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Tesla Stock: What It Means for Tesla and SpaceX Investors
Tesla Stock– Elon Musk and former President Donald Trump have reignited their public feud, placing Musk’s business ventures—and the lucrative government contracts they depend on—under increased scrutiny. The spat has fueled market uncertainty, particularly impacting Tesla and SpaceX, two of Musk’s flagship companies deeply intertwined with government projects.
Tesla Faces Investor Pressure Amid Political Fallout
Tesla’s shares fell more than 4% during Tuesday’s trading, reflecting investor concerns. Although the company experienced a rally alongside the broader market earlier this year, it remains down roughly 20% overall. This decline correlates with backlash stemming from Musk’s close association with Trump, particularly during his time influencing government budget cuts.
Musk acknowledged “some blowback” from his Department of Government Efficiency initiatives that may have negatively influenced Tesla sales. Nevertheless, investors remain largely optimistic about Tesla’s strategic shift from mass-market electric vehicles toward autonomous taxis and robotics, supporting a near $1 trillion market valuation.
SpaceX’s Heavy Reliance on Government Contracts
Unlike Tesla, SpaceX’s valuation—estimated at $350 billion—hinges largely on government contracts. The aerospace company’s increasing role in NASA’s Artemis lunar mission and exclusive capability to ferry astronauts to the International Space Station underpin its critical position.
SpaceX is also central to U.S. Department of Defense satellite launches, handling the majority of these missions, according to Ars Technica. Being privately held, SpaceX’s stock isn’t publicly traded, making real-time market reactions to Musk-Trump tensions less transparent. However, the company has received roughly $22.5 billion in federal contracts since 2000, with Washington Post estimating close to $38 billion for SpaceX alone, including a record $6.3 billion in 2024.
Musk’s Wealth and Political Fallout
The Musk-Trump feud also impacts Musk’s personal net worth, which peaked near $500 billion after Trump’s election but has since fallen to about $400 billion. Despite this drop, Musk remains the wealthiest individual worldwide, significantly ahead of other Trump allies like Oracle’s Larry Ellison.
The conflict escalated after Musk resigned from his special government role last month and criticized a Republican spending and tax bill. Trump retaliated by threatening to “terminate Elon’s Governmental Subsidies and Contracts.” Musk initially announced plans to “decommission” SpaceX’s Dragon spacecraft but reversed course following advice on social media to “cool off.”
Political Spending and Future Plans
Following political setbacks—including a candidate Elon Musk supported losing a key Wisconsin Supreme Court race—he indicated intentions to scale back his political spending. This development has fueled speculation that the ongoing tension between Musk and former President Donald Trump may be short-lived. Analysts suggest that the mutual dependencies between the two figures could prevent their conflict from escalating further.
Nevertheless, Musk is reportedly considering a bold new move in the political arena. He is exploring the launch of a new political party aimed at addressing the growing fiscal imbalances in the United States. Musk believes that the bill proposed by Trump would worsen these economic challenges, a view that is supported by the nonpartisan Congressional Budget Office. Given Musk’s extensive ties to government contracts and policies, this initiative represents a significant shift in his political engagement.
However, Musk himself is ineligible to run for public office. This raises concerns that any candidates he endorses might face conflict-of-interest scrutiny due to Musk’s deep connections with government entities and contracts. Therefore, Musk’s political maneuvers carry implications not only for his personal influence but also for the future of the politicians he supports. These developments mark a critical juncture closely watched by those interested in the intersection of business, politics, and governance.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
