Elon Musk and Donald Trump’s friendship has gone through a pretty unbelievable transformation. What started out as a friendly exchange has devolved into a very public brawl, leading to applause from the sidelines from other billionaires, politicians, and market analysts. The feud started last week when Trump attacked Musk for calling out the Republican tax-cut-and-spend bill. This led to a vibrant series of conversations on Twitter. In the end, both figures tossed around such inflammatory rhetoric that they sent both their followers and international capital markets reeling.
Last year, Elon Musk and Donald Trump were practically joined at the hip. They became close friends, often going to dinners and galas together, and publicly complimenting one another. Musk’s SpaceX has played a crucial role in cementing America’s dominance in space technology, a key point of pride for the Trump administration. Things intensified after Trump threatened to withdraw billions in federal contracts from Musk’s startups. This created an alarming self-interest, as it directly threatened their business interests and reputations.
Musk floated the idea that Trump could not have won the presidency in 2016 without his help. This assertion only widened the rift between them, producing more blistering public statements from political leaders and financial harbingers. In 2016, then-alt-right guru Steve Bannon encouraged Trump to sign an executive order to seize SpaceX. Though many thought the proposal preposterous, it was an indication of the deep anger felt by both sides over the ongoing battle.
Market analysts have raised the red flag about the longer-term ramifications of this recent conflict. Dan Ives, a noted financial historian called it “jaw dropping and a shock to the market.” He warned that Tesla’s stock was fighting an uphill battle, with tremendous headwinds and a 15% decline. Investors are concerned that the break between Musk and Trump would endanger their partnership and hurt regulatory favorability for Tesla, particularly in the hands-free driving lane.
“Tesla’s stock is under major pressure down 15% as investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump Administration.” – Dan Ives
Bill Ackman, the mega investor and hedge fund operator Bill Ackman, urged both men to find common ground. He stated, “We are much stronger together than apart,” emphasizing the potential benefits of collaboration over conflict. He’s not alone in his concerns. They fear that the escalating war of words and potential policy retaliation threatens to inflict long-lasting damage on the tech sector and government’s relationship with it.
As the feud continued to spiral out of control, other powerful actors weighed in on the debate. Gary Black, the Managing Director at Future Fund took an outsized risk. His decision to sell all his Tesla shares was partially driven by concern over how the long-running squabble could impact the firm’s future. He certainly wasn’t the only one to have opinions. Ross Gerber chimed in, strongly criticizing Musk’s manhandling of Trump and just how it affects shareholder value.
“Elon going postal on Trump and tesla stock is getting walloped. Trump will be returning his new Tesla and is saying he got musked. All this can’t be good for shareholders. But hey, who cares about us.” – Ross Gerber
The public conversation around this petty feud is that it’s all about political realignment too. Elon Musk recently floated the idea of creating a new political party on social media. His vision is to build a new centrist party for the “80% in the middle.” Even Mavericks’ owner Mark Cuban appeared to support this proposal, tweeting it all over the place. Andrew Yang recently expressed support for Cuban’s idea of an independent presidential primary in 2028. This shift indicates that their rivalry may reach beyond the private realm and affect future political arenas.
And even after the war broke out, some analysts stuck to their bullish theses on Tesla. Dan Ives from Wedbush noted that while the situation remains troubling, it has not altered the firm’s overall positive view of Tesla’s long-term prospects.
David Rosenberg reiterated the importance of Musk’s contributions through SpaceX to America’s standing in global space technology. Such statements bring home the extent to which these men’s legacies are tied to American exceptionalism and ingenuity.
The feud continues, both men know they have extraordinary power and control to use. Their influence extends beyond just their respective industries, impacting public perception and the broader market landscape. Government, industry, and advocacy groups Their interplay still mesmerizes all sectors.