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Trump, Donald

Elon Musk's America Party Plan Sparks Backlash, Shares Drop 14%

Strategic Insights

— 2 min read

Elon Musk's plan to launch the America Party has sparked a fresh feud with Donald Trump, sending Tesla shares plummeting 14% in one day. The US president publicly criticized Musk's move, calling it "ridiculous" and claiming that third parties have never succeeded in the US. Musk's decision has also drawn a backlash from Tesla investors, with some expressing a "sense of exhaustion" at his increasing involvement in politics.

Key Takeaways:

  • Tesla shares fell over 14% in one day after Donald Trump publicly criticized Elon Musk's plan to launch the America Party.
  • Musk's decision has sparked a fresh feud with Trump, who has been a long-time ally and supporter of the Tesla CEO.
  • Tesla investors are expressing concerns about Musk's increasing involvement in politics, with some saying it is a distraction from his full-time responsibilities as CEO.
  • The America Party aims to challenge the US "one-party system" and give Americans back their freedom.
  • Musk's announcement has created a conflict with his role as CEO of Tesla, according to investment firm Azoria Partners.
  • Tesla is currently grappling with a sharp fall in sales and growing competition from cut-price Chinese rivals.

Statistics:

  • Tesla shares fell 14% in one day after Trump's criticism of Musk's America Party plan.
  • The value of Tesla was wiped by around $150 billion in one day as a result of the shares plummeting.
  • Tesla shares fell over 5% on the Blue Ocean trading system, which lets investors buy and sell stock before the main US markets open.
  • The America Party has never succeeded in the US, according to Trump.
  • Tesla is facing a sharp fall in sales, which has been blamed in part on a political backlash sparked by Musk's time in government.

Sources:

  • Donald Trump, Twitter post, Sunday (no end date given)
  • "I am saddened to watch Elon Musk go completely 'off the rails', essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States -- The System seems not designed for them."
  • Daniel Ives, Wedbush, Sunday (no end date given)
  • "The decision to start a new party is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story."
  • James Fishback, Azoria Partners, Sunday (no end date given)
  • "The announcement created a conflict with his full-time responsibilities as chief executive of Tesla."
  • Scott Bessent, US Treasury Secretary, Sunday (no end date given)
  • "I imagine that those boards of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities."

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