3 days ago
Concerned about your Tesla shares? You're not alone
US President Donald Trump (L) and Elon Musk.
Photo:
Alex Wroblewski and Allison ROBBERT / AFP
Tesla investors are feeling the impact of the fallout of US President Donald Trump's dispute with former BFF Elon Musk.
Last week,
a public feud erupted
between Trump and Tesla chief executive Musk.
Trump confirmed their relationship has soured, and Musk repeatedly blasted the president's sweeping domestic agenda bill in recent days. A public fight on social media on Thursday involved Musk claiming Trump would not have won without his support.
That same day,
Tesla shares (TSLA) plummeted 14 percent
. The selloff erased about US$152 billion (NZ$252 billion) from Tesla's market value and US$34 billion (NZ$56.4 billion) off Musk's net worth, according to the Bloomberg Billionaires Index.
Investors worried that US government approval for Tesla's self-driving cars might not be so easy to achieve, and that the relationship with Trump, and then the split, could have turned off first Democrat and then Republican car buyers.
Chief strategy officer at Tiger Brokers Greg Boland said there was an opportunity for investors who did not own Tesla shares to buy at a reduced price, if they still believed in the company's prospects.
"It's been a very, very volatile stock over the last year, one of the most volatile. In the S&P 500 year to date it's still down around 23 percent, but at one stage it was down 48 percent."
He said whether it recovered would depend on how the company performed. If Robotaxis were successful, it could boost the share price, but if there were problems, it could fall further.
"But people who are shareholders of Tesla must be wondering, in some ways why they still hold it when the stock is so volatile, but also the CEO is so volatile."
Sharesies investments lead Gus Watson said investors were riding out the Tesla volatility.
"Trading in recent days has shown a slight net-selling trend by value, whilst the total number of investors month on month remains steady."
Trump has also threatened the contracts the US government has with another Musk business, SpaceX.
Boland said Rocket Lab stood to benefit from that. "Rocket Lab is up two-and-a-half percent today."
He said the Rocket Lab share price had drifted up from as low as about US$16 in April to almost US$30.
"It's nearly doubled over that time ... It's getting more and more good contracts out of the US."
Devon Funds head of retail Greg Smith said the idea that dwindling fortunes for the much bigger SpaceX could boost Rocket Lab had merit.
"Rocket Lab is growing at a faster rate from a lower base.
"SpaceX is heavier payloads, but Rocket Lab could be a challenger here in the medium size (and to the Falcon 9) with the Neuron rocket set to launch later this year."
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