Why Is Tesla Stock Falling This Week?
For the fourth consecutive day, Tesla (TSLA) stock dropped, losing 3.01% by the end of trading on Monday. It does not look any better as Tuesday trading begins.
It appears that Tesla CEO Elon Musk could be stretching himself too thin and not prioritizing the electric car company. He is a part of President Donald Trump’s administration, heading up the newly formed Department of Government Efficiency (DOGE). He is also running Tesla, X, xAI, SpaceX, and other interests.
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On top of that, Musk has made a bid for OpenAI, though the company is not up for sale at the time. OpenAI runs ChatGPT, and CEO Sam Altman said “no thanks” publicly to Musk on X. As the two exchanged public words, Tesla stock dropped more than 10%. Investors are worried that this losing streak will continue.
Tesla Performing against the Larger Trend
There are market trends that Tesla stock is perming contrary to right now. One is the overall Tesla stock movement since the November US election. That stock gained 70% between that point in November and January 20th, when Trump officially took office.
Tesla is also performing against the current bullish stock market trend. Meta, Amazon, Apple, Google, and Nvidia are all up this week, but Tesla is one of the notable stocks that is falling and falling sharply.
It may seem extreme for Tesla stock to fall so much based solely on a business discussion that does not necessarily impact Tesla directly. However, when Musk is not focusing on Tesla, the investors get worried, and if he is planning to invest billions into buying an AI company, he may not be as concerned if Tesla flounders.
A lot of Tesla’s stock value has fluctuated over the last couple of months based mostly on political statements and internet chatter more than on solid numbers. That means that when Musk makes a declaration on X about how he plans to invest the company’s billions, it affects the stock price. Investors may prefer that he attempt to make his deals less publicly, but so far, that has not been his style.
We do expect a market correction now for Tesla, since it appears that Altman is not interested in the buyout. But if it looks like Musk is still shopping around with billions, that could drive the stock price down further.
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