Tesla stock price plunges as Trump suggests stripping Elon Musk’s companies of federal contracts

Tesla experienced a sharp decline in its stock value on Thursday amidst a public feud between CEO Elon Musk and President Trump. The dispute escalated as Mr. Trump hinted at the possibility of revoking federal contracts awarded to Musk’s companies. This led to Tesla’s shares plummeting by 18% in intraday trading, marking the steepest selloff in nearly five years. The stock eventually closed down 14.3%, resulting in a loss of $151 billion in market value.

The contentious exchange between Musk and Mr. Trump unfolded on social media, with Musk criticizing the government’s tax and spending bill while Mr. Trump retaliated by suggesting the termination of Musk’s governmental subsidies and contracts. Musk’s companies, including SpaceX, heavily rely on federal contracts, with SpaceX alone receiving close to $20 billion in federal funding since 2008. This threat of contract withdrawal has cast a shadow of uncertainty over Tesla investors, according to tech analyst Dan Ives.

The public spat between Musk and Mr. Trump has escalated tension, with both parties refusing to back down. Musk, in response, took to social media to question the representation of the majority in American politics, hinting at the need for a new political party that aligns with the views of the middle 80%.

The clash between these influential figures has sent shockwaves through the financial market, raising concerns about the stability of Musk’s companies and their future prospects. The ongoing feud between Musk and Mr. Trump highlights the power dynamics at play between government entities and private corporations, underscoring the potential impact of political disputes on the business environment. As Tesla navigates through this challenging period, investors and stakeholders are closely monitoring the developments to assess the implications on the company’s operations and financial performance.

As the fallout from this public feud continues to unfold, the repercussions on Tesla’s stock value and market standing remain uncertain. The clash between Musk and Mr. Trump serves as a stark reminder of the intersection between politics and business, emphasizing the delicate balance that companies like Tesla must maintain in navigating through turbulent waters.