Shares in Tesla sank early Tuesday after President Trump threatened to go after Elon Musk's federal subsidies.
Why it matters: A few months ago, the close relationship between Musk and Trump was thought to be the key to making Tesla significantly more valuable. The company is now facing a greater existential threat as a result of their split. Catch up quick: Musk has been on the attack over Trump's "big, beautiful bill," promising to start a new political party to oppose the bill's supporters if it passes.
Late Monday night, Trump threatened to use perhaps his most powerful leverage over his former "first buddy."
What they're saying: "Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE," Trump posted on Truth Social.
By the numbers: Tesla shares fell just over 5% in early trading Tuesday, a decline that would wipe about $7 billion off Musk's personal net worth.
Since the beginning of June, when he first began pursuing the spending bill, the stock has fallen about 12%. Shortly thereafter, he had a complete rift with the president. Between the lines: Even Musk's biggest Wall Street supporters say they fear the possible fallout of the deepening tension between the two men.
"As we discussed this BFF situation has now turned into a soap opera that remains an overhang on Tesla's stock," Wedbush Securities analyst Dan Ives wrote Tuesday morning, likening it to a junior high school friendship gone sour.
The intrigue: Tesla is due to report second-quarter delivery data on Wednesday, with analysts expecting them to drop about 13% from last year amid the ongoing backlash against Musk.
Bloomberg reported Tuesday that Musk is set to take personal control of U.S. and Europe sales after the departure of a long-time lieutenant.
Ironically, given Trump's re-shoring push, Bloomberg also said the Tesla reshuffle would put a China-based executive in charge of the company's global manufacturing operations.
The bottom line: "At the end of the day being on Trump's bad side will not turn out well..and Musk knows this and Tesla investors want this back and forth to end," Ives wrote.
Editor's note: This article was updated with new information throughout.
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