Musk, the world’s richest person, saw his net worth drop by roughly $34 billion, as a large portion of his wealth is linked to his electric vehicle company.

Tesla, Inc. (TSLA) stock experienced one of its biggest drawdowns, which shaved nearly $154 billion from the Elon Musk-led electric vehicle (EV) company’s market capitalization.

Musk, the world’s richest person, saw his net worth drop by roughly $34 billion, as a large portion of his wealth is linked to his electric vehicle company.

Musk-Trump Lock Horns

The development came after Musk and President Donald Trump exchanged tirades on social media, days after the former exited from the Department of Government Efficiency (DOGE) — a quasi-governmental agency set up by the latter immediately after he was sworn in as president.

The DOGE was established to identify and eliminate wasteful government expenditures, aiming to reduce the ballooning U.S. fiscal deficit. 

While leaving the DOGE in a public ceremony in the White House, the two professed longlasting camaraderie.

Things took a turn for the worse within a week. The feud started when Musk raised objections to Trump's “one, big, beautiful bill,’ calling it a “disgusting abomination.” On Thursday, Musk intensified his attack by posting on X, a social-media platform he owns, that the president wouldn’t have won a second term without his support. 

Trump did not take kindly to the comment. Calling Musk “crazy,” the president threatened to cancel the federal contracts of the companies owned by him. Apart from his flagship EV venture, Musk also runs SpaceX, Neuralink brain implant company, Boring Company, X, and the xAI artificial intelligence (AI) startup.

He also said Musk’s belligerent attitude was due to his administration cancelling his EV mandate. Trump’s tax bill includes a provision to cancel the Biden administration's EV tax credit.

Musk went one up and said he would decommission all key Dragon spacecraft that are crucial for the International Space Station. In a separate post, he also said Trump’s name is in the infamous “Epstein files,” adding that it was the reason why they haven’t been made public.

In the interim, Musk ran a poll asking his over 220 million followers whether it was time to create a new political party in America that actually represents the 80% in the middle. At the time of writing, over 80% had replied in the affirmative.

Amid heated social media exchanges that intensified on Thursday afternoon, Tesla plummeted to a low of $273.21 before closing down 14.26% at $284.70.

Analyst Worried

Commenting on the stock drop, Wedbush analyst Daniel Ives said it was due to investor fears 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.”

“The quickly deteriorating friendship and now "major beef" between Musk and Trump is jaw dropping and a shock to the market and putting major fear for Tesla investors on what is ahead,” he added.

Ives, however, expressed hopes of the situation starting to settle down, adding that it wasn’t good for either side.

The analyst said, “This feud does not change our bullish view of Tesla and the autonomous view, but clearly does put a fly in the ointment of the Trump regulatory framework going forward.”

“ It's another Twilight Zone moment in this Musk/Trump relationship which now is quickly moving downhill.”

Retail Downbeat

On Stocktwits, retail sentiment toward Tesla stock stayed at ‘extremely bearish’ levels (5/100) by late Thursday, with the degree of intensifying sharply from a day ago. The message volume on the Tesla stream was ‘extremely high.’

TSLA sentiment, message volume as of 10:10 p.m. ET, June 5 | source: Stocktwits

The EV maker’s stock was the top trending and the most active ticker on the platform by late Thursday.

A user expected further bloodbath in Tesla stock as they eyed the May non-farm payrolls report.

Another user predicted that the stock would drop to $250 or below if the feud intensifies.

An ongoing Stocktwits poll that asked users whether the Musk-Trump fallout has changed their view on the Tesla stock found that a majority (52%) has turned bearish.

Tesla stock has lost about 30%, including the plunge on Thursday, as the EV business struggles amid economic uncertainties. Musk hasn’t helped its cause by focusing on the DOGE and his other ventures.

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