On the evening of July 7 (Vietnam time), Tesla shares fell 8% to below $290/share. Tesla's capitalization dropped sharply to $910 billion.
Tesla shares fell sharply at the beginning of the session on July 7, causing the assets of the world's richest billionaire Elon Musk to decrease by more than 12 billion USD in one session, down to 392.8 billion USD.
Tesla shares were immediately impacted after Elon Musk announced on July 5 that he would form the "America Party" to protest the "Big, Beautiful" (3B) super law of the Donald Trump administration, which was just passed by the US House of Representatives.
Elon Musk believes that this super law will bankrupt the US. Many organizations estimate that 3B will increase the US public debt by nearly $4,000 billion over 10 years. The Congressional Budget Office (CBO) estimates that the budget deficit will increase by $3,400 billion.
Billionaire Musk said the “America Party” would aim to take Republican seats in the US Congress in next year’s midterm elections. However, Musk’s return to politics has not been well received by many investors.
Tesla shareholders want Musk to stay out of politics , especially after his time at the Department of Government Efficiency (DOGE), which many say damaged the automaker's brand, CNBC reported.
Tesla shares have been on a tear since late October 2024, when Elon Musk stepped up his campaigning for Donald Trump. The stock peaked at nearly $480, bringing Tesla’s market capitalization to $1.5 trillion in mid-December after Trump won the election on November 15.
However, Tesla shares fell sharply as Musk became more involved in politics, hitting a low of $220 in early April. After Musk left DOGE in May, the stock price rebounded, reaching nearly $370 per share at one point.
The tech billionaire's return to politics is making investors nervous.
Dan Ives, director of global technology research at Wedbush Securities, noted on July 6 that Musk's deeper involvement in politics and now confrontation with the government is the complete opposite of what Tesla investors/shareholders want him to do.
Many Tesla investors feel exhausted as Musk continues to venture into politics, said Dan Ives.
Elon Musk's previous political activities have earned him praise from Mr. Trump, however, the billionaire's new moves have angered the current US President.
Elon Musk and Mr. Trump have clashed on a number of policy areas, including Mr. Trump’s spending bill, which Musk said would increase the US debt burden. Musk has specifically opposed cuts to tax credits and subsidies for solar, wind power and electric vehicles.
On July 6, Mr. Trump shared on the social network Truth Social, calling Musk's move to form a political party "absurd" and saying that the Tesla boss had "completely gone off the rails."
Musk is facing more than just political turmoil. Tesla just reported second-quarter vehicle deliveries that fell short of expectations, down 14% from the same period last year. Tesla faces increased competition, especially in its key market of China.
Investment firm Azoria Partners announced on July 5 that it was postponing the listing of the Azoria Tesla Convexity exchange-traded fund (ETF), after Tesla CEO Elon Musk announced the formation of a new political party in the United States. Previously, Azoria planned to launch a Tesla ETF, which invests in the electric car company's shares and options, during the week of July 7-11.
Azoria CEO James Fishback criticized Musk's new party and reiterated his support for US President Donald Trump. Fishback also asked the board to meet immediately and ask Elon to clarify his political ambitions and assess whether they are compatible with his full-time responsibilities as Tesla CEO.
Source: https://vietnamnet.vn/co-phieu-tesla-giam-8-sau-khi-elon-musk-tuyen-bo-thanh-lap-dang-nuoc-my-2419154.html
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