Niu Niu Tong Sheng
Amid the dispute between Trump and Musk, is Coinbase the biggest winner?
Starting from the U.S. presidential election, everyone's attention has been on the Republican and Democratic parties. However, the most notable recent development might be the 'American Party.' From Tesla (TSLA) to SpaceX, and now to the presidential election, and today's establishment of the 'American Party,' what exactly is Musk planning? Is it time for Tesla shareholders to fasten their seat belts? This episode of Futubull will tell you.
Additionally, we have a small game for you in this episode. The winner will receive a generous prize. Want to know how to participate? Make sure to watch until the end!
Hello everyone, I'm Shan Yi.
Tesla CEO Elon Musk's moves between the business and political spheres are not new to us. Recently, this tycoon announced the formation of a new American political party, the 'American Party.' What triggered this move by the maverick?
The reason stems from a disagreement between Musk and U.S. President Trump over the 'Big and Beautiful Act.' What is the 'Big and Beautiful Act'? It is an extension of the 2017 Trump tax cut bill, with key points including:
1. Significant cuts to Medicaid and Social Security taxes;
2. Increased state and local tax deductions;
3. Reducing food subsidies, etc.
Musk criticized the bill for exacerbating the debt crisis and argued that it would push the U.S. towards bankruptcy. Analysis suggests that the bill will increase the U.S. deficit by $3.3 trillion over 10 years and reduce tax revenue for decades.
More importantly, Musk's companies are also affected by the bill. In the electric vehicle sector, a tax credit of up to $7,500 will be eliminated. Some analysis predicts that this will result in $Tesla(TSLA.US)$ an annual profit loss of approximately $1.2 billion.
After Trump officially signed the bill, Musk posted on X, stating that due to more than 60% of people supporting a previous poll on whether to form a new party, he announced the formation of the 'America Party' to challenge the two-party system, hinting at running in next year's midterm elections.
While it remains to be seen if this will actually happen, Musk's move has undoubtedly heightened tensions with Trump. Trump first suggested expelling Musk from the U.S., then mocked Musk's attempt as doomed to fail, and claimed that Musk was speaking out because of reduced subsidies for electric vehicles, vowing to have the Department of Government Efficiency review the subsidies given to Musk's companies.
In addition to government opposition, even investors disapprove. An investment company decided to postpone the listing plan for the Tesla ETF. Musk's actions certainly sent shockwaves through Tesla; after announcing the formation of the party, Tesla's stock price fell by more than 8% in one trading day, dropping below the $300 mark.
Musk was once a key supporter of Trump's campaign. Why did their alliance turn into a rift within just a year?
Looking back at their history of rivalry: Elon Musk, known for his outspoken nature, has long been at odds with Donald Trump. However, as Trump sought to return to the White House, Musk's stance began to shift.
During the U.S. presidential election, after an assassination attempt on Trump, Musk immediately expressed his support for Trump and even campaigned with him. During the election, Musk donated over $250 million to Trump's campaign. After the election, Musk was appointed as the head of the newly established Department of Government Efficiency, tasked with overseeing the reduction of government spending.
After Musk's term ended and he left the position, their relationship began to deteriorate, leading to the events mentioned at the beginning of the video. At this point, are they just feigning animosity, or is there a genuine split? Will the American Party become the third largest party in the U.S.? In light of these uncertain dynamics, how should Tesla shareholders position themselves? Let's hear from the experts.
Is it possible for a third major party to emerge in the U.S.? I don't rule out that possibility. Unless Musk completely abandons his business strategies, I don't rule out that he might find someone to help establish a new political party. Forming a third party would require a significant amount of time and effort. For Musk, money is not the issue, but time is indeed a challenge.
Regarding Tesla's stock price: $359 is the upper resistance range, while the lower range is around $285. The price fluctuates within this range. $Tesla(TSLA.US)$ In fact, there is a significant issue: first, the market for its main business—electric cars—is shrinking because many domestic electric vehicles now offer better value for money, including $XIAOMI-W(01810.HK)$ brands that are also competing in the market.
Therefore, can Tesla further expand its electric vehicle business? If not, it will have to rely on a few directions: artificial intelligence robots, Robotaxis, and space exploration.
If his relationship with Trump is poor, will Trump undermine all of Musk's deployments?
I believe this is inevitable, which is not conducive to $Tesla(TSLA.US)$ the development.
However, will the U.S. debt crisis be triggered by the 'Big and Beautiful Bill'?
It depends on whether the U.S. can continue to leverage its creditworthiness to issue national debt. As long as it can, U.S. debt will not face the risk of collapse, until suddenly, the U.S. may face challenges in three areas:
1. Technological challenges: U.S. technology companies are no longer the global leaders;
2. Military challenges: other countries can challenge the U.S. in terms of military power;
The trust in the dollar system has suddenly collapsed.
I personally would consider investing in $Coinbase(COIN.US)$ because it has the potential to challenge its all-time high since its listing. It is able to connect Web3 and traditional payment methods, which is in high demand in the market. I believe this will drive up companies like Upstart (UPST) and Affirm (AFRM).
Additionally, the space exploration sector is also affected, as the dispute between Trump and Musk will impact SpaceX's prospects. SpaceX's main competitor is $Rocket Lab(RKLB.US)$ Rocket Lab $Planet Labs PBC(PL.US)$ . Therefore, Rocket Lab has the opportunity to rise. Additionally, there is . Space development will also become a major expenditure for countries in the future, and these factors are important catalysts.
Musk's entry into politics, go to Futubull to get the latest news and express your opinions. Open the Futubull App, go to 'Discover' and then to 'Futubull Circle', where you will see various trending topics. Choose the topic you want to learn about; you can participate in voting, view related stocks and hot news, and join discussions.
