President Donald Trump‘s recent announcement of new tariffs sent the U.S. stock futures into a tailspin.
What Happened: The imposition of tariffs, including a 10% charge on all imported goods and a 25% levy on foreign automobiles, caused Tesla Inc. TSLA stock to plunge 10% on Friday, wiping out $11 billion from CEO Elon Musk‘s net worth.
According to Bloomberg, this resulted in unprecedented losses on Thursday and Friday.
Reports indicate that Musk holds around 411 million Tesla shares, accounting for 12.8% of the company’s total. A notable chunk of these shares was used as collateral to finance his purchase of Twitter, now known as X.
Although details such as how many shares are pledged, the terms of his loan agreements, and the price point that could lead to a margin call haven’t been made public, the implications could be considerable.
Also Read: Why Elon Musk May Regret Ignoring Warren Buffett’s Political Strategy
Other tech giants also felt the heat on Friday, with Apple Inc. AAPL down 7.29%, NVIDIA Corp. NVDA falling 7.36%, Amazon Inc. AMZN dropping 4.15%, Alphabet Inc. GOOGL decreasing 3.20%, and Meta Platforms Inc. META down 5.06%.
Why It Matters: The significant drop in Tesla’s stock price is a clear indicator of the potential impact of political decisions on the stock market. The newly imposed tariffs have not only affected Tesla but also other tech giants, leading to a widespread market downturn.
This event underscores the vulnerability of tech companies to global political and economic shifts. The decline in Tesla’s sales globally, coupled with the backlash against Musk’s political involvement, adds another layer of complexity to the situation.
It remains to be seen how Tesla and other tech companies will navigate these challenges in the future.
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