Tesla Stock Plummets Over 6% as Musk's "America Party" Announcement Ignites Feud with Trump 📉

Tesla stock ($TSLA) took a sharp nosedive on Monday, plunging more than 6% as a political firestorm erupted around its CEO. Investor concerns are mounting over Elon Musk's focus and leadership after he announced his intention to form a new American political party, a move that represents a dramatic new escalation in his public feud with former President Donald Trump.

The market reaction was swift and brutal. Shares of Tesla fell over 4% in Frankfurt trading, signaling a steep decline when U.S. pre-market trading opened after the three-day Independence Day holiday weekend. In the latest pre-market session, the NASDAQ-listed stock was down **6.86% to 293.14.

"Tesla Needs a CEO, Not a Politician"

Prominent tech analyst Dan Ives of Wedbush minced no words, warning that this political venture places the company's stock under immense pressure. He stressed that Elon Musk is Tesla's "biggest asset," and his decision to dive deeper into politics is a major risk for shareholders.

"Tesla needs Musk as its CEO and biggest asset, not heading down the political path again...while angering Trump at the same time," Ives wrote in a note on Sunday. "We also would not be surprised to see the Tesla board step in at some point given the political nature of this endeavor depending on how far Musk goes with it." This raises serious questions about corporate governance and the Board of Directors' fiduciary duty to protect shareholder value from a CEO's potentially distracting and damaging external activities.

A Political Clash with Business Consequences

This political firestorm couldn't come at a worse time for Tesla. The Wall Street Journal recently reported that the electric vehicle maker is in a state of "disarray," suffering from one of its worst sales periods amid production challenges and rising competition. Against this backdrop of internal turmoil, investors are questioning why their CEO appears to be increasingly unconcerned with the company's future, instead focusing on high-stakes political maneuvering.

The conflict with Donald Trump only magnifies these concerns. Trump dismissed Musk's plans to form "The America Party" as "ridiculous" and launched fresh criticisms at the tech billionaire. He referenced a past incident, suggesting that the nomination of a Musk ally to lead NASA would have created a significant conflict of interest, given Musk's vast commercial space interests with SpaceX.

The combination of a distracted CEO, a high-profile political feud, and underlying business weaknesses has created a perfect storm for investor anxiety, leading directly to Monday's sell-off. The market is sending a clear message: it wants a CEO focused on navigating Tesla through its current challenges, not one fighting a two-front war in business and politics.

Is Elon Musk's political ambition becoming Tesla's biggest liability? And should a CEO's personal politics affect a company's stock this dramatically? 🤔

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