Shares of Tesla are down 6.7% in the pre-market after Elon Musk fought with the President over the weekend over the budget that was passed on Friday and cut out EV subsidies. Musk has long said he wasn’t against the move but it will undoubtedly hurt Tesla sales.
That move was expected but Musk used the bill to criticize Washington’s fiscal irresponsibility and said he would start a third political party called the “America Party” that would target a limited number of seats.
That prompted a message from Trump over on his social media platform that said:
“I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a train wreck over the past five weeks.”
Tesla is currently trading in the pre-market at $293, which is just below last Wednesday’s intraday low of $294.
Beyond that would be the June spike low of $273.
Fundamentally, there are some really big problems with Tesla as auto sales drop rapidly as Musk alienates his core supporters and his new supporters. His foray into politics increasingly saps time that should be spent on full-self driving, which was rolled out last week to a mediocre reception.
The future promise of the company is now humanoid robotics but that’s entirely untested in a company holding a $1 trillion market cap.
In terms of trading, there is massive options volume in Tesla that has turned it into something of a meme stock that works with squeezes and the hype machine rather than a view on future earnings. Tread carefully.
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