«Tesla shareholders stuck in a war zone»: how should they respond to the conflict?

Wall Street's opinions on the public spat between billionaire Ilon Musk and US President Donald Trump are divided, with some urging investors to ignore the «childish bickering» and advising them to focus on more fundamental indicators, and others warning of negative consequences for the company up to the point that Tesla's board of directors may consider removing Musk from the CEO position.

- «We're seeing more positive signals than negative. And whether it's a conflict between Trump and Musk or between the two countries, eventually common sense will prevail,» said Tom Hulick, CEO of Strategy Asset Managers, which owns Tesla stock, on CNBC. He believes the escalation is temporary, so he urged investors to ignore this «childish bickering.» Instead, Hulick recommended focusing on more serious indicators - such as the development of energy infrastructure in the U.S. and beyond, as well as Tesla's own financial results.

Despite media pressure on Musk, «there is no denying that Tesla is an industry leader in many ways,» the top executive added. «Tesla's future depends on the company's future earnings. I believe that in the long term, the electric vehicle sector and Tesla in particular has huge potential. We are not dwelling on the current stress,» summarized the CEO of Strategy Asset Managers.

- The main bullish on Tesla, Wedbush's Dan Ives, also likened the deteriorating relationship between Musk and Trump to «a friend fight from high school.» «Musk and Trump need to resolve this situation urgently because it's not favorable to either side,» he noted in a CNBC statement. - While this feud doesn't change our positive assessment of Tesla and the prospects for autonomous driving technology, it clearly introduces chaos into how regulation will be implemented. It's as if we've entered a parallel reality.»

- «The company faces challenges in all three key regions, including the U.S.,» says Rico Luman, senior economist at ING Research, who specializes in the automotive industry. - To realize its growth ambitions, it needs regulatory support in its domestic, and crucial at that, market - the US. A strained relationship with the administration could negatively impact this.» According to the economist, Musk's political activism «has not done Tesla any good,» and his conflict with Trump has only exacerbated the situation. «Tesla's market value is largely based on expectations of future growth (increased sales, development of autonomous driving and related areas like robotization),» he explained. At the same time, Luman noted that the company's shares were already under pressure due to disappointing production and delivery figures.

- Tesla shares rose last year as Musk and Trump's relationship strengthened, remembered AJ Bell investment director Russ Mould. He said investors had hoped Musk - and thus Tesla - would get special treatment. Now, however, Trump seems to want to make life difficult for the entrepreneur. «Tesla shareholders are caught in the middle of a war zone, because everything that happens with Musk is reflected in the carmaker's stock price,» Mould noted. He called Musk's penchant for harsh statements a «liability» for Tesla shareholders, and suggested that his position as head of the company could be called into question. «Musk recently pledged to remain CEO for at least five years, but if he can't resist provocations in public, Tesla's board of directors may seriously consider his future at the company,» Russ Mould concluded.

- The conflict between Trump and Musk will put additional pressure on Tesla shares, according to Future Fund managing director Gary Black. He recently told X that his fund had sold all of the electric car maker's securities, and on Thursday, June 5, criticized Tesla's «bulls.» «These same bulls have argued for months that an alliance between Musk and Trump would simplify federal procedures and allow Tesla to obtain a nationwide license for unsupervised autonomous driving. That scenario is now highly unlikely,» he wrote in the post.

- The ongoing conflict could jeopardize U.S. cooperation with Musk's company SpaceX, which provides America with a huge advantage in space technology, says David Rosenberg, president and founder of Rosenberg Research. There is a skeptical group of lawmakers among Republicans, he said, and many of them openly cite Musk's stance against Trump's government spending bill as a reason why they won't support him. «Ultimately, it's the political backlash around Musk's actions that may be the most serious consequence of this whole thing,» Rosenberg said on CNBC's Squawk Box program.

In trading on June 6, Teslaquotes jumped more than 5 percent to $299. Traders had expected a conciliatory conversation between Trump and Musk, but the president told CNN that won't happen yet. A White House spokespersontold NBC that the president is «not interested» in a call. Another spokesperson, however, did not rule it out: «Anything is possible - I would like to see this extremely unpleasant situation resolved.»

At the end of the June 5 trading session, Tesla's stock price collapsed more than 14% amid a publicfight. The company lost more than $150 billion in market capitalization - marking the worst day for Tesla stock in its history, MarketWatch reports. Options traders began taking bearish positions en masse as the wrangle gained momentum. On Thursday, they entered into a record number of such contracts - about 4.01 million, the publication notes, citing Dow Jones Market Data. 

Since the beginning of 2025, Tesla's market value is now down 26%, the worst performance among the Magnificent Seven companies.

The conflict between the billionaire and the president escalated on Thursday, June 5. This week, Musk sharplycriticized a bill that proposes to eliminate tax credits for the purchase of electric cars. On June 5, Trump for the first time publicly responded to the criticism, saying he was «very disappointed in Elon.» That escalated into a public confrontation when the Tesla CEO wrote on social media that without him, «Trump would have lost the election.» In response, Trump stated that the easiest way to save billions of dollars in the U.S. budget would be to «end government subsidies and Ilon contracts.» However, after a series of posts on X criticizing the president, Musk said he was ready for a truce with Trump and, in particular, would not deprive the U.S. of its Dragons, America's only means of transporting astronauts to the ISS and back to Earth.