Speculation Surrounds Trump and Musk’s Public Feud: A Possible Market Manipulation?

The recent public feud between former U.S. President Donald Trump and billionaire entrepreneur Elon Musk has ignited a wave of speculation regarding its true motivations. Analysts and media commentators are beginning to entertain the notion that this spat may have been orchestrated to drive down the stock prices of Musk’s companies, particularly Tesla and SpaceX, allowing savvy investors to acquire shares at significantly reduced rates. Given Trump’s history of market manipulation allegations, this theory is gaining traction, shedding light on the intricate connections between politics, business, and financial practices in the United States.

The controversy erupted when Trump criticized Musk’s remarks regarding new immigration policies, labeling the tech mogul an “overrated showman.” Musk responded during a CNBC interview, accusing Trump of engaging in “economic populism” and disregarding innovation. Coinciding with this exchange, Tesla’s stock plummeted by 8% over a two-day period, resulting in a staggering loss of over $100 billion in market capitalization, as reported by the Financial Times. Additionally, although SpaceX is privately held, the company has not remained unaffected; investors are reportedly reevaluating their valuations, complicating potential capital-raising efforts, according to The Wall Street Journal.

The idea that the spat was staged draws from Trump’s previous behavior. The New York Times notes that he faced accusations of market manipulation back in 2018 after tweets influenced the stock prices of major corporations like Boeing and Lockheed Martin. Furthermore, in 2020, his remarks on oil prices led to significant fluctuations in commodity markets, as reported by Reuters. Analysts interviewed by Forbes suggest that the recent conflict could be part of a strategy where investors linked to Trump or hedge funds capitalized on the temporary dip in Tesla’s share price, anticipating a rebound. Trading volume surged by 40% on the day Tesla’s stock declined, indicating that major players were actively involved.

Musk is no stranger to controversies surrounding market activity. In 2018, he faced a $20 million penalty from the SEC after tweeting about taking Tesla private at $420 per share, a move deemed manipulative by regulators, as highlighted by The Guardian. This history has led some experts, as cited by Axios, to question whether the recent conflict serves as a mutual publicity stunt aimed at garnering attention and financial advantage. Notably, Business Insider reports that Tesla shares have started to rebound since the dispute, suggesting that the stock’s decline may be short-lived and advantageous for opportunistic investors.