Tesla Erases $700 Billion ‘Trump Bump’

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A slide in Tesla Inc. on March 7 is capping off a round trip of epic proportions in the company’s shares.

Expectations that the electric vehicle maker would benefit from CEO Elon Musk’s close relationship with President Donald Trump made its stock one of the top gainers following the Nov. 5 election. That bet, however, has been no match for growing anxiety about Tesla’s core business of selling cars.

Tesla’s shares were down 4.6% at 11:53 on March 7, on track to erase its entire $700 billion post-election advance. The decline comes alongside a series of blows that have shaken investor confidence in recent weeks, from a January report showing that sales dropped for the first time in a decade last quarter to more recent evidence of Tesla losing its dominant position in Europe and China. Some investors have also grown worried that Musk’s foray into politics has become a distraction from his job as the EV giant’s CEO.

“The bet on Tesla’s shares soaring due to Musk’s political involvement has not worked out thus far,” said Adam Sarhan, founder of 50 Park Investments. “Investors who initially anticipated massive benefits from Musk’s political involvement got too excited, and now cooler heads are prevailing.”

The broader market environment is also proving a headwind, with the speculative frenzy that pushed stocks to record highs following the election smothered by worries over U.S. trade policy and economic growth. The S&P 500 is down more than 7% from its high while the Nasdaq 100 has tumbled into a correction.

Bank of America analyst John Murphy on March 4 slashed his price target on the stock