Jim Chanos, the renowned short-selling investor, who had a large short position on Tesla stock, must be a relieved man now. Chanos was at the 2025 Forbes Iconoclast Summit, where he was vocal on the recent public feud between President Trump and Tesla CEO Elon Musk. Chanos, who first shorted Tesla stock back in 2016, said of the spat: “Most predictable breakup ever.”
Following a public spat between CEO Elon Musk and President Donald Trump, Tesla (TSLA) shares dropped over 14% on Thursday. Trump threatened to cancel government contracts with companies belonging to Musk, after which TSLA shares nosedived.
Tesla’s market capitalization fell by more than $150 billion on Thursday, removing it from the exclusive group of publicly traded firms worth more than $1 trillion.
Musk resigned from his position in the Trump administration last week. He has already slammed the Trump-backed budget reconciliation bill, calling it a “disgusting abomination,” and urged the Senate to “kill the bill.”
At an event with Germany’s Chancellor on Thursday, Trump stated that he is “very disappointed” by Musk’s recent attacks. Trump said that Musk “knew everything” about the measure and that the Tesla CEO only opposed it because it would reduce electric vehicle requirements and programs.
In a separate article, Musk termed Trump’s claim that he understood specifics about the measure “false,” and said that members of Congress did not study it before voting on it.
“Without me, Trump would have lost the election,” Musk wrote shortly afterward.
In a series of posts on his Truth Social platform, Trump referred to Musk as “CRAZY” and threatened to sever federal contracts with his companies.
“Elon and I had a great relationship,” Trump said. “I don’t know if we will anymore.”
Tesla has also received further discouraging sales news in recent days, with auto industry associations in numerous European nations reporting sales figures for May that showed Tesla sales down while overall EV sales increased. Despite the lackluster sales, some analysts see the upcoming debut of fully autonomous Tesla rides in Austin, Texas, next week as a potential positive catalyst for the company.
The stock’s recent dips have reversed some of Tesla’s gains since Musk announced in April that he would devote more time to his firm and departed the Trump administration in May. It has lost roughly one-third of its worth since the beginning of the year.
Tesla’s stock price is down 30% YTD but still up 60% over one year. After the shakeout yesterday, Tesla stock is up 5% in the pre-market session on Friday.
Tesla shareholders wish for the dramatic and public feud between President Trump and Tesla CEO Elon Musk to dissolve as quickly as it started. White House staffers have set a phone call with Musk to attempt to keep the fallout from intensifying, Politico reported late Thursday, after Musk signaled on social media that he was willing to take time to cool the tense situation.
“Elon and I had a great relationship,” Trump has said. “I don’t know if we will anymore.”
Stock price eventually depends on the company’s fundamentals and the future outlook. The road ahead for Tesla shareholders could be unwinding, while the volatility in the stock price cannot be ruled out.