Tesla shares fall in premarket trading as Elon Musk's 'America Party' sparks investor worries
shares
fell nearly 7% in premarket trading on Monday after CEO
Elon Musk
's plans to launch a new U.S. political party raised investor doubts about his focus on the electric automaker's future.
The former head of the Department of Government Efficiency (DOGE) unveiled the 'America Party' on Saturday, voicing his displeasure over President Donald Trump's 'One Big, Beautiful Bill'.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Victoria Principal Is Almost 75, See Her Now
The Latest Article
Undo
This further escalates Musk's feud with Trump even as Tesla posted a second straight drop in quarterly deliveries. Their discord over the tax bill erupted into an all-out social media brawl in early June, with Trump threatening to cut Musk's government contracts and subsidies.
"Investors are worried about two things - one is more Trump ire affecting subsidies and the other, more importantly, is a distracted Musk," said Neil Wilson, UK investor strategist at Saxo Markets.
Investors had in May cheered Musk's decision to scale back political spending and remain Tesla CEO for another five years. He had spent nearly $300 million around Trump's re-election campaign last year.
Live Events
"But now (they) are worried he's going to (get) sucked back in and take his eye off Tesla," Wilson said.
The first signs of investor unease surfaced soon after Musk's announcement, with investment firm Azoria Partners delaying the listing of a Tesla exchange-traded fund.
Trump on Sunday called Musk's plans to form the "America Party" "ridiculous", saying the Musk ally he once named to lead
NASA
would have presented a conflict of interest given Musk's
business
interests in space.
TESLA BOARD MOVES
Wedbush analyst Dan Ives, a Tesla bull, said many investors are feeling a "sense of exhaustion" over Musk's insistence on immersing himself in politics.
Azoria Partners CEO James Fishback posted several critical comments on X about Musk's new party, and called for the Tesla board to clarify Musk's political ambitions and evaluate if his political
involvement
is compatible with his obligations to Tesla as CEO.
The new party undermines the confidence shareholders had that Musk would be focusing more on the company, Fishback said.
Musk's latest political move raises questions around Tesla board's course of action. Its Chair Robyn Denholm in May denied a Wall Street Journal report that said board members were looking to replace the CEO.
Tesla's board, which has been criticized for failing to provide oversight of its combative, headline-making CEO, faces a dilemma managing him as he oversees five other companies and his personal political ambitions.
"This is exactly the kind of thing a board of directors would curtail - removing the CEO if he refused to curtail these kinds of activities," said Ann Lipton, a professor at the University of Colorado Law School and an expert in business law.
"The Tesla board has been fairly supine; they have not, at least not in any demonstrable way, taken any action to force Musk to limit his outside ventures, and it's difficult to imagine they would begin now."
Tensions with Trump, struggling sales and an aging vehicle line-up have hurt Tesla's stock, even as the company bets on growth from autonomous vehicles.
The stock, which soared to over $488 in December after Trump's November re-election, has lost 35% since then and closed last week at $315.35.
Tesla is the worst performing stock among "the Magnificent Seven" group of high-growth U.S. companies this year.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
17 minutes ago
- Time of India
Trump Declares 'ECONOMIC EMERGENCY'; Strikes Top Asian Allies Of U.S. With Steep 25% Tariffs
President Donald Trump on Monday placed a 25% tax on goods imported from Japan and South Korea, citing persistent trade imbalances with the two crucial U.S. allies in Asia. Trump provided notice of the tariffs to begin on Aug. 1 by posting letters on Truth Social that were addressed to the leaders of both countries. The letters warned both countries to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs. 'If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,' Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. Read More
News18
21 minutes ago
- News18
Epstein Was 'Not Murdered' Trump Administration Debunks Theories, MAGA Stunned, Musk Mocks
President Donald Trump's Justice Department and FBI have concluded they have no evidence that convicted sex offender and disgraced financier Jeffrey Epstein blackmailed powerful figures, kept a "client list" or was murdered. The MAGA movement erupted in disbelief over the news. Their distrust of the "deep state" sparked years of conspiracy theories over Epstein's suicide in prison. Meanwhile Elon Musk trolled President Trump with a post knocking the administration for making no arrests related to the Jeffrey Epstein Trump's former ally-turned-foe, posted an image to his social platform X of 'The Official Jeffrey Epstein Pedophile Arrest Counter,' set to '0000.' n18oc_world n18oc_crux
Time of India
21 minutes ago
- Time of India
Can't allow weaponisation of critical minerals: PM Modi at Brics
PM Modi at Brics NEW DELHI: Brics countries should work to make supply chains for critical minerals and technology secure and reliable, so that no country can use these resources for its own "selfish gain or as a weapon" against others, said PM Narendra Modi at the Rio summit. The remarks are significant as they come at a time the global community is grappling with China's dominance of critical minerals. Quad recently announced a critical minerals initiative to secure and diversify supply chains to prevent any economic coercion or price manipulation. Modi was speaking in the presence of Premier Li Qiang who represented China at the summit in the absence of President Xi Jinping . In April this year, amid a raging trade war with the US, China suspended export of some rare earth minerals sparking global concerns about its impact on advanced technology and security industries. The call for ensuring secure and reliable supply chains was one of the suggestions the PM made at the Brics session on strengthening multilateralism, economic issues and AI to turn the grouping into a guide for the multipolar world in the future. He said Brics' diversity and multipolarity is its greatest strength. Strengthening internal systems like the Brics New Development Bank (NDB) that would lend more credibility to the call for reformed multilateralism, collaboration in agricultural research for the benefit of Global South, creation of a Brics Science and Research Repository, and ensuring responsible AI were some of the other suggestions made by Modi in his address. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Why seniors are rushing to get this Internet box – here's why! Techno Mag Learn More Undo The PM underlined that the NDB must follow demand "driven principle and long-term sustainability" for granting projects. "Global standards must be created that can verify the authenticity of digital content, so that we can identify the source of the content and maintain transparency and prevent misuse," said Modi, adding that India will organise an AI Impact Summit next year for improved cooperation between all countries. Modi said at a time when the global community faced uncertainty and challenges, the relevance of Brics was evident. "Global South has many hopes from us. To fulfil them, we must follow the principle of 'Lead by Example'. India is fully committed to working shoulder-to-shoulder with all our partners to achieve our common goals," Modi said. Addressing another session on climate, Modi said that under India's Brics presidency next year, the Indian govt will work to define Brics in a new form. "Brics will mean - Building Resilience and Innovation for Cooperation and Sustainability," he said, adding that for India, climate justice is no alternative but a moral duty. He underscored India's position that without tech transfer and affordable financing for countries in need, climate action will remain confined merely to climate talks.
