Recent announcement by Elon Musk regarding the formation of the 'America Party' has triggered a significant drop in Tesla shares during pre-market trading. Investors express concerns about the potential impact of political involvement on the company’s business.
Elon Musk and His New Political Party
Elon Musk announced the formation of a new political party called 'America', marking a significant step in his political career. He criticized recent tax and spending legislation signed by Donald Trump as fiscally irresponsible. Musk stated that the new party would focus on select elections to ensure voting reflects 'the true will of the people'.
Trump's Reaction to Musk's Announcement
President Donald Trump swiftly and harshly criticized Musk's political initiative, calling it 'ridiculous'. Trump emphasized that third parties have never succeeded in the U.S. Furthermore, he voiced displeasure over government subsidies and contracts needed for Tesla and SpaceX.
Impact of Political News on Tesla Shares
Following the announcement of the 'America Party', Tesla shares fell 6.77%, equating to a drop of $21.35 from the previous close. Investors express concerns that Musk’s political activity could distract him from managing the company, negatively impacting Tesla's business, especially in the context of increasing competition in the electric vehicle market.
Elon Musk's claims regarding the creation of the 'America Party' led to a significant decline in Tesla shares, emphasizing growing investor concerns over the possible impact of his political activities on the company's business.
