- Tesla stock drops over 7% on Monday and 9% in the past five days.
- Short sellers are set to gain about $1.4 billion as Tesla shares decline to $296.
- Elon Musk’s political activities, including announcing the America Party, caused investor concerns.
- Donald Trump criticized Musk for forming a new political party on Truth Social.
- Azoria Partners postponed the launch of a Tesla Innovation ETF due to concerns over Musk’s political involvement.
Tesla shares declined over 7% on Monday, falling to $296 amid increased activity by investors who bet against the electric vehicle maker. The company’s stock has dropped more than 9% in the past five days as investor sentiment shifted following new political moves by its CEO, Elon Musk.
According to data analytics firm Ortex, short sellers are expected to profit by about $1.4 billion as Tesla shares continue to fall. On June 5, these investors recorded more than $4 billion in profits after one of the most significant single-day drops in the company’s market value, which happened after a public dispute between Musk and Donald Trump.
Earlier this week, Musk announced the formation of a political group called the America Party, aiming to address the U.S. national debt and promote individual freedoms. Shortly after the announcement, Trump posted on Truth Social, saying, “I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States – The System seems not designed for them.”
The increased political involvement has caused concerns among Tesla investors, with many worried that Musk is becoming more focused on politics than his leadership of the electric vehicle company. This shift in attention has contributed to the decline in Tesla’s share price.
In response to the political developments, investment firm Azoria Partners postponed the launch of its Tesla Innovation ETF. The firm stated it was “taking a cautious approach” following Musk’s announcement regarding the America Party. The move added further pressure to Tesla shares, contributing to the drop in value this week.
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