In investing, a selling opportunity often becomes painfully obvious only after the price of a stock drops dramatically. However, some retail investors sensed trouble for Tesla stock even before its sharp decline in 2025. Following President Donald Trump’s election, investor enthusiasm surged, driving Tesla’s stock price upwards. Yet, this year has seen a notable downturn, with shares plummeting by as much as 53% from the all-time high of $479.86 in December to $248.71 at Friday’s close.
While certain retail investors are choosing to double down and hold their shares, others have opted out entirely. Business Insider reached out to three former Tesla shareholders to understand their reasons for selling and avoiding the stock’s downward trend.
Musk’s Persona Influences Decisions
A shared influence in the decisions of all three investors was Elon Musk’s polarizing personality. Mikhaela Delahunty purchased three shares of Tesla in August 2023 but sold them a year later, in August 2024. “When Elon started forming an alliance with Trump, I began to reconsider the branding implications for typical Tesla consumers,” remarked Delahunty, a PR professional.
Dan Chan, a corporate magician, sold his Tesla shares in early January, prior to the presidential inauguration. Musk’s leadership style and political involvement were decisive factors in his decision. Chan’s connection to Musk goes back to his early employment at PayPal in 1999 when Musk was still CEO. According to Chan, Musk’s political investments and strategies were the tipping point for him. He was concerned that Musk’s controversial leadership would undermine investor confidence, prompting him to sell his shares—some of which he had held since 2016 and realized a remarkable 1,900% gain on.
Chan also draws parallels between Musk’s current dealings with DOGE and his past at PayPal, stating, “The reason he got booted from PayPal was that he attempted to change the programming language while we were losing money. His impulsive actions aren’t conducive to a stable working environment.”
Jonathan Goodman, a business owner, bought Tesla stock during the pandemic, believing Tesla was a leader in the electric vehicle sector. Initially, he appreciated Musk’s assertive personality but ultimately decided to sell due to Musk’s continued ties with the Trump administration. Goodman expressed, “Before Musk’s controversial statements and actions related to the new presidency, Tesla was a pioneer in the electric vehicle industry. I hold respect for effective spokespeople, and Musk has been that for various initiatives.”
However, after witnessing Musk perform a gesture resembling a Nazi salute at the inauguration, Goodman exited his investment.
Fundamental Concerns
For Goodman, Musk’s persona was the primary motivator behind his decision to sell, as he still believes in the company’s robust business fundamentals. “If Elon Musk were to resign from Tesla tomorrow, I would consider re-investing,” he stated.
In contrast, Delahunty and Chan’s decisions to sell were influenced not only by Musk’s behavior but also by emerging concerns about the company’s product quality. “I began to notice recalls, like the Model Y memory issue, and battery problems, which raised my concerns,” said Delahunty, who noted that Tesla recently announced another recall related to its Cybertrucks.
The combination of product issues and Musk’s political relationships led Delahunty to perceive that Tesla might lose its appeal among consumers. Chan echoed this sentiment, citing worries about the company’s approach to self-driving technology, arguing that Musk was not prioritizing safety mechanisms and appeared to be cutting corners.
After selling her shares, Delahunty noticed significant optimism surrounding Tesla stock. Yet, she remains satisfied with her decision to sell before the peak. “It was interesting to see it being recommended by reputable news sources while remaining highly volatile. I’m very happy with my timing,” she concluded.
