Investing.com -- Tesla stock (NASDAQ: TSLA ) erased an early decline of 6.4% and rose 2% today amid speculation that CEO Elon Musk is planning to step back from his political role within the Trump administration. Reports from Politico suggest that Musk will soon reduce his involvement as the "governing partner, ubiquitous cheerleader and Washington hatchet man" for the current government.
The market’s recovery of Tesla shares suggests investors may be responding positively to the idea of Musk refocusing on his business ventures. The rumors come after a conservative judge, whom Musk supported, lost a Wisconsin Supreme Court seat, an event that has highlighted Musk’s controversial political engagement.
Despite President Trump’s satisfaction with Musk’s work on the Department of Government Efficiency initiative, insiders indicate that the billionaire is perceived as increasingly unpredictable and a potential political liability. The shift in Musk’s role is expected to align with the end of his status as a "special government employee," which temporarily exempts him from certain ethics and conflict-of-interest rules. This period is set to expire in late May or early June.
While some administration officials believe Musk will maintain an informal advisory role, others view him as an unmanageable force, often causing confusion with his impromptu statements on his social media platform, X. His political involvement was further scrutinized after a significant investment in the Wisconsin judicial race, prompting some Democrats to call it a referendum on Musk’s influence.
As Tesla’s stock movement today indicates, the potential for Musk to distance himself from political activities and return his full attention to Tesla could be seen as a stabilizing factor for the company. However, no official statement from Musk or Tesla has been made regarding these changes, leaving the situation subject to further developments.
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