Trump and Musk Feud Sends Tesla Shares Plummeting, Shorts Pocket $4 Billion — Bulls Return as Tensions Ease

TradingKey - A public spat between U.S. President Donald Trump and Tesla CEO Elon Musk sent the electric vehicle giant’s shares tumbling nearly 14% on Thursday, marking one of the biggest single-day drops in its history. 

The sharp selloff handed short sellers an estimated $4 billion in profits, according to data provider S3 Partners — one of the largest daily gains ever recorded for Tesla shorts.

Tesla is currently the second-most shorted stock in the U.S., with total short positions amounting to around $27.7 billion.The put-call ratio for Tesla options surged to their highest levels since late April, according to Cboe Global Markets, signaling growing bearish sentiment among investors.

Analysts have warned that a deepening rift between Musk and Trump could pose significant risks to Tesla’s business outlook. If the Trump administration not only revokes EV subsidies but also targets other initiatives such as Tesla’s Robotaxi program, the company’s growth trajectory could face serious headwinds.

However, just hours after the market close, signs emerged that the tension might be easing. 

Musk posted on social media indicating he would consider repairing his relationship with Trump. He also clarified that SpaceX’s Dragon spacecraft would continue carrying out government space missions.

Following the apparent truce signals, Tesla’s stock rebounded in night trading, rising as much as 8% before settling around 5% higher.

Tesla Stock Performance, Source: TradingView