Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
The precipitous fall in Tesla's stock price was notably observed on the first day of the month, in the bustling environment of the New York Stock Exchange. On this date, the stock took a hit, closing at a value of 300.71 dollars, marking a 5.34% decrease from the previous trading day. This decline, which initially began on the 23rd of the previous month, has persisted, drawing the attention of market watchers who fear the continuation of this trend.
Previously, Tesla's stock had achieved a noteworthy milestone, reaching $295.14 on the 6th of the prior month. However, the persistent downward spiral has threatened to push the stock below the critical $300 mark, with the company's market capitalization dropping below the much-coveted $1 trillion threshold, now standing at 968.6 billion dollars.
At the core of this financial instability is the friction between Elon Musk and Donald Trump. Musk has been outspoken in his opposition to a legislative bill championed by Trump, which proposes the dismantling of eco-friendly initiatives and substantial tax reductions. He has branded the bill as "an insane expenditure plan," reflecting his disdain for the proposed measures.
In a swift counter-move, Trump wielded the power of his platform, 'Truth Social,' to issue a retort, suggesting that the government aid funneled into Musk's enterprises should be curtailed. He further intimated that government contracts could also face scrutiny, hinting at a possible intervention from a so-called "Department of Government Efficiency (DOGE)" that might oversee Elon Musk's operations.
Musk, who previously spearheaded cost-cutting and restructuring efforts during his tenure at the Department of Government Efficiency in Trump's second administration, has been vocal in his criticism of Trump's policies since concluding his special public service role. His history of advocating for reduced spending provides a context for his current stance against Trump's legislative agenda.
Industry experts are weighing in on the situation, suggesting that should the discord between Musk and Trump escalate from verbal exchanges to tangible actions like subsidy reductions or contract reassessments, Tesla's prospects for growth and profitability could face significant challenges. The continuation of this conflict poses uncertainties that could potentially impact the company's future trajectory.
Experts analyze that "if the conflict between Musk and Trump extends beyond mere verbal exchanges to the reduction of corporate subsidies or contract reviews, it could directly burden Tesla's future growth and profitability."