President-elect Donald Trump’s naming of Tesla Inc. TSLA CEO Elon Musk as co-lead for the Department of Government Efficiency (DOGE) was expected and likely to be neither positive nor negative for the EV giant’s stock, according to The Future Fund LLC managing partner Gary Black.
What Happened: President-elect Donald Trump said earlier this week that DOGE will be led by billionaire Musk and former Republican presidential candidate Vivek Ramaswamy. The department, he said, will be aimed at bringing down government bureaucracy, slashing excess regulations, cutting waste expenditures, and restructuring federal agencies.
Trump also said in his statement that the department will provide advice and guidance from "outside the government," likely implying that Ramaswamy and Musk's appointments will not require the approval of the Senate.
“The structure allows Musk to avoid resigning from Tesla and SpaceX, and avoid federal conflict-of-interest rules that could have mandated divestiture of his holdings,” Black said about the announcement. However, given the appointment was expected, it will likely not impact Tesla stock, Black said.
Tesla bull and Wedbush analyst Dan Ives, however, expects Musk to have a key role in many of the new AI initiatives within the Trump White House as well as China tariff discussions over the coming months as part of his new role.
Bear Thesis: Tesla bear Gordon Johnson isn’t so optimistic. "DOGE" is nothing more than a toothless blue ribbon committee created to make two billionaires feel important. Trump is playing 3-D chess,” Johnson, CEO of GLJ Research, said.
Johnson deems the appointment to be a “snub” to both Musk and Ramaswamy. “It’s a, de facto, commission that will QUITE LITERALLY have no power. They will simply make recommendations to the WH/OMB (White House/ Office of Management and Budget),” he said.
Neither Musk nor Ramaswamy will get paid for their role in the department, Musk clarified in an X post earlier this week. The work of the DOGE department is scheduled to conclude no later than July 4, 2026.
Price Action: Tesla’s stock closed 0.5% up on Wednesday at $330.24, but it was down 0.5% in premarket trading on Thursday. Year-to-date, Tesla shares are up nearly 33%, according to Benzinga Pro data.
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