Main Reasons for the Decline
- Conflict between Elon Musk and Donald Trump: The public feud between Tesla CEO Elon Musk and US President Donald Trump has significantly increased the pressure on Tesla’s stock. Musk criticized Trump’s tax and spending legislation, while Trump accused Musk of being upset about the repeal of tax incentives for electric vehicles.
- Technical Chart Factors: Tesla’s stock fell below critical moving averages and formed a bearish wedge pattern, exacerbating the technical damage.
- Weak Sales Figures: Weak sales figures also contributed to the decline.
Market Effects
- Market Movements: The decline in Tesla’s stock impacted the entire market, particularly the Nasdaq, which fell by 0.83%.
- Company Value: Tesla lost over $150 billion in market value within a few days, representing one of the largest single-day losses in the company’s history.
- Investor Reactions: The sudden and significant drop in stock price has unsettled investors and could have long-lasting effects on confidence in the company.
Reactions After the Decline
- After-Hours Recovery: After reaching a low, Tesla’s stock recovered slightly in after-hours trading, indicating a degree of calming of market expectations.
- Efforts to Calm Tensions: Elon Musk attempted to soothe tensions with Trump by retracting previous statements and emphasizing that he would continue to utilize the Dragon spacecraft.
Overall, the sudden decline of Tesla’s stock demonstrates how significantly political and corporate factors can influence market movements. Investors should prepare for future developments and potential further escalations in the conflict between Musk and Trump.