Investors sold off shares in Tesla on Thursday, as tensions erupted between boss Elon Musk and US President Donald Trump. Shares in the electric car company dropped 14%, wiping out roughly $150bn in market value in one of the worst days in months. The losses were an indication of what might be at stake for Musk, as he breaks with a White House known for wielding the power of government against what it sees as enemies. As the dispute devolved, Trump threatened to cut off government contracts to Musk's companies, including rocket firm SpaceX, which has contracts worth tens of billions of dollars with the government. "Go ahead, make my day," Musk fired back in response to the threat. The stark turn in the relationship between the two men played out live on social media, quickly spiralling from policy disagreements into personal insults. Analyst Dan Ives of Wedbush Securities, a longtime Tesla cheerleader, called it "jaw dropping and a shock to the market", He said the clash had sparked fear among investors about what it might mean for regulation of the company, which is seeking to expand self-driving and robotics and had hoped for a more relaxed regulatory approach under the Trump administration. "This must start to be calmed down," Mr Ives wrote in a note, adding that it "put a fly in the ointment of the Trump regulatory framework going forward". Musk's foray into government has already proven a wild ride for Tesla investors. Shares had surged last year, on hopes his alliance with Trump would benefit the company. But investor sentiment soured this year, as Musk's alliance with Trump and his role leading controversial cuts to government spending proved a lightning rod,sparking backlashandhurting sales, especially inEurope. Investors were also concerned that Musk - who had been fighting for a record-breaking pay package - was not focused on the company. Last month, the head of Tesla's board was forced to publicly deny a report that the company had started to look for someone else to lead the firm. Musk'spledge on an investor callthat he would be stepping back from his role leading Doge had prompted an upswing in the stock. Heformally left the governmentat the end of last month. But Tesla now finds itself back in the political crossfire. The breach with Trump was sparked by Musk's criticism of a Trump-backedspending bill. Musk has sought to rally opposition, arguing that it will add too much the government's debt load. He has also been critical of Trump's tariffs, which he said on Thursday would cause an economic recession in the second half of the year. Trump said Musk's welcome at the White House was wearing thin and accused him of being unhappy about the elimination of a tax credit for electric vehicles, which has been key to Tesla's sales in the US. The two men have also clashed over Trump's decision to withdraw his nomination of Jared Isaacman, a Musk ally, to lead Nasa. Thursday's fall put the company's share price at its lowest level since May, erasing gains that had been made on hopes that Musk would refocus attention on the company. As the two men went at it, investors watched in disbelief. "Can someone please take the phone away from him,"wroteinvestor Ross Gerber, who has been vocal about his concerns about the impact of Musk's politics on Tesla and cut back his holdings. "Tesla is getting destroyed."
Tesla shares tumble as Trump-Musk feud erupts
TruthLens AI Suggested Headline:
"Tesla Shares Plummet Amid Escalating Dispute Between Musk and Trump"
Bbc News
7.6
TruthLens AI Summary
On Thursday, Tesla's shares experienced a significant decline, falling 14% and erasing approximately $150 billion in market value, as tensions escalated between CEO Elon Musk and U.S. President Donald Trump. This dramatic downturn marked one of the company's worst trading days in recent months and highlighted the potential ramifications for Musk, who has been known to clash with the government over policy issues. The feud intensified when Trump threatened to revoke government contracts with Musk's companies, including SpaceX, which has substantial contracts worth tens of billions. Musk's retort, "Go ahead, make my day," underscored the personal nature of their conflict, which quickly devolved from policy disagreements into public insults. Analysts, including Dan Ives from Wedbush Securities, described the situation as shocking and warned investors of the implications for Tesla's future regulatory environment, especially as the company aims to advance its self-driving and robotics initiatives. Ives indicated that the ongoing feud could disrupt the favorable regulatory landscape Tesla had hoped to enjoy under the Trump administration.
