Shares in Tesla fell 7.5% in early US trading on Monday, wiping $76bn (£56bn) off the company’s value, amid investor concern that Elon Musk’s launch of a new political party will present further problems for the electric carmaker.
Tesla’s market capitalisation fell from just over $1tn to about $940bn shortly after stock markets opened on Wall Street, with the value of his stake in the company reduced by nearly $10bn, lowering it to below $120bn.
The Tesla and Space X boss remains comfortably the world’s richest person, with a wealth of about $400bn, according to Forbes.
Tesla shares have come under pressure owing to the Tesla CEO’s relationship with Donald Trump.
First, Musk’s strong support for the US president created a consumer backlash and now the antagonistic turn in his relationship with Trump has investors worried Musk will be distracted from his day job, or that the White House will punish his businesses.
Dan Ives, an analyst at Wedbush Securities, said Musk’s announcement that he is bankrolling a US political party will alarm investors.
“Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Ives said, adding that there was a “broader sense of exhaustion” among Tesla investors that Musk – the company’s largest shareholder – will not stay out of politics.
Trump on Sunday called Musk’s plans to form the America party “ridiculous”, launching new barbs at the world’s richest person.
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In a post on the Truth Social tech platform, Trump wrote: “I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks.”
Musk announced the creation of the America party on his X platform at the weekend. He wrote: “When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America party is formed to give you back your freedom.”