The Tesla stock rise more than 7% in premarket this Monday, extending a booming rally fueled by investor bets that the automaker will benefit from CEO support Elon Musk to the president-elect of the United States, Donald Trump.
At $344.50, Tesla is expected to increase in value by more than $74 billion if premarket gains hold. The stock is up nearly 28% since Trump’s election victory was declared on Wednesday, surpassing the $1 trillion market value for the first time in two years.
Tesla shares were up just over 1% in the year before Trump secured his second term in the White House. Musk backed Trump for months in hopes that his close ties to the now-president-elect would position his companies to benefit from the new administration, analysts have noted.
The billionaire contributed at least $119 million to a pro-Trump spending group, federal records show.
Tesla, Elon Musk and Donald Trump
Tesla’s self-driving technology has been under intense scrutiny from safety regulators as Musk tries to pivot the company toward self-driving technology and robotaxis.
In September, Trump said he would establish a government efficiency commission headed by Musk to reduce federal spending.
trump musk.avif
In September, Trump said he would establish a government efficiency commission headed by Musk to reduce federal spending.
Musk’s potential influence in the government could be significant for his other companies, such as the Starlink broadband system, due to his role as a prime contractor for the US Department of Defense.
On the other hand, Tesla has been a beneficiary of several policies that Trump has rejected, such as the credits for solar and electric vehicles included in the Inflation Reduction Act approved by the Biden Administration.
The launch of hedge funds by Tesla
Since Donald Trump’s election victory, hedge funds that bet against Tesla Inc. have racked up multibillion-dollar losses, hurt by the growing relationship between the president-elect and Elon Musk.
Between Election Day and the close of trading on Friday, these funds faced a loss of at least $5.2 billion, according to Bloomberg calculations based on data from S3 Partners.
Many of these funds were trapped in bearish positions, while several of their competitors decided to unwind their bets against Tesla in recent months, according to data from Hazeltree, which tracks the positions of more than 500 funds. This turnaround occurred after Musk expressed his support for Trump on July 13, marking a turning point in investment strategies.
Source: Ambito
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I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.