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Tesla shares drop as Musk announces new political party

Elon Musk's political ambitions spark investor anxiety, leading to a 7% fall in Tesla's stock.

July 7, 2025 at 09:19 AM

Market fears arise as investors worry about Elon Musk's political ambitions.

Tesla shares plunge as investors react to Elon Musk's new political party

Shares of Tesla are dropping sharply, with a more than 7% decline in pre-market trading. Investors are concerned that Elon Musk's new political party will disrupt the company's focus. This decline could remove about $70 billion from Tesla's market value. Musk's stake in the company may also decrease by over $9 billion, impacting his overall wealth, which Forbes estimates at about $400 billion.

Key Takeaways

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Tesla shares fell over 7% in pre-market trading.

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Musk's political party formation raises investor concerns.

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Possible market value loss may reach $70 billion.

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Investors fear Musk's focus may shift away from Tesla.

"Musk diving deeper into politics... is exactly the opposite direction that Tesla investors want him to take."

Dan Ives, an analyst, highlights investor concerns about Musk's political focus.

"I am saddened to watch Elon Musk go completely 'off the rails.'"

Trump's statement reflects criticism of Musk's recent actions in politics.

Elon Musk's entry into politics is causing alarm among Tesla investors. As the company's chief, Musk's actions directly influence investor confidence. His political ambitions may strain Tesla's reputation, especially with previous backlash from consumers and the challenging political landscape. Analysts indicate that Musk's focus on his political endeavors could detract from Tesla's mission at a crucial time. The uncertainty surrounding his role adds tension as investors seek stability.