Tesla’s Market Value Drops by $68 Billion Following Musk’s Political Party Announcement
Tesla’s stock took a significant hit, plummeting nearly 7% on Monday. This resulted in a loss of over $68 billion in market value. The cause? CEO Elon Musk’s announcement of his plans to form a new political party, dubbed the “America Party.”
This unexpected move sparked an immediate backlash from investors. Many have grown weary of Musk’s political involvement, which they perceive as a negative influence on Tesla’s business performance.
Musk outlined that the party’s focus would be on securing “2 or 3 Senate seats and 8 to 10 House districts.” His goal is to serve as a deciding vote on contentious legislation.
Not everyone is on board with Musk’s political venture. President Donald Trump was quick to voice his criticism, calling the move “ridiculous” and stating that the Tesla CEO had gone “completely off the rails.”
Analysts are warning that Musk’s renewed political engagement comes at a crucial time for Tesla. The company reported a 14% year-on-year decline in car deliveries in the second quarter. Furthermore, it faces increasing competition in key markets like China.
Dan Ives of Wedbush Securities noted the impact on Tesla’s investors. He stated that “many Tesla investors” are experiencing “exhaustion” from Musk’s continued political involvement. They view it as a distraction from the company’s core business.
Source: CNBC