Tesla shares fall after Musk's party launch

Elon Musk's political ambitions aren't good for his business. This isn't new: his adventure in the Trump administration had already proven it . After the announcement on Saturday of the creation of his own political party, the "Party of America" , the stock markets have been reeling again. This Monday, July 7, at the opening of Wall Street, Tesla's shares fell: just before 4 p.m. (in Paris), the group dropped 7.76% to $290.89, falling back below the symbolic threshold of $1,000 billion in market capitalization.

"Musk's increased involvement in politics [...] is exactly the opposite direction Tesla investors and shareholders want him to take," Daniel Ives of financial services firm Wedbush said in a note.

Standing firm against the US President's budget bill , whose impact on public finances he denounces, Elon Musk had promised in recent days to launch his own political party if the bill was adopted. On Friday, the American national holiday and the day of the promulgation with great fanfare of Donald Trump's "great and beautiful law" , he launched a poll on this idea on his social network. "By a ratio of two to one, you want a new political party, and you will have it !" announced the tech magnate on Saturday, while 65% of the approximately 1.2 million voters answered "yes" to the question of whether they wanted the "Party of America" ​​to see the light of day.

A former close ally of Donald Trump, whose campaign he generously funded during the 2024 presidential election, Elon Musk was tasked with slashing federal spending with his Doge Commission before the two billionaires fell out spectacularly in front of the entire world in May .

"After leaving the Trump administration and Doge, there was an initial sense of relief among Tesla shareholders," comments Daniel Ives. "That relief was short-lived, and the situation has only worsened with this latest announcement" from Musk, the analyst continues.

Donald Trump mocked Elon Musk's new venture on Sunday, calling it "ridiculous." Tesla's stock has plummeted nearly 40 percent since peaking in December.