Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
The noticeable drop in Tesla's stock over the past six trading days is largely attributed to the friction between CEO Elon Musk and President Donald Trump. This suggests that their conflict is having tangible effects on the company's market performance.
As observed on the 1st of the month, Tesla's shares concluded the session on the New York Stock Exchange at a lower value than the prior day, specifically a 5.34% decrease to $300.71. This ongoing decline, beginning on the 23rd of the preceding month, underscores a persistent downward trend.
Tesla's stock, which previously reached $295.14 on the 6th of last month, has experienced further depreciation. The recent closing price indicates a potential threat to the $300 threshold, reducing the company's market valuation below $1 trillion, specifically to $968.6 billion.
The tension between Musk and Trump primarily involves Musk's harsh criticism of a legislative initiative championed by Trump. This bill, which proposes eliminating eco-friendly subsidies and introducing significant tax cuts, was described by Musk as a "crazy spending bill."
In retaliation, Trump took to the social media platform 'Truth Social' to suggest a cutback on government subsidies that Musk's enterprises benefit from. He hinted at potential contractions in government contracts by suggesting the Department of Government Efficiency (DOGE) might need to manage Musk's affairs.
Previously, Musk oversaw cost reductions and organizational restructuring as the leader of the Department of Government Efficiency during Trump's second term. After completing this stint of public service, Musk openly criticized Trump's policy decisions.
Analysts suggest that should the Musk-Trump discord escalate from verbal clashes to tangible actions like cutting corporate subsidies or reviewing contracts, Tesla's future growth prospects and profitability could face significant threats. This indicates the potential for broader financial challenges for the company.