Trump aides scheduled Friday call with Musk, Tesla shares seen rising- Politico

White House aides are attempting to de-escalate a public feud between President Trump and Elon Musk, scheduling a call between the two after the spat erased $150 billion from Tesla's market capitalization on Thursday. The feud, triggered by Musk's criticism of Trump's tax policies and retaliatory allegations, led to a 14% slump in Tesla shares, though the stock rebounded 5% in after-hours trading following the report of the planned call. The situation raises concerns about potential policy actions against Musk's companies and a reversal of Tesla's previously favorable position with the White House, adding to existing investor unease about TSLA's valuation.

Analysis

A significant public dispute between President Donald Trump and Elon Musk has introduced considerable volatility and uncertainty for Tesla (TSLA). The feud, reportedly triggered by Musk's criticisms of a Trump-backed tax and spending bill and escalating with personal attacks and threats from Trump to cut government contracts to Musk's companies, including SpaceX, led to a sharp 14% decline in Tesla's shares on Thursday, erasing approximately $150 billion from its market capitalization. While a White House-scheduled call on Friday between the two, aimed at de-escalation, prompted a 5% rebound in Tesla shares to $298.64 in after-hours trading on Robinhood, according to Politico, the underlying tension signifies a material risk. This event compounds existing pressures, as Tesla shares were reported to be trading down about 25% so far in 2025. The situation implies a potential reversal of any previously favorable relationship with the White House for Musk's ventures, with the risk of targeted policy action against them, which could further pressure Tesla's valuation and outlook, aligning with the observed moderately negative sentiment and high market impact score of 0.75.

Key Decisions for Investors

• Investors should closely monitor the outcome of the scheduled de-escalation call between President Trump and Elon Musk, as its success or failure will likely dictate near-term sentiment and trading activity for Tesla shares.
• It is crucial to re-assess the political risk premium for Tesla and other Musk-affiliated enterprises, given the potential for adverse government actions or contract disruptions stemming from this high-level conflict, especially concerning entities like SpaceX.
• Given Tesla's significant reported year-to-date share price decline of 25% and the new layer of uncertainty introduced by this feud, which has a per-ticker sentiment score of -0.7 for TSLA, investors should exercise caution and scrutinize the company's valuation in light of these amplified risks and market volatility.