Tesla shares experienced a decline in pre-market trading on Thursday following Howard Lutnick's appearance on Fox News, where he fervently endorsed Elon Musk as the preeminent entrepreneur and technologist in America. Lutnick, who expressed his admiration for Musk's innovative endeavors, suggested that investing in Tesla could be a wise decision for those looking to gain insights from the broadcast. Despite Lutnick's optimistic perspective, Tesla's shares have seen a significant downturn, losing a third of their value over the past month, amid growing concerns about potential conflicts of interest related to Musk's government affiliations.
Howard Lutnick, during his Fox News interview, described Elon Musk as an unparalleled leader and a visionary in technological advancements.
“You have probably the best entrepreneur, the best technologist, the best leader of any set of companies in America working for America, and you have this sort of weird side of the Democratic party attacking him,” Lutnick stated.
He further emphasized the potential of Musk's ventures, including $30,000 robots aimed at revolutionizing domestic chores. Lutnick's faith in Musk was evident as he urged viewers to consider buying Tesla.
“I think, if you want to learn something on this show tonight, buy Tesla,” he advised.
However, Tesla's market performance tells a different story. The company's shares have been on a downward trajectory, with analysts pointing toward potential brand damage stemming from Elon Musk's association with former President Donald Trump. Notably, JP Morgan expressed concerns about the impact of Musk's political ties on Tesla's brand value.
“We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” JP Morgan remarked.
The political landscape surrounding Musk has been contentious. Republicans have criticized Democrats for their scrutiny of Tesla, while Democrats have called for investigations into Musk's involvement with Trump's administration. Reports indicate that Musk has donated substantial sums to Trump's re-election campaign and is actively involved in initiatives under the "department of government efficiency," or Doge, aimed at reducing governmental staffing and budgets.
Dan Ives, managing director at Wedbush, echoed similar sentiments regarding the potential repercussions on Tesla's reputation due to Musk's political engagements. Such developments have added to the volatility of Tesla's stock as investors weigh the implications of these affiliations.