Elon Musk's formation of America Party causes Tesla stock to drop 7.4%

Elon Musk’s announcement of forming a new political party, the America Party, caused Tesla Inc. shares to drop by 7.4%, wiping out $16.7 billion from his net worth. Musk aims to focus on House and Senate seats for the next year, with the possibility of supporting a presidential candidate in the future.

Tesla’s stock has decreased by 28% this year as Musk’s political involvement has affected the company’s standing with car buyers. Analysts are concerned that Musk’s attention on politics may distract from Tesla at a critical time, leading to a downgrade of the company’s stock to a hold.

Musk has not disclosed many details about his political party, nor has he filed official paperwork with the US Federal Election Commission. His shift back into politics contradicts his promise to allocate more time to Tesla after his work for the Trump administration ended.

Investment firm Azoria’s CEO criticized Musk for prioritizing personal political ambitions over Tesla shareholders. Despite Musk’s commitment to continue leading Tesla, concerns remain about the impact of his political involvement on the company’s future and sales performance.

Tesla reported a 13% drop in second-quarter deliveries, consistent with the decline in the first three months of the year. Musk’s claim that his political actions would offset losses on the left with gains on the right did not materialize in the company’s global sales figures.

Read more at Yahoo Finance: Tesla Slides on Concern Musk’s New Party Will Worsen Slump