Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
There has been a notable downturn in Tesla’s stock, as it has been on a downward trajectory for six straight trading days. This decline is intricately connected to an ongoing dispute involving CEO Elon Musk and U.S. President Donald Trump, which has been identified as a significant contributing factor.
On the first day of the month, as recorded in the New York Stock Exchange, Tesla’s stock ended the trading session on a lower note compared to the previous day, with a drop of 5.34%, bringing the price down to $300.71. This downward trend, which initially began on the 23rd of the previous month, has persisted for six consecutive trading sessions.
Since the 6th of last month, when Tesla's stock registered at $295.14, there has been a looming concern regarding the stock's potential to fall below the $300 mark. This recent decline has now resulted in the company’s market capitalization falling below the $1 trillion mark, specifically to $968.6 billion.
The root of this downturn can be traced back to the friction between Musk and President Trump. Musk has openly criticized a legislative proposal championed by Trump, which aims to dismantle eco-friendly initiatives and introduce significant tax reductions, labeling it as a “mindless spending bill.”
In retaliation, President Trump took to his social media platform, 'Truth Social,' to suggest that the government subsidies allocated to Musk's enterprises should be curtailed. He further alluded to the potential of reducing government contracts with Musk's companies by humorously suggesting that "perhaps the Department of Government Efficiency (DOGE) should take over Elon."
During Trump’s second term, Musk had spearheaded efforts to cut spending and restructure within the Department of Government Efficiency. After completing his special public service role, he became vocal in his opposition to Trump’s policy directions.
Analysts caution that if the quarrel between Musk and Trump escalates beyond verbal sparring to tangible actions such as reducing corporate subsidies or re-evaluating contracts, it could pose a significant threat to Tesla’s future growth prospects and its profitability.