Amid Criticism, Commerce Secretary Urges Investment in Declining Tesla Stock
In response to protests against Tesla and concerns over Musk's influence, Howard Lutnick encourages Americans to invest in Tesla stock despite recent declines.
Overview
Minnesota Governor Tim Walz criticized Elon Musk at a Wisconsin event, linking Musk's political involvement to a sharp downturn in Tesla stock, which has fallen 34.6% recently. Amid mounting investor pressure and low stock prices, Commerce Secretary Howard Lutnick defended Musk, urging the public to invest in Tesla. Despite Lutnick’s claims of Musk being a top entrepreneur and technologist, Tesla shares continue to decline, leading experts to question the viability of Musk’s ventures. Concerns also grow regarding potential conflicts of interest due to Musk's government roles and their impact on his businesses.
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Analysis
- Musk's involvement in government through DOGE has raised concerns among some investors regarding its impact on Tesla's performance, as impacts of political decisions affect public perception.
- There is skepticism about whether investments in Twitter/X have truly stabilized its valuation or if it is inflated, raising questions about Musk's financial strategy and the long-term viability of the platform given current advertising trends.
- While some investors appear optimistic about potential revenue growth from X, uncertainty remains concerning the accuracy and transparency of its financials post-acquisition.
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Fortune·3M·FAQ
Lutnick endorsed Tesla stock, calling Elon Musk the 'best person to bet on' and stating that Tesla's stock will never be cheaper again. This endorsement came amid Tesla's significant stock slide and growing controversy surrounding Musk's political involvement.
Musk's political involvement has led to a significant decline in Tesla's stock and public perception. His association with the Trump administration and divisive political stances have alienated some customers and investors, contributing to protests and vandalism at Tesla dealerships.
Lutnick's endorsement raises concerns about potential conflicts of interest due to his past ties to Wall Street and Cantor Fitzgerald, which has invested in Tesla. Although he agreed to divest his business interests, the endorsement still sparks questions about his impartiality.
Recent market developments, including BYD's introduction of ultra-fast charging technology, have contributed to Tesla's stock decline. Analysts have revised their projections downward due to concerns about Tesla's self-driving capabilities and robotaxi deployment.
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