Tesla falls for six consecutive trading days... Impact of Musk-Trump conflict
Marking a significant downturn, Tesla's shares have been on a downward spiral for six straight trading sessions. The root of this stock depreciation is largely attributed to the contentious relationship between Elon Musk, Tesla's visionary leader, and Donald Trump, the former President of the United States.
On the first day of the month, in the bustling environment of the New York Stock Exchange, Tesla's shares ended the day at a lower value compared to the previous day, plummeting by 5.34% to settle at $300.71. This slump is part of a longer trend that began on the 23rd of the prior month, marking six continuous days of declines.
Since Tesla's stock reached $295.14 on the 6th of the previous month, its value has teetered on the brink of breaking below the $300 threshold. As of the last closing price, the market capitalization has dwindled to $968.6 billion, falling short of the $1 trillion benchmark.
The stock’s downtrend can be traced back to the ongoing friction between Musk and Trump. Musk has been openly critical of a legislative initiative championed by Trump, describing it as a "deranged expenditure bill," which aims to dismantle eco-friendly incentives and implement large-scale tax reductions.
Trump, in a counter-move, took to his favored social media platform 'Truth Social,' suggesting a reduction in government subsidies benefiting Musk's enterprises. He alluded to possibly curtailing government contracts, humorously suggesting, "Perhaps the Department of Government Efficiency (DOGE) needs to step in on Elon."
Musk, who once spearheaded spending cuts and organizational restructuring as the head of the Department of Government Efficiency during Trump’s second term, has been vocally opposed to Trump's policy directions since his tenure in this public service role concluded.
Analysts speculate that should the Musk-Trump conflict evolve beyond verbal disagreements into tangible actions like cutting corporate subsidies or reevaluating contracts, it could pose serious threats to Tesla's future growth prospects and its profitability margins.