Tesla Inc. TSLA CEO Elon Musk announced a new political entity over the weekend, dubbed the “America Party,” which has since sparked mixed reactions among investors, analysts and loyalists.
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What Happened: On Sunday, in a post on X, Wedbush Securities senior analyst Dan Ives was blunt in his assessment, saying Musk's move was “exactly the opposite direction” of what most investors would have wanted him to take, during what he refers to as a “crucial period for Tesla.”
Ives says he gets why Musk is doing this, but adds that it’s just causing exhaustion for investors in the company, as the stock dropped over 6% in pre-market trade, before recovering to -0.85% at the time of writing this, in response to the announcement.
Long-time Tesla bull and CEO Gerber Kawasaki, Ross Gerber, also voiced his frustration, saying that “Waymo has solved autonomous driving. Meanwhile, Elon is starting a new political party.”
His remark underscores concerns that Musk's focus may be drifting from Tesla's operational priorities at a pivotal time for the company.
The Managing Partner at the Future Fund, Gary Black, however, downplayed the impact this is set to have on Tesla, saying that he disagrees “with the doomsday crowd,” and believes it is unlikely to have any significant impact on the company’s shares in the long-term, while acknowledging that “it's difficult to predict the short term impact.”
Black says that it’s “highly unlikely” for this new political venture to gain much traction, noting the historical difficulty third parties have faced in the U.S. This, he says, would lead Musk to eventually focus on something else.
Musk’s loyalists and supporters, however, continue to rally behind him, with Tesla investor and influencer Dave Lee defending the billionaire entrepreneur’s motivations in a lengthy post on X, citing several personal sacrifices that Musk has made in recent months for national interest.
“You can’t make this stuff up,” Lee says, referring to President Donald Trump’s latest tirade against Musk, where he says that the latter has gone “off the rails” and is a “trainwreck,” despite him toiling and putting in 16-plus hour workdays leading the Department of Government Efficiency, only to have his work undone by the “One Big, Beautiful Bill.”
Why It Matters: Last week, Trump asked Musk to “close up shop” in response to the escalating feud with Musk, and the latter’s growing criticism of the “Big, Beautiful Bill.”
Trump’s former personal attorney, Michael Cohen, who’s since become a vocal critic of the administration after serving a prison sentence for various charges, came out in support of Musk on Sunday.
Cohen asks Musk to send him a message if he wants to know “how to fight political guerrilla warfare,” while adding that he would lose otherwise, in a post on X.
Price Action: Tesla shares ended Thursday down 0.10%, trading at $315.35, and are down 0.85% after hours owing to Musk’s political pivot. The shares have recovered by a 6% decline after hours just a couple of hours ago.
Shares of Tesla score well on Growth and Quality, while having a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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