Tesla's shares increased by about 5% after Elon Musk revealed plans to reduce his involvement with the U.S. government, allowing him to focus more on Tesla amid declining sales and profits. Despite acknowledging backlash from his role in the Department of Government Efficiency (DOGE), Musk dismissed concerns about brand damage. Analysts believe that his decision to limit his government role could improve Tesla's fortunes, which have suffered a nearly 50% decline in stock price since December as sales and profits dropped sharply.
"Investors may breathe a small sigh of relief as Elon Musk said he'll step back from DOGE next month. After a 50 per cent fall in the stock price, investors are inclined to take a different view..."
"We think the market was concerned Musk could be distracted from leading Tesla and potentially hurt Tesla's brand. Musk's decision to reduce his advisory role should alleviate these concerns."
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