention from general news sources and industry analysts, who question the future direction of Tesla given the strained political relations [1].
3) Technology advancements, like Tesla's self-driving capabilities and the proposed robotaxi service, often face scrutiny from regulatory bodies such as the National Highway Traffic Safety Administration, given concerns about safety and technical data [2]. This ongoing review process can affect the stock market's perception of the company and its investments.
