Tesla: Over $100 billion valuation gone up in smoke as Trump and Musk publicly clash
The automaker's stock plummeted on Wall Street on Thursday, June 5, as tensions between the two men reached their peak. The American president notably threatened to "cancel" the gigantic federal contracts awarded to his former colleague.
It was an exchange of pleasantries that did not escape investors' notice. This Thursday, the criticisms leveled by Elon Musk and Donald Trump visibly worried Tesla shareholders. While the billionaire left the American administration to return to take care of his businesses "7 days a week, 24 hours a day," the tensions between the two men caused the manufacturer's share price to plummet. Around 9:20 p.m. French time, the share price plummeted 16.60% to $276.94, losing more than $170 billion in valuation. At the close of Wall Street, the automaker posted a loss of $152.4 billion in a single day—an all-time record in its history, according to Dow Jones Market Data, bringing the company below the symbolic threshold of a trillion dollar market capitalization.
Tensions between the two men arose over Donald Trump's "big and beautiful" budget bill, which Elon Musk has been vocal in his opposition to and has repeatedly spoken out against. "In the history of civilization, there has never been such a big and beautiful piece of legislation. Everyone knows that! You either get a big and ugly bill or a thin and beautiful one. Thin and beautiful is the way to go," he mocked on his social network X. He also called the bill an "abomination" and dug up several old posts from the US president, in which he called for controlling US deficits: "No member of Congress should be eligible for reelection unless our country's budget is balanced - deficits are not allowed!" he wrote, for example, in July 2012. "I couldn't agree more!" Elon Musk replied ironically.
Enough to annoy the occupant of the Oval Office: "Look, Elon and I had a good relationship. I don't know if that's still the case. I was surprised," he said on Thursday. This statement, along with rising tensions, has shaken Wall Street, which is worried about seeing the American president react badly to criticism from his ally. Donald Trump's attack on his former collaborator didn't stop there, as he subsequently threatened to "cancel" Musk's gigantic contracts with the American federal government.
In recent months, Tesla's stock had benefited greatly from the closeness between its CEO and the winner of the 2024 US presidential election. Its price soared between October and mid-December, rising from $210 to over $470. Since then, the US political upheavals, the trade war, and the controversies surrounding Elon Musk have undermined the stock, which has fallen back to around $300. Love stories usually end badly...
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