Investors are sending a clear message to billionaire Elon Musk: stay out of politics.
On Monday, Tesla shares plummeted by 6.8 percent, the biggest drop among S&P 500 stocks, following Musk’s announcement to form a new political party. The dip in stock value is a stark contrast to last month, when Tesla shares surged after Musk stepped down as an advisor to former U.S. President Donald Trump.
Now, Musk is venturing into uncharted waters with his new political organization, the “America Party”—a move that positions him in direct opposition to Trump. The former allies, who once shared close ties, are now on a collision course. Trump, responding to Musk’s latest political move, suggested the Tesla CEO had gone “off the rails.”
The rift between Musk and Trump deepened after Musk criticized the U.S. president’s tax and domestic policy bill, the “Big, Beautiful Bill,” which was signed into law last week. Musk argued that the bill would add trillions to the federal deficit, drawing a sharp response from Trump.
Musk is not the first to challenge the two-party system with his own political faction. In the 1990s, Texas industrialist Ross Perot launched the Reform Party to back his unsuccessful presidential run.
As Musk navigates this new political terrain, it remains to be seen how his latest venture will impact his companies, particularly Tesla.
