Tesla shares plunge after billionaire Elon Musk forms new political party

Tesla Stock.jpg

A Tesla store in San Mateo, California, USA

Tesla shares fell more than 7% in pre-market trading on July 7, threatening to wipe about $70 billion off the company's value when Wall Street opened, according to The Guardian.

If this decline occurs, the value of Mr. Musk's shares will evaporate more than $9 billion, to about $120 billion. However, according to Forbes magazine, the CEO of Tesla and SpaceX is still the richest person in the world with a fortune of about $400 billion.

Tesla is now valued at nearly $1 trillion, but its shares are under pressure due to Mr Musk's relationship with President Donald Trump.

Musk’s initial public endorsement of Trump drew a backlash from consumers, but now the increasingly heated rivalry between the two men has investors worried that Musk will be distracted from Tesla or that the White House may punish his businesses.

Mr. Dan Ives, an analyst at Wedbush Securities, said that Mr. Musk's announcement of funding a political party in the US would cause investors to panic.

“Simply put, Mr. Musk’s push into politics and now his attempt to confront the political machine in Washington is the exact opposite of what Tesla investors/shareholders want at this crucial stage in the Tesla story,” Mr. Ives said. He added that Tesla investors — of which Mr. Musk is the largest shareholder — are tired of his refusal to step back from politics.

On July 7, Mr. Trump called Mr. Musk's plan to form an American Party "ridiculous" and continued to attack Mr. Musk.

Over the weekend, Mr. Musk announced the formation of the America Party on the X platform. “When it comes to bankrupting our country with waste and corruption, we live in a one-party system, not a democracy,” he wrote. “Today, the America Party is being formed to give you back your freedom.”

TH (according to VNA)

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