Tesla stock tumbles following latest Elon Musk miscalculation | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

People are happy to follow a leader with conviction, and Elon Musk’s convictions have garnered him millions of fans and tens of millions of customers.

While Musk isn’t the founder of Tesla, his vision has made it a trillion-dollar powerhouse.

Up until recently, investing in Tesla was one of the smartest bets you could make. So when then-candidate Donald Trump promised Musk an unofficial cabinet position, the stock predictably hit new all-time highs.

However, plenty of cracks were forming for Tesla underneath the Wall Street surface.

Last year, Tesla experienced its first annual sales decline since 2011 after reporting a 1.1% drop in overall deliveries to 1.79 million from 1.81 million the year prior, the AP reported, citing data from analytics firm Global Data.

The company offered steep discounts to boost sales, leading the average sales price to fall to a little more than $41,000, its lowest level since 2020.

So Musk’s May 28 announcement that his time as head of the Department of Government Efficiency was ending was met with a great cheer from investors.

During Tesla’s earnings call earlier that month, Musk promised shareholders he would spend more time at HQ in Austin, Texas, this quarter and wrap up his work in Washington.

Since that day, the stock has been up double digits, but now it appears Musk is breaking that promise, and investors showed their disdain for Musk’s latest foray into politics on Monday.

President Donald Trump thanked Elon Musk on his way out.

Image source&colon; Kevin Dietsch/Getty Images

Tesla shares tank as Elon Musk launches new political party, ‘America Party’

Tesla (TSLA) shares dropped Monday morning as Tesla investors reacted to Musk’s tweets over the weekend, where he crowd-sourced ideas for a new political party.

“By a factor of 2 to 1, you want a new political party, and you shall have it!” Musk tweeted. “Today, the America Party is formed to give you back your freedom.”

Musk’s latest foray into politics was prompted by the passage of Trump’s enormous spending bill, which the non-partisan Congressional Budget Office estimates will add trillions to the national debt.

But he seems to be having fun with the idea now as he courts donors and politicians on his social media platform X. He reposted memes, made innuendos about Trump‘s connection to Jeffrey Epstein (again), and got into “policy discussions” with random accounts.

The pro-Second Amendment party believes that “fiat is hopeless,” so Bitcoin is the wave of the future.

As head of the America Party, Musk even had time to opine on South African apartheid politics.

What he did very little of was talk about Tesla’s global deliveries, which plunged 13.5% in the second quarter to 384,122 vehicles. Analysts polled by FactSet were expecting deliveries of 387,000 vehicles.

Musk has been able to play off Tesla’s struggles for over a year now because the stock has been astonishingly resilient. Neither political gaffe nor falling deliveries has knocked Tesla off its upward trajectory, but Monday’s selloff may be a sign of a changing sentiment.

Tesla shareholders brace for a rough earnings report in July

Tesla shares have been resilient but are still down 34% from the all-time high reached after Donald Trump won the election.

Tesla is different from other automakers in many ways, but one of the most significant is its stock ownership structure.

Retail investors own a significant portion of Tesla shares, while institutional investors own the majority of other automakers. According to Capital.com, institutional investors own 80% of General Motors’ stock, more than half of Ford stock, and 62% of Rivian stock.

More on Tesla:

Meanwhile, institutional investors own 42.8% of Tesla shares, while retail investors own 43.2%.

Elon Musk is the largest single Tesla shareholder at 13%.

Regardless of the structure, all shareholders will watch markets closely when the company releases its second-quarter results on July 23 after the market closes.

Analysts expect the company to report earnings of 35 cents per share on revenue of $22.6 billion. A year ago, the company reported revenue of $25.5 billion and diluted earnings of 42 cents per share.