- Elon Musk’s escalating feud with President Trump could have serious financial fallout for the tech billionaire’s companies. Tesla stock has already taken a hit, and now investors are warning that SpaceX’s valuation may also be at risk due to Musk’s behavior. Longtime Tesla investor Ross Gerber told Bloomberg Musk is no longer acting in shareholders’ interests and the Musk empire may be unraveling in real-time.
Elon Musk and Donald Trump’s once-cozy relationship is deteriorating in a very public fashion. The two billionaires have been feuding and trading barbs on social media, while Musk’s companies get caught in the crosshairs.
Tesla stock has taken a dive, but some investors are now worried that SpaceX, which is heavily reliant on government contracts, may also be vulnerable.
Ross Gerber, CEO of investment firm Gerber Kawasaki, told Bloomberg TV that Musk’s recent antics risk triggering investor lawsuits — and could slash SpaceX’s valuation by half.
“Elon isn’t functioning to the benefit of his shareholders and hasn’t been for many years,” said Gerber, who has significantly trimmed his Tesla stake in recent years. He called the feud a “disaster” for Musk, adding the world was “watching the dismantling of the Musk empire in real-time.”
“The truth is SpaceX’s valuation was probably cut in half today because of this behavior,” he said, adding that it wasn’t clear “whether SpaceX investors will realize that on the short or medium term because it’s a private company and insulated from the stock market, but this is devastating to SpaceX as well.”
Representatives for SpaceX and Musk did not immediately respond to Fortune’s request for comment, made outside normal working hours.
Musk and Trump’s relationship
Musk and his multiple companies originally benefitted from his close relationship with the U.S. president. In November, Tesla’s market value surged significantly reaching a valuation of $1.1 trillion
However, the billionaire’s tenure in the White House has been marred by controversy that has impacted his companies, especially Tesla. Public anger at the billionaire’s mass-firing of federal workers sparked widespread protests against the EV maker and tanked the share price.
With Trump now also taking aim at Musk, it could be SpaceX that feels the pain as a result of the company’s reliance on global government contracts, especially from the United States.
“Trump is the president of the United States, whether we like it or not, and Elon is going to have to live with this for quite some time and it could be very detrimental to him and his companies,” Gerber said.
Trump has already vaguely threatened to terminate some of these. Taking to his social media platform, Truth Social, the President said:
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
In response, Musk threatened to decommission the company’s Dragon spacecraft but later appeared to walk back the comments.
A fight over federal spending
The public spat between two of the world’s most powerful men began over federal spending, specifically Trump’s new spending bill. Musk has opposed the bill, calling it a “disgusting abomination” and urging Americans to demand that their representatives in Washington “kill the bill.”
Musk’s key role in the Trump administration was to reduce federal spending, something he did largely by firing federal workers, shuttering agencies, and canceling government contracts.
Despite these efforts, his DOGE team did not meet their original target of $1 trillion saved. According to the team’s official website, the current tally saved by DOGE is $180 billion.
This story was originally featured on Fortune.com
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