Tesla shares fell more than 3% on Monday over investors’ concerns about the focus of Elon Musk after he announced he would form a new U.S. political party.
Musk’s announcement marks a new escalation in his feud with President Donald Trump.
Tesla stock fell over 3% in Frankfurt, pointing to another decline once premarket trading gets underway following the three-day weekend for Independence Day, according to Reuters.
Veteran tech analyst Dan Ives of Wedbush told Reuters that Musk was Tesla’s “biggest asset” and his decision to dive deeper into politics would likely put the company’s shares under pressure.
“Tesla needs Musk as CEO and its biggest asset and not heading down the political route yet again…while at the same time getting on Trump’s bad side,” Ives said in a note on Sunday.
“It would also not shock us if the Tesla board gets involved at some point, given the political nature of this endeavour, depending on how far Musk takes it.”
Trump on Sunday called Musk’s plans to form the “America Party” “ridiculous,” launching new barbs at the tech billionaire, and saying the Musk ally he once named to lead NASA would have presented a conflict of interest given Musk’s business interests in space.
