Elon Musk’s Fortune Plunges by $34 Billion in 24 Hours After Trump Dispute

Billionaires tend to weather public controversies better than most, but sometimes the consequences hit fast and hard. That’s exactly what happened to Elon Musk, who saw his net worth shrink by tens of billions of dollars in just one day after publicly falling out with former President Donald Trump.

Musk and Trump used to get along, at least on the surface. Over the years, they’ve maintained a working relationship that included policy discussions, business meetings, and a shared interest in deregulation. However, that relationship cracked wide open this week, and the fallout wasn't just political; it was financial.

The trouble started when Musk went on a very public rant about a new congressional spending package, which he had no patience for.

“I’m sorry, but I just can’t stand it anymore,” Musk posted on X (formerly Twitter). “This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.”

Musk was furious. The bill, backed by House Republicans, had just passed and was heading to the Senate. Musk's anger wasn’t just about the size of the bill; it was about what he viewed as wasteful, backroom deal-making. Although his words weren’t aimed directly at Trump, the former president took it personally.

Tesla Stock Tumbles After Musk’s Fallout with Trump

Trump responded shortly after, expressing that he was “very disappointed in [Musk],” drawing a clear line between them. For investors, that was enough to start rethinking their positions, especially regarding Tesla.

By the end of the day on June 5, Tesla stock had taken a nosedive. The result? Musk lost a staggering $34 billion in a single trading session. That’s not just a bad day; it’s one of the worst financial hits ever recorded by the Bloomberg Billionaires Index, second only to a historic plunge by another tech titan.

Tesla’s stock had already been on a rough ride. Since Inauguration Day, shares have dropped by around 33%, according to The Independent. Musk’s frequent involvement in political issues hasn’t helped. While some investors appreciate his boldness, others see it as a distraction and potentially detrimental to business.

Getty Images

Elon Musk Didn’t Hold Back on His Opinion About Trump’s Controversial Bill.

It’s not just shareholders who are questioning Musk’s leadership. Back in March, Tesla investor Ross Gerber, one of the earliest backers of the company, called on Musk to step down as CEO.

“The company’s reputation has just been destroyed by Elon Musk,” Gerber said. “It’s time for somebody to run Tesla. The business has been neglected for too long.”

He didn’t stop there:

“There are too many important things Tesla is doing, so either Elon should come back to Tesla and be the CEO of Tesla and give up his other jobs, or he should focus on the government and keep doing what he is doing but find a suitable CEO for Tesla.”

Those comments added fuel to a wave of speculation in April that the Tesla board was quietly looking for a new CEO. Musk and Tesla Chair Robyn Denholm denied that any such search was happening, but the rumors haven’t completely dissipated.

Getty Images

Whether or not Musk stays in charge of Tesla long-term, his brief but explosive clash with Trump has shown just how quickly things can shift, for better or worse. When you’re one of the most high-profile business figures in the world, even a single post online can cost you billions.

With his ties to the Trump administration seemingly severed, Musk may now turn more of his attention back to Tesla and SpaceX. However, if the past few years are any indication, staying focused isn’t exactly his strong suit.

For now, investors and the public will be watching closely to see what he says or does next. Because when Elon Musk makes noise, the markets tend to listen. Whether they like what they hear is another story.

Understanding Market Reactions

Dr. Dan Ariely, a behavioral economist, suggests that market reactions to public figures can often reflect deeper societal sentiment rather than just individual actions.

His research highlights how perceptions of leadership and trust can significantly impact financial markets. In Musk's case, his fallout with Trump may have triggered broader investor concerns about stability and credibility. Investors often seek reassurance from leaders, and when that assurance is compromised, rapid financial repercussions can follow. This underscores the importance of maintaining consistent and positive public relations for business leaders.

Experts in crisis management, like Gary Vaynerchuk, emphasize the need for transparency and rapid communication during controversies. He advocates for a proactive approach where leaders address issues head-on rather than allowing rumors to fester.

Vaynerchuk suggests that a well-prepared communication strategy can mitigate damage and even rebuild trust. For Musk, a direct engagement with stakeholders through social media or public forums could have softened the financial blow. By acknowledging concerns and clarifying his stance, he could have retained investor confidence more effectively.

Moving Forward: Actionable Steps

In today's fast-paced environment, the intersection of personal relationships and public perception can dramatically impact financial stability. Understanding the dynamics at play allows leaders to navigate such challenges more effectively. Experts agree that fostering open lines of communication and transparency is crucial in maintaining trust with stakeholders.

As Elon Musk's recent experience illustrates, swift and effective communication can make a significant difference in mitigating financial fallout. By prioritizing these strategies, leaders can better insulate their ventures from the unpredictable nature of public sentiment.