A Historic Market Drop
On June 5, 2025, Tesla’s stock experienced its most significant single-day decline in history, plummeting over 14% and erasing approximately $152 billion from the company’s market capitalization. This sharp drop was triggered by a public feud between CEO Elon Musk and President Donald Trump, leading to widespread investor concern and a massive sell-off of Tesla shares.
The Catalyst: The ‘One Big Beautiful Bill’
The conflict ignited when Musk criticized Trump’s comprehensive legislative package, known as the “One Big Beautiful Bill,” which includes substantial tax cuts and spending increases projected to add $2.4 trillion to the national debt. Musk labelled the bill a “disgusting abomination,” expressing concerns over its potential economic repercussions.
Trump’s Retaliation
President Trump responded by expressing disappointment in Musk and suggesting a review of the federal contracts held by Musk’s companies, including SpaceX and Starlink. The President’s remarks signalled a significant rift between the two former allies, who had previously collaborated closely on various initiatives.
Investor Reaction
The market reacted swiftly to the escalating tensions. Tesla’s stock price fell to its lowest level since October 2024, marking a 45% decline from its peak in December 2024. Analysts attributed the downturn to concerns over Musk’s political entanglements and their potential impact on Tesla’s operations and reputation.
Political Fallout
The feud between Musk and Trump has broader political implications. Musk, a significant financial supporter of Trump’s 2024 campaign, had been appointed to head the Department of Government Efficiency (DOGE), tasked with implementing cost-cutting measures across the federal government. His involvement in controversial policies and public disagreements with the administration have raised questions about his influence and the potential conflicts of interest affecting his business ventures.
Public Backlash
The dispute has also sparked public protests under the “Tesla Takedown” movement, with demonstrators organizing rallies at Tesla dealerships across the United States. Protesters are voicing opposition to Musk’s political activities and their perceived negative impact on the company’s image and values.
Looking Ahead
As tensions between Musk and Trump continue to unfold, the future of Tesla’s stock remains uncertain. Investors are closely monitoring developments, with many expressing concerns over the company’s leadership and its ability to navigate the complex intersection of business and politics.
The ongoing feud underscores the challenges faced by high-profile CEOs who engage in political activities, highlighting the potential risks to shareholder value and corporate reputation.
Leave a Reply