Tesla Inc (NASDAQ:TSLA)shares slid 4.1% in premarket trading on Monday, wiping nearly $54 billion from the company’s market value, as investors reacted to Elon Musk’s announcement of a new US political party.
The proposed “America Party” deepens Musk’s shift into partisan politics and has raised questions about his focus on Tesla.
Dan Ives, a tech analyst at Wedbush and long-time Tesla bull, described Musk as the company’s “biggest asset” and warned that his political activity could drag on the carmaker's valuation.
He added that the board may need to intervene if Musk pushes ahead.
"Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story," Ives said in a note.
"While the core Musk supporters will back Musk at every turn, no matter what, there is a broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track."
Trump dismissed the new party as “ridiculous” and took aim at Musk’s influence in space policy, pointing to potential conflicts with his former appointees.