- Trump softens language towards former cheerleader-in-chief Musk
- Tesla shares rally nearly 5% in response to cooling mood
- Fallout from spat cost Tesla its biggest single session fall on record
Trying to second guess what either President Trump or Elon Musk might do or say next is a mugs game - they would run North Korea’s Kim Jong Un close as among the world’s most unpredictable public figures, but Trump’s apparent softening tone towards the Tesla (TSLA:NASDAQ) chief executive is welcome news for the electric vehicle maker’s shareholders.
Getting caught in the crossfire of a fallout between the world’s richest man and the world’s most powerful cost Tesla dearly last week, the firm’s share price losing 14% in what has been widely reported as the stock’s biggest single session slump on record, worth nearly $152.4 billion.
Over five sessions, since Musk and Trump traded barbs over Musk’s criticism of Trump’s ‘Big Beautiful Bill’, calling it an ‘abomination’ given that it will swell the deficit and national debt, and didn’t include breaks for EVs, Tesla has seen around $250 billion wiped off its market cap as Trump responded with threats to tear up US Government contracts with Musk’s businesses, including with SpaceX.
PIPES OF PEACE
But Trump now appears willing to play the pipes of peace, saying he would not discontinue Musk’s Starlink satellites service (owned by SpaceX), calling it a ‘great service.’ Trump also went on to wish the Tesla boss ‘well, very well.’
Trump calls Starlink satellites a ‘great service.’ / Image source: Adobe
No response from Musk so far but the markets have moved, the share price rallying nearly 5% in session trading on 9 June and indicating another 2%-plus when Wall Street reopens later today.
Many investors might well view all this as two pampered spoilt brats throwing their toys out of their prams yet the impact on shareholder value is stark. ARK Invest’s Cathie Wood said the spat underlines the extent to which Musk’s companies rely on US government support, Dan Ives at Wedbush, a top Tesla fanboy, stuck to his $500 price target and said the Trump administration would still fast track key regulatory hurdles for Tesla.
Something else to watch closely over the coming days and weeks.
