TeslaLong-time investor Ross Gerber, CEO of Gerber Kawasaki Wealth Management, said Musk no longer acts in the interests of shareholders and his business empire may be unraveling. The once-close relationship between Musk and U.S. President Donald Trump is deteriorating in a very public way. The two billionaires have attacked each other on social media, causing Tesla's stock price to plummet, and some investors are now worried that SpaceX, which relies heavily on government contracts, may also be affected.
Gerber said in an interview that Musk's recent antics could spark lawsuits from investors and could cut SpaceX's valuation in half.
Gerber, who has significantly reduced his stake in Tesla in recent years, said: "Elon is not operating to the benefit of shareholders and has been for years." He called the feud a "disaster" for Musk, adding that the world was "witnessing the unraveling of Musk's empire in real time."
"The reality is that SpaceX's valuation is probably down by half today as a result of this behavior," he said, adding that it's unclear whether "SpaceX investors will realize this in the short or medium term because it's a private company and insulated from the stock market, but it would also be devastating for SpaceX."
With Trump now targeting Musk, SpaceX may feel pain from its reliance on government contracts around the world, especially from the United States.
"Whether we like it or not, Trump is the president of the United States and Elon is going to have to live with this for quite some time, and it could be very detrimental to him and his company," Gerber said.
Trump has vaguely threatened to terminate some of these contracts. He said on his social media platform Truth Social: “The easiest way to save billions of dollars in our budget is to end Elon’s government subsidies and contracts. I’m always surprised Biden hasn’t done this!”
In response, Musk threatened to retire SpaceX's Dragon spacecraft, but later appeared to backtrack on the remarks.