Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
Tesla's shares have witnessed a consistent and significant drop, marking a continuous decline over the course of six trading days. At the heart of this slump is the conflict involving Elon Musk and the U.S. leader, Donald Trump, which has been pinpointed as a pivotal factor contributing to the plummeting stock value.
On the first of the month, when the New York Stock Exchange closed its doors, Tesla's share price was seen to dip lower than it had been at the close of the previous trading session, tumbling by 5.34% to settle at $300.71. The decline, which originated on the 23rd of the preceding month, persisted through six consecutive trading days, painting a worrying picture for investors.
Since reaching a value of $295.14 on the 6th of the previous month, Tesla's stock has continuously flirted with a precarious threshold, threatening to fall below $300. This has resulted in a market capitalization that has dwindled to $968.6 billion, slipping below the iconic $1 trillion mark.
The friction between Musk and Trump is rooted in a legislative dispute. Musk has been vocally critical of a legislative proposal championed by Trump that seeks to dismantle environmentally-friendly support measures and introduce sweeping tax reductions. Musk derided this initiative, describing it as a "crazy spending bill."
In a swift response, Trump countered on his social media platform, 'Truth Social', by expressing that the subsidies awarded to Musk's companies should see a reduction. He also implied the possibility of curtailing government contracts, suggesting, "We might need the Department of Government Efficiency (DOGE) to take over Elon."
Elon Musk, who once spearheaded cost-cutting and restructuring efforts as the head of the Department of Government Efficiency during Trump's second presidential term, has openly criticized Trump's policies following the conclusion of his special public service stint.
Industry experts have weighed in, positing that if the clash between Musk and Trump escalates beyond verbal disputes to tangible actions like the curtailment of corporate subsidies or a reassessment of contracts, it could pose a direct threat to Tesla's potential for growth and its profitability in the future.