Tesla's stock has taken a significant hit, dropping 40% from its peak as investors react to Elon Musk's visible involvement in Donald Trump's administration. Initially, shares surged 84% following the election due to expectations of Musk's influence, but investor confidence waned as Musk's controversial policies and his approach to government efficiency led to dissatisfaction. This decline underscores not only the backlash against Musk's political role but also increased competition faced by Tesla from global automakers, particularly in China and Europe, which is affecting sales performance and stock value.
Many investors likely figured Musk would be a more traditional 'behind the scenes' kind of adviser, not necessarily taking an active role in enacting controversial policies.
The drop in share price probably reflects the concern that Musk has been much a more visible - and polarizing - figure in the Trump administration.
Whether it’s one problem or a myriad of problems causing the slump, however, it is clear now that Tesla’s sales woes are dragging the stock price down, too.
Shares tumbled 40% from their peak through Wednesday’s close, losing more than a third of their value just since Trump took office.
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