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Tesla Stock Drops 7% After Elon Musk Forms America Party: Political Ambitions Spook Investors

Published At: July 7, 2025 bySimon Lai-Vinh•7 min read
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When your CEO trades car sales for campaign rallies, Wall Street gets very nervous very quickly

The Situation

Elon Musk's foray into politics has sent shockwaves through Wall Street, with Tesla shares plunging 7% in pre-market trading after the CEO announced formation of the "America Party" on July 5th. This new political movement emerged from Musk's very public breakup with Donald Trump over the president's $3.4 trillion "Big Beautiful Bill," creating a perfect storm of investor anxiety about CEO distraction and regulatory backlash.

The timing couldn't be more dramatic. Just weeks after Trump signed his massive tax-and-spending package into law, Musk stepped down from his government efficiency advisory role, declaring on X that America needs freedom from what he calls a "one-party system, not a democracy." For a man who's already juggling Tesla, SpaceX, Neuralink, and X, adding "political party founder" to his LinkedIn profile has analysts questioning whether even Musk can successfully manage automotive innovation while campaigning for democratic revolution.

How We Got Here

The Musk-Trump romance was always destined for a messy breakup. Two billionaire egos, each accustomed to being the center of attention, were bound to clash eventually. The final straw came when Trump pushed through his "Big Beautiful Bill" – a legislative behemoth that cuts taxes for the wealthy, slashes social programs, and adds trillions to the deficit while funding a $46 billion border wall and a $25 billion "Golden Dome" missile defense system.

Musk, who has built his brand on efficiency and fiscal responsibility, watched Trump's spending spree with the horror of someone seeing their meticulously planned budget destroyed by a shopping-addicted relative. The bill's combination of massive tax cuts for the rich and equally massive spending increases violated every principle of the government efficiency Musk claimed to champion during his brief advisory stint.

The political divorce played out in real-time on social media, with Musk posting increasingly critical takes on Trump's fiscal policies. When Trump dismissed concerns about the deficit impact, Musk apparently decided that if you can't beat the system, you might as well start your own political party. Because nothing says "I'm focused on running multiple companies" like launching a grassroots political movement.

The Technical Reality

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Simon Lai-Vinh

Simon Lai-Vinh is Barclay News’ resident finance troublemaker and satirical analyst, known for poking holes in crypto hype cycles, Wall Street absurdities, and fintech fantasy pitches. A self-proclaimed finance nerd with a dark sense of humor, Simon writes for readers who like their market commentary with a side of Vietnamese sarcasm and Bloomberg-style cynicism.

In his column No, Seriously, That Happened, Simon unpacks the most ridiculous loopholes, scams, and market fiascos, translating them into bitter laughs, facepalms, and uncomfortable truths. Whether it's a DAO-backed karaoke coin or a DeFi project run by influencers, Simon brings deep technical analysis disguised as a stand-up set for jaded investors.

Simon has been called many things—too cynical, too nerdy, too honest—but never boring. He’s here to remind readers that finance is often performance art with tax implications, and that spotting the punchline is sometimes the only way to survive the circus.

When he’s not eviscerating the latest market absurdity, Simon can be found deep in regulatory footnotes, or quietly rolling his eyes at LinkedIn hustle posts over a bowl of phở.