Tesla Stock Plummets 14% Amid Escalating Feud Between Elon Musk and Donald Trump
Tesla's stock price plummeted by over 14% in a single day, resulting in a staggering loss of over $150 billion in market value, its worst single-day performance since March 10. This drastic decline was triggered by the escalating public feud between Tesla CEO Elon Musk and President Donald Trump. The spat began when Trump expressed his disappointment with Musk on social media, threatening to terminate government subsidies and contracts awarded to Musk's companies, including Tesla. Musk swiftly responded by expressing his support for impeaching Trump and criticizing his tariff policies, which he believes will lead to an economic downturn in the United States.
6 June 2025
The war of words between the two has significant implications for Tesla and Musk's other business ventures, including SpaceX and Starlink. With Tesla's stock price already under pressure, the company's valuation is facing a re-pricing process. The market is concerned that the loss of government subsidies and contracts could have a major impact on Tesla's bottom line, with some analysts estimating that the company's annual profit could face pressure of up to $3.2 billion if the subsidies are terminated. Additionally, Musk's criticism of the government spending bill, which he deemed "sickening," was seen as a turning point in the feud, further straining his relationship with Trump.
The feud has sent shockwaves through the tech industry, with other popular tech stocks, such as Apple and Nvidia, also experiencing significant declines. The Philadelphia Semiconductor Index, which tracks the performance of semiconductor stocks, fell by 0.44%. The US stock market closed lower, with the Dow Jones Index falling 0.25%, the Nasdaq Composite Index plummeting 0.83%, and the S&P 500 Index declining 0.53%. The decline in tech stocks was partly attributed to the escalating feud between Musk and Trump, which has weighed on investor sentiment, contributing to the sell-off in tech stocks.
Despite the turmoil, Musk remains confident in Tesla's future development, looking forward to the company's long-term growth prospects. However, the current market situation and political factors affecting Tesla require close attention. The company's city value evaporated by over $1.09 trillion, approximately 1525 billion dollars, in a single day, the largest single-day decline since 2020. The ongoing feud between Musk and Trump is likely to lead to further disclosures and power struggles, with more "big melons" being exposed, as the Chinese saying goes.
As the situation continues to unfold, it remains to be seen how this will play out for Tesla and its stakeholders. One thing is certain, however: the drama between Musk and Trump is far from over, and the world will be watching with bated breath as these two larger-than-life figures continue to clash. In the long run, this may ultimately prove to be a beneficial development for Tesla, as Musk prioritizes sustainable growth over short-term gains. Nevertheless, the immediate impact of the feud on Tesla's stock price and the tech industry as a whole is a pressing concern, with investors eagerly awaiting key economic data, including the non-farm payroll report, to gauge the market's near-term trajectory.
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