Tesla Inc. shares slid more than 3% on Monday as investors reacted to CEO Elon Musk’s announcement that he is forming a new political party in the United States, deepening his rift with former President Donald Trump.
The dip in Tesla’s stock was first observed in Frankfurt trading, with further declines expected when U.S. markets reopen after the Independence Day holiday.
Veteran tech analyst Dan Ives of Wedbush told Reuters that Musk’s political aspirations may be distracting investors. “Tesla needs Musk focused as CEO—not engaging in another political adventure, especially one that alienates key political figures like Trump,” Ives said.
Musk’s proposed party, dubbed the “America Party,” drew sharp criticism from Trump, who called the idea “ridiculous” and accused Musk of potential conflicts of interest, particularly regarding NASA contracts and his private space ventures.
Analysts speculate that the Tesla board may intervene if Musk’s political moves threaten shareholder value. “If this continues, it wouldn’t be surprising to see Tesla’s board step in,” Ives added.
