Tesla Inc. (NASDAQ: TSLA) still remains turbulent in the stock market even after an unusual public endorsement Tesla received from Howard Lutnick, Secretary of Commerce of the U.S. under former President, Donald Trump. Lutkin has drawn eyes for comments on Fox News about it being time to stock up on Tesla shares, but they haven’t helped the trend the stock has been on.
Howard Lutnick’s Endorsement and the Fallout
Surprisingly, during an interview on Fox News, Howard Lutnick revealed that he publicly endorsed Tesla stock. He described CEO Elon Musk as the best technologist and entrepreneur, adding that Tesla shares are undervalued. Lutnick even took it as far as to say ‘it’ll never be this cheap again.’ His comments were meant to rekindle confidence in investors’ faith in Tesla’s stock that has been so hard hit so far this year.
Nevertheless, this endorsement worked with the wrong effect. Tesla’s stock dropped further instead of rebounding. Factors for the decline include increased divisiveness by Musk, the general public’s decreasing number of happy customers, and declining demand for Tesla vehicles.
Tesla Stock Performance and Market Reactions
It has been a sobering 30% fall for Tesla’s stock in recent weeks. But some of it is part of the broader slowdown for the electric vehicle (EV) sector and doubts about Tesla’s future profitability. Declining demand, increased competition from other automakers, and production problems have been concerns for investors that have eroded the image of the company tarnished for growth.
Investor skepticism about Musk’s government ties has also entered into the debate. Public outrage has followed the formation of DOGE, an advisory group headed by Musk as part of the Trump administration. Musk’s involvement in government decision-making is also believed by many to be problematic and could result in a conflict of interest.
Public Outrage and Consumer Boycotts
Concerns about Elon Musk’s growing entertainment in politics are growing with consumers. In some cases, even acts of vandalism against Tesla vehicles have been called for, and there have been calls for a boycott of Tesla. Some critics say that having Musk in the Trump administration is eroding the brand’s public trust.
Still, Lutnick defended Musk, describing him as a visionary leader. Musk dismissed the public outrage and protests as ‘outrageous’ and continued to insist he was the right man to lead a technological company such as Tesla.
Concerns Over Lutnick’s Financial Interests
Lutnick’s support of Tesla stock has also been met with questions over whether he has a conflict of interest. As a rule, high-ranking government officials do not publicly express preference for one stock over another to avoid appearing biased in the Arena of Financial Markets. While Lutnick is legally barred from buying Tesla stock, speculation still held that he had Wall Street ties and a financial motive for his strong support of the stock.
Conclusion: What’s Next for Tesla?
However, Tesla’s stock is extremely volatile. The recent price drop has been good for some investors, but the conditions of the broader market are made clear: Tesla still faces a tough road ahead. Still, Tesla’s valuations could be/trapped in the doldrums in the coming months as competition in the EV market intensifies, regulatory eyes focus on the company, and Musk’s controversial public image continues to dog him.
In order to invest in Tesla, investors should watch the company’s financial reports, update on production, and other market factors.
