Tesla shares dropped 5% after Elon Musk criticized Trump’s spending bill.

Musk has called for Congress to reject the proposal, describing it as problematic.

The fall came after a 22% rally in May 2025 despite weak monthly sales.

Musk recently resigned from his role at the Department of Government Efficiency.

His biographer said Musk is emotionally driven and not always measured.

Musk’s shift in tone toward the administration is gaining wide attention.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ CEO political activism consistently impacts stock performance

Research reveals a measurable financial cost when executives engage in partisan politics, explaining the recent Tesla stock slide.

A comprehensive study examining corporate social media from 2012-2022 found stocks typically decline by 20 basis points within ten days following partisan CEO tweets, with effects lasting up to a month 1.

This trend is particularly pronounced when CEOs make unexpected political statements that surprise investors. Tesla’s experience reflects this, as the company has faced challenges amid Musk’s political controversies, including a 53% drop in European sales and a 67% decline in France 2.

The $103 billion drop in Musk’s personal net worth aligns with Tesla’s stock decline during his period of heightened political engagement 3.

2️⃣ Musk’s political positions show a consistent pattern of principled volatility

Musk’s current break with Trump represents the latest in a series of political pivots based on specific policy disagreements.

In 2017, Musk publicly resigned from Trump’s advisory councils over climate policy, stating, “Climate change is real. Leaving Paris is not good for America or the world” 4.

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