The conflict has roots in Musk's criticism of a Trump-supported spending bill, which he argues would exacerbate the national debt. Furthermore, Musk has been vocal against Trump's tariffs, predicting they would trigger an economic recession later in the year. In response to Musk's discontent over the loss of a tax credit for electric vehicles—critical to Tesla's sales—Trump expressed that Musk's standing in the White House was diminishing. Tensions were further inflamed by Trump's withdrawal of a nomination for Musk ally Jared Isaacman to lead NASA. As the stock price plummeted to its lowest levels since May, investor sentiment turned sour, with some, like Ross Gerber, urging that Musk's political engagements are detrimental to Tesla's performance. The episode has left investors concerned about Musk's focus on the company and the potential impact of his political stance on Tesla's future prospects.
TruthLens AI Analysis
Investors reacted sharply to the escalating tensions between Elon Musk and Donald Trump, resulting in a significant drop in Tesla's stock value. The unfolding feud, marked by public insults and threats, has raised concerns about the implications for Tesla's business and regulatory landscape. Such developments indicate a shift in investor sentiment and the potential impact on Musk's companies, particularly regarding government contracts.
Investors' Concerns and Market Reaction
The immediate fallout from the feud was a staggering 14% decline in Tesla shares, equating to a loss of approximately $150 billion in market capitalization. Analysts are interpreting this as a clear signal of investor anxiety over the repercussions of Musk's conflict with Trump, especially in light of Tesla's ambitions in self-driving technology and robotics. The fear is that the conflict could lead to a more stringent regulatory environment, undermining the more favorable conditions that investors had hoped for under Trump.
The Nature of the Dispute
The confrontation began with Trump threatening to revoke government contracts from Musk's enterprises, which include SpaceX, a company heavily reliant on federal contracts. Musk’s retort, "Go ahead, make my day," exemplifies the personal nature of the exchange. The public nature of their disagreement, particularly on social media, reflects a broader trend where corporate leaders engage directly with political figures, often with significant implications for their businesses.
Implications for Tesla and Broader Markets
The turmoil comes at a time when investor confidence in Musk's leadership has been waning due to concerns about his focus on the company amid various controversies. Given Tesla's reliance on government contracts and favorable regulations, the potential for a fallout from this dispute raises alarms about the company's future prospects.
Connection to Broader Trends
This incident is not isolated; it mirrors ongoing tensions in the political landscape where corporate influence and government regulation intersect. Observers may draw parallels with other instances of corporate leaders facing backlash due to their political affiliations or actions. The article implies that Musk's previous close ties with Trump could have provided Tesla with advantages that are now at risk of being lost.
Potential Societal and Economic Effects
The fallout from this feud could have broad implications. If Musk's companies face increased scrutiny or lose government contracts, it might lead to job losses and impact the broader economy. Additionally, this situation could influence investor behavior across the tech and automotive sectors, potentially leading to increased volatility in stock prices.
Target Audience and Community Impact
This news piece likely resonates with investors, analysts, and stakeholders in the technology and automotive sectors. It serves to inform them of potential risks associated with their investments amid political instability. By highlighting the personal feud, it captures attention and incites discussion among those closely following Tesla and Musk's ventures.
Market Influence and Stock Implications
The revelations from this article are particularly pertinent for Tesla's stock and related sectors. Investors will closely monitor developments, as any escalation in the feud could trigger further stock volatility not just for Tesla, but potentially for other companies engaged in government contracts.
Geopolitical Relevance
While the article primarily focuses on a corporate and personal dispute, it reflects broader themes of power dynamics between corporations and government. The implications of such conflicts could resonate beyond the immediate context, influencing perceptions of corporate governance and political alliances.
Use of AI and Language in Reporting
The article appears to be a standard news report, and there are no clear indicators that sophisticated AI models were employed in its writing. The language is straightforward and serves to convey the seriousness of the situation without excessive embellishment. However, the framing of Musk's response and the emphasis on the market reaction suggest a deliberate effort to provoke a response from the audience, highlighting the contentious nature of the feud.
Given the analysis, the news article presents a reliable account of the current situation while raising important questions about the future of Tesla and the broader market context.