TOP STORY
💔 Tesla Crashes -14% After Elon and Trump's 'Break-up'

🤯 Just when you think the stock market news can’t get any more interesting, another crazy story drops - and this week is no exception.

🥊 In a wild turn of events, Elon has turned against his once-close friend and ally, Donald Trump, leading to a flurry of vicious attacks back and forth on X and Truth Social.

📉 And beyond being entertaining drama, the feud has a major impact on Tesla ($TSLA) shareholders, with Trump threatening to cancel Tesla and SpaceX government contracts and end the subsidy for EVs in the US, causing Tesla to plummet -14% this week.

📈 Despite a brutal week for Tesla (which will unsurprisingly be our Top Story today), the markets were overall green!

• The S&P 500 is up +1.8% this week and is now up +2.3% for the year!

• The tech-heavy Nasdaq-100 is up +2.3% this week and is now up 3.8% for the year!

• Bitcoin is down -0.34% but is up +12.9% for the year!

💡 A few other interesting stories we’ll cover today:

• Lululemon ($LULU) fell -20% on Friday after tariffs eat away profits

• Robinhood ($HOOD) soars +13% after rumors that it will join the S&P 500

• Bumble ($BMBL) tumbles -5% after being downgraded by JPMorgan

• and Circle ($CRCL) stock surges over +247% after its IPO…

But first, let’s dive into the Trump vs Elon saga and what it all means for Tesla 👀

😰 What Trump vs Elon Means for Tesla Shareholders

🤔 First off, what sparked the feud?

📑 At first, it was all about the President’s ‘big, beautiful’ Congressional spending bill, which Elon started publicly criticizing, calling it a ‘disgusting abomination’ and saying:

😬 But quickly, the fight got much more personal with Elon calling for Trump’s impeachment and even hinting that he’s in the Epstein files.

🚘 Trump Says It’s About the EV Mandate

Trump says the real reason Elon is upset is that the new bill would cut the EV credits, which JP Morgan estimates will cost Tesla roughly $1.2B in profit over the next 7 years.

And with Tesla’s sales falling this year amid politically-fueled boycotts (recently reporting its worst quarter since 2022), losing the $7,500 credit for buying an EV would likely be a big hit to sales.

😬 But it gets worse…

With brutal insults being tossed back and forth, the EV credits aren’t the only thing at risk.

❌ After Elon’s comments about Epstein, Trump threatened to cancel billions in federal contracts for both Tesla and SpaceX, which have reportedly received over $38 billion from the government (to put it into perspective, Tesla’s net income for 2024 was only ~$7B).

This ‘war of words’ has had a very clear and direct impact on Tesla stock, with each new tweet sending the stock plunging further and further down:

So what’s next for Tesla, and will this public spat come and go, or is ‘Tesla finished’ as one tech journalist claims?

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TOP STORY CONTINUED
👀 Can Tesla (and Elon) Recover From This?

🎯 Ignoring the drama, let me summarize the direct impact of Trump vs Elon on Tesla:

• Tesla is at risk of losing the EV credits, which have accounted for a third of Tesla's profits over the last decade (Trump aims to pass the bill by July 4)

• Tesla is heavily dependent on regulatory approvals for its robo-taxi ambitions, and this rift may put those at risk

• Elon had already turned much of the left-leaning US population against him, leading to many Tesla boycotts and directly impacting sales (something even Tesla acknowledged in their recent earnings). Now, with the fight against Trump, Elon has turned Trump supporters against him as well.

😰 Elon has now made it clear, without a shadow of a doubt, that he is a political liability for Tesla.

👎 When Elon announced he was stepping back from DOGE, Tesla soared, as investors hoped this would mean a less-distracted Elon. But investors are starting to lose trust, with long-time Tesla investor Ross Gerber among the many who were very disappointed by Elon’s antics this week, saying:

⭐️ The Good News

While it was certainly a brutal week for Tesla shareholders, Friday gave investors a small glimmer of hope, with some small signs that the feud was de-escalating, leading Tesla to bounce back +3.7%.

Tesla optimists are hopeful that the fight will wrap up quickly, Elon and Trump will make up, and that Tesla’s planned launch of its robo-taxis in Texas this month will turn the narrative around for the now politically-charged stock.

🌼 My Thoughts

😅 As for me, I am very happy I sold Tesla back in January.

🫣 While some are viewing the crash as a buying opportunity, with 1,162 folks on Blossom buying the stock this week, for me, there is now so much uncertainty and political risk swirling around the stock that I plan to stay far away!

🚩 With many Tesla bulls (including Dan Ives, who is always extremely optimistic about Tesla) putting up some red flags, it’s important to understand that this fight could have real consequences on the fundamentals of Tesla’s business and robo-taxis’ aspirations, and to make sure you have a clear thesis if you plan to buy the dip:

💡 That said, that’s just my personal opinion, and there are clearly many who disagree with me, so I’m excited to read your thoughts on Blossom!

ALSO IN THE NEWS
🗞️ Other Key Headlines this Week

🧘‍♀️ Lululemon Crashed -20% on Friday After Cutting Its Annual Profit Forecast Due to Tariffs

• This week Lululemon ($LULU) reported earnings, and while it topped Q1 earnings and sales expectations, it slashed its full-year profit outlook, citing the potential impact of U.S. tariffs on Chinese imports.

• Lululemon now anticipates full-year earnings per share ranging from $14.58 to $14.78, down from a prior guidance of $14.95 to $15.15.

• This caused the stock to crash by -20% on Friday, the stock's worst single-day performance since 2020.

• Sales growth in America was also disappointing, with same-store sales falling 2% year-over-year.

• As a result, many analysts cut price targets significantly.

• On Blossom, the community saw this as a buying opportunity, with Lululemon ranking as the #67th Most Bought.

📈 Robinhood Jumped 13% As Investors Speculated It Would Join the S&P 500

• Robinhood ($HOOD) jumped +13% this week on speculation it would join the S&P 500 in the June quarterly rebalance (as getting included in the index drives major inflows).

• However, despite meeting key criteria like profitability and market cap ($18B+), Robinhood was left out of the latest S&P update.

• Analysts called it “the biggest snub” of the quarter, as other additions like KKR ($KKR) and CrowdStrike ($CRWD) made the cut.

• The stock has gained nearly +90% year-to-date, fueled by back-to-back quarterly profits and rising trading activity.

💞 Bumble Tumbles -5% After Being Downgraded by JPMorgan

• Bumble ($BMBL) fell -5% this week after JPMorgan downgraded the stock to underweight (aka a ‘sell’), citing slowing user growth and increased competition, particularly from Hinge.

• Analysts also flagged uncertainty around Bumble’s rebranding efforts and its ability to regain momentum.

• In its recent earnings Bumble reported a -7.7% revenue drop in the first quarter, citing an overemphasis on user growth which according to the CEO “came at a hidden cost.”

• Shares are now down over -33% year-to-date as the company struggles to reverse declining engagement trends.

🚀 Stablecoin Issuer Circle Soars 247% After Blockbuster IPO

• USDC Stablecoin Issuer Circle ($CRCL) surged 168% on its NYSE debut and climbed another 29% the next day to finish the week at a 247% gain from its IPO price.

• Circle’s USDC stablecoin has facilitated over $25T in transactions and holds a $61B market cap, second only to Tether.

• Circle joins Coinbase, Mara Holdings, and Riot Platforms as one of the few pure-play crypto companies to list in the U.S.

• This comes only weeks after Coinbase, which has a revenue share agreement with Circle, joined the S&P 500

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

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