Tesla, the renowned electric car manufacturer, finds itself once again in the spotlight, but this time, the attention is not positive. The company’s stocks plummeted by nearly 7% in pre-market trading after its founder, Elon Musk, revealed plans to establish a new political party: the American Party. As Wall Street prepared to open, Tesla’s shares were trading at $315.35, marking a significant 6.61% drop compared to the previous Thursday. The market was closed on Friday for the Independence Day holiday in the United States, adding to the anticipation surrounding Tesla’s performance.
The intersection of politics and business has not been kind to Tesla, particularly following Elon Musk’s public falling out with former President Donald Trump. While Tesla’s stocks initially surged during Trump’s presidency, thanks to Musk’s vocal support of his campaign, the relationship soured over time. The stock has since experienced a 20% decline over the past six months, reflecting investor concerns about Musk’s shifting political alliances.
“The actions of Tesla are likely to face pressure as investors worry about the implications if Trump and the Republican Party now view Musk more as an enemy than a friend,”
noted analysts from Wedbush, as reported by Investing. Musk, a South African entrepreneur, announced the formation of a new political party, seen by many as a clear sign of his disillusionment with Donald Trump. Initially an advisor to Trump on streamlining bureaucracy during the early months of the president’s second term, Musk distanced himself from the administration due to his opposition to the massive fiscal package recently passed by Congress – a move he deemed wasteful.
Following a poll on his platform on Independence Day, where over 1.2 million users participated, Musk announced the overwhelming support for a new political party, with 65.4% in favor of a third party. This led to the formalization of the “American Party,” aimed at challenging the existing political landscape and restoring what Musk perceives as true democratic values. In Musk’s words,
“When it comes to ruining our country with waste and corruption, we live in a one-party system, not a democracy. Today, the American Party is formed to restore your freedom.”
In response to Musk’s political ambitions, President Donald Trump took to his Truth Social account to criticize the tech mogul, accusing him of going off the rails in recent weeks. Trump expressed dismay at Musk’s pursuit of creating a third political party, dismissing the idea as a source of chaos and disruption. He lamented Musk’s perceived lack of control, stating that founding a third party in the U.S. historically has not yielded success, suggesting that the system is not conducive to such endeavors.
The clash between Musk and Trump underscores the growing influence of tech leaders in the political arena and the potential ramifications for both the business and political landscapes. Musk’s foray into party politics reflects a broader trend of corporate figures leveraging their platforms to shape political discourse and potentially disrupt traditional power structures.
As Tesla’s stocks continue to fluctuate in response to Musk’s political maneuvers, the market remains attentive to how this intersection of business and politics will unfold. The evolving dynamics between Musk, Trump, and the broader political landscape underscore the complexities and uncertainties that arise when influential figures navigate the realms of business and governance.
In conclusion, the saga of Tesla’s stocks in the wake of Elon Musk’s political ambitions serves as a compelling narrative of the intricate dance between business, politics, and personal ideologies in today’s interconnected world. As Musk charts a new course with the American Party, the repercussions on Tesla’s market performance and the broader political landscape are yet to fully unfold, leaving investors and observers alike on edge, anticipating the next chapter in this unfolding drama.
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