Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
A notable decline in Tesla's stock has been observed, marking a consistent decrease over a period of six trading days. The discord between Tesla's CEO, Elon Musk, and the U.S. President, Donald Trump, has been identified as a significant contributing factor.
On the 1st of the month, according to local time at the New York Stock Exchange, Tesla's stock ended the day with a lower value than that of the previous session. It saw a 5.34% drop, closing at $300.71. This downward trend began on the 23rd of the previous month and has continued through six trading days.
Since Tesla's stock reached $295.14 on the 6th of the prior month, it has experienced fluctuations that threaten to break below the $300 threshold. As a result, the market capitalization has dipped below $1 trillion, now standing at $968.6 billion.
The root of the stock's decline is linked to the strained relationship between Musk and President Trump. Musk has openly criticized a legislative proposal backed by Trump, which aims to repeal environmentally friendly policies and implement significant tax reductions, labeling it as "an insane spending bill."
In reaction, President Trump took to his social media platform, 'Truth Social', to suggest that the government subsidies benefiting Musk's companies should be reduced. He also alluded to the potential curtailment of government contracts, implying that the Department of Government Efficiency (DOGE) might need to intervene in Musk's affairs.
During Trump's second term, Musk had a role in leading budget cuts and restructuring as head of the Department of Government Efficiency. Following the completion of his public service duties, Musk has been vocal in his criticism of Trump's policies.
Analysts point out that if the discord between Musk and Trump evolves from verbal disagreements to tangible actions such as cutting corporate subsidies or reviewing contracts, it could place a substantial strain on Tesla’s future growth prospects and profitability.