Tesla Inc.’s stock price plummeted by 6.79% on Monday, resulting in a staggering loss of over $68 billion in market capitalization. This significant drop came after CEO Elon Musk announced plans to launch a new political party, sparking investor anxiety and criticism.
Background
The announcement of Musk’s new party, dubbed the “America Party,” has intensified worries about his increasing involvement in politics. This trend has previously unsettled investors, who are concerned about the potential effects on Tesla’s brand and business.
Reaction from Donald Trump
President Donald Trump, who had initially praised Musk’s political activities, has since turned to criticism. Trump labeled Musk’s party formation as “ridiculous” and accused him of going “completely off the rails.” The two have clashed over various policy issues, adding to the uncertainty surrounding Tesla’s future.
Industry Response
Musk’s return to politics has drawn criticism from industry veterans, including Ross Gerber, co-founder of Gerber Kawasaki, and Dan Ives, from Wedbush Securities. They have questioned Tesla’s Board of Directors and criticized Musk’s political re-entry, citing concerns about the potential impact on the company’s stock price.
Additional Challenges
Tesla’s stock has also been affected by other factors, including a sharp drop in sales in the Chinese domestic car market during the first week of July. Despite strong second-quarter deliveries, this decline has added to the challenges facing the company.
Key Takeaways
- Tesla Inc.’s stock price dropped by 6.79% on Monday, resulting in a loss of over $68 billion in market capitalization.
- Elon Musk’s announcement of a new political party, the “America Party,” has sparked investor anxiety and criticism.
- The company faces additional challenges, including a decline in sales in the Chinese domestic car market.
- Industry veterans have questioned Tesla’s Board of Directors and criticized Musk’s political re-entry.
What’s Next for Tesla?
As the company navigates these challenges, investors will be closely watching for any developments that may impact Tesla’s stock price. With Musk’s political ambitions and the company’s sales performance in key markets, the future of Tesla remains uncertain.