Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
The value of Tesla's shares has experienced a notable decline, dropping for six trading days in a row. At the heart of this dip lies the discord between Elon Musk and Donald Trump, which appears to be a significant driver of this downward trajectory.
On the 1st of the month, as trading came to a close at the New York Stock Exchange, Tesla's stock finished at a lower price than the preceding day, falling by 5.34% to settle at $300.71. This downturn, which initiated on the 23rd of the previous month, has now persisted across six straight trading days.
Following a high of $295.14 on the 6th of last month, Tesla's shares have now dipped below the $300 threshold. This drop has consequently decreased the company's market capitalization to $968.6 billion, pulling it below the monumental $1 trillion mark.
The root of this decline can be traced back to tensions between Musk and Trump. Musk has been openly critical of a legislative bill pushed by Trump, which proposes the repeal of existing eco-friendly support initiatives alongside extensive tax reductions. Musk has dismissed the bill as a "crazy spending bill."
In retaliation, Trump took to his social media channel 'Truth Social' to respond, suggesting that the subsidies provided to Musk’s enterprises should be curtailed. He even hinted at potentially revisiting government contracts, quipping about the need for a reshaped Department of Government Efficiency, or DOGE, to intervene in dealing with Elon.
Previously, Musk had spearheaded efforts to reduce spending and implement restructuring as the head of the Department of Government Efficiency during Trump’s second term. After completing this special public service assignment, Musk had openly criticized Trump’s policies, underscoring his critical viewpoint.
Industry analysts speculate that if the friction between Musk and Trump escalates beyond mere verbal sparring into actual reductions of corporate subsidies or reevaluations of government contracts, it could pose a significant threat to Tesla's growth prospects and profit margins.