Trump and Musk’s Feud Affects Tesla’s Stock
The long-standing conflict between President Donald Trump and billionaire Elon Musk intensified on Thursday, resulting in a significant drop of over $150 billion in Tesla’s stock valuation.
This turmoil followed Musk’s criticism of a GOP-backed spending bill supported by Trump, which provoked a sharp reaction from the president. The situation has raised alarms about political risks now associated with one of the world’s top companies.
“This is a huge disaster for both Tesla and SpaceX,” commented Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, when discussing the situation with Yahoo Finance. “And, whether Elon wants to admit it or not, he played a role in getting Trump elected. It’s essentially his fault that Trump is President.”
However, stocks made a comeback on Friday, gaining about 6% in mid-afternoon trading after Musk and Trump seemed to ease the tension. Yet, Gerber cautioned, “I think this is merely the beginning. A lot of the stock’s value isn’t grounded in the actual business.”
The connection between Trump and Musk became more prominent during last year’s campaign. Musk endorsed Trump shortly after a failed assassination attempt in Pennsylvania. Since then, he has often appeared at rallies, showing support for the Republican Party and committing millions to the American PAC, a super PAC linked to Trump.
Following Trump’s election, Musk was appointed to lead the newly established Office of Government Efficiency, tasked with cutting government waste. He announced his departure from the role last month, revealing that the agency had saved billions.
Yet, just days later, Musk shifted his stance, criticizing Trump’s controversial tax policies, which eliminate the electric vehicle tax credit vital for Tesla. Gerber noted this could deal a “death blow” to the company’s sales. After passing the House, the bill is now moving to the Senate, with Trump promising to sign it by July 4th.
For more details and a timeline of events, read further below.
