Begbies Traynor Posts 10th Year of Growth Amid Rise in Larger Company Failures

Tesla's stock dropped 6.79% on Monday, resulting in a $68 billion loss in market capitalization, after CEO Elon Musk announced plans to launch a new political party, "America Party". The announcement has raised investor concerns about the potential impact on the company's brand and business. President Trump criticized Musk's political activities, calling them "ridiculous" and accusing him of going "completely off the rails".

Tesla's stock dropped 6.79% on Monday, resulting in a $68 billion loss in market capitalization, after CEO Elon Musk announced plans to launch a new political party, the "America Party." The announcement has raised investor concerns about the potential impact on the company's brand and business. President Trump criticized Musk's political activities, calling them "ridiculous" and accusing him of going "completely off the rails."

Musk's political pivot comes as Tesla faces several challenges. The expiration of EV tax credits on September 30 and the scrapping of Zero-Emission Credits (ZEV) have threatened demand and revenue. Additionally, the company is facing intensifying competition in key markets, especially China, where Xiaomi's new EV threatens Tesla's stronghold. Musk's political ambitions appear to be complicating Tesla's narrative at a time when investors are seeking stability.

Musk's political activities have drawn sharp responses from prominent figures. Laura Loomer, a well-known right-wing influencer with close ties to Trump, warned that Musk's third-party push could fracture the Republican base. Raheem Kassam, a former adviser to Nigel Farage and influential voice in MAGA circles, threatened to abandon Musk's platform if it began suppressing pro-Trump voices.

Investors have long expressed concerns about Musk's political involvement. Tesla hawk Dan Ives, global head of technology research at Wedbush Securities, warned that Musk diving deeper into politics is the opposite of what Tesla investors want during this crucial period.

Tesla's stock has experienced major fluctuations since the Nov. 5 presidential election. The stock closed at $251.44 on Election Day, surged by more than 90%, reaching an all-time closing high of $479.86 on Dec. 17, but has since declined approximately 34%, closing at $315.35 on Thursday.

Musk's latest moves mark a reentry into politics just months after resigning from his role as the de facto head of the Department of Government Efficiency (DOGE), a Trump-backed initiative. His departure from DOGE had buoyed Tesla's stock but the new political ambitions have rattled even his biggest supporters.

References:
[1] https://www.breezyscroll.com/world/the-us/tesla-stock-drop-elon-musk-america-party/
[2] https://nypost.com/2025/07/07/business/tesla-stock-down-nearly-7-after-elon-musk-launches-america-party/
[3] https://www.nbcconnecticut.com/news/business/money-report/tesla-shares-drop-7-in-premarket-trading-after-elon-musk-says-he-is-launching-a-political-party/3601814/