Tesla stock down nearly 7% after Elon Musk announces launch of ‘America Party'

Core Viewpoint - Tesla shares experienced a significant decline following CEO Elon Musk's announcement of a new political party, raising investor concerns about his political involvement and its impact on the company [1][3][4]. Company Performance - Tesla's stock fell by 6.4% in pre-market trading, reflecting investor anxiety over Musk's political ambitions [3]. - The stock has seen major fluctuations since the November 5 presidential election, closing at $251.44 on Election Day, surging over 90% to an all-time high of $479.86 on December 17, and subsequently declining approximately 34% to close at $315.35 [6][11]. Political Involvement - Musk's announcement of the "America Party" aims to focus on a limited number of congressional seats to exert influence, which contrasts with investor expectations for Tesla's direction [1][14]. - The political ambitions come at a time when Tesla is facing challenges, including a 14% year-over-year drop in vehicle deliveries for the second quarter, missing Wall Street expectations [15]. Investor Sentiment - There is a growing sense of exhaustion among Tesla investors regarding Musk's continued political engagement, which diverges from their desire for stability during a crucial period for the company [4][5]. - Prominent figures within the MAGA movement have expressed concern that Musk's political moves could fracture the Republican base, indicating potential backlash from his political actions [19][20].