Trump allies' company stock prices soar after election
Tech billionaire Elon Musk and President-elect Donald Trump have spent time together just about every day since the election. The pair has addressed lawmakers in Washington, D.C., sat ringside at a UFC fight in New York City, and attended a rocket launch in South Texas.
Investors appear to have taken notice. Shares of Musk-run Tesla have soared nearly 40% since Trump won re-election nearly two weeks ago. But the electric carmaker is not the only company affiliated with a Trump ally that has enjoyed a stock surge in the aftermath of Trump's victory.
Apollo Global Management, an investment firm whose CEO, Marc Rowan, is said to be under consideration for Treasury secretary, as first reported by The New York Times, has seen its share price jump more than 12%.
Likewise, Palantir, a data analytics firm founded by longtime Trump backer Peter Thiel, has undergone a rise of 23% since Election Day.
GEO Group, a private prison company, made a $500,000 contribution to a pro-Trump Super PAC, while two top executives at the company, Brian Evans and George Zoley, each made personal donations in support of Trump. The company’s shares have skyrocketed 87% since the election.
The stock value of the companies noted has far outpaced the S&P 500. That index has climbed about 2.5% since Election Day.
Tesla did not immediately respond to an ABC News request for comment, nor did Apollo Global Management, Palantir, or GEO Group.
Tom Essaye, president of financial data firm Sevens Report Research, said the strong gains for a range of stocks affiliated with Trump allies indicate a view among some investors that Trump will reward friends with favorable treatment.
“The market is incredibly sensitive to try to capture any edge in any stock that it can possibly find,” Essaye told ABC News. “This is absolutely a reflection of people’s perception of Trump.”
The Trump transition team did not immediately respond to ABC News’ request for comment.
A new presidential administration typically bodes well for some industries and worse for others, depending on the policy priorities of an incoming president, experts told ABC News. Trump has touted policy proposals widely viewed as pro-business, such as loosened regulations and an extension of the signature tax cut measure enacted during his first term.
A portion of the increase in share price for some of the Trump-connected firms may stem from that overall shift toward business-friendly policy, some experts said.
"It’s not unusual for stocks to go up in sectors that look like the new administration will be more favorable to them than past policy has been," Tom Rogers, the founder of CNBC, told ABC News.
However, the price jump for specific stocks tied to Trump allies also marks an altogether different trend that arises from the view of Trump as a transactional leader who may face fewer guardrails during a second term, Rogers said.
“You have the new layer with Trump where he tends to be someone who can favor companies or disfavor companies based on his view of their politics or his view of their level of support for him,” Rogers added. “It’s natural that the market will take those factors into account."
In recent weeks, some top CEOs have appeared to seek improved relations with Trump.
Days before this year's election, Jeff Bezos, the executive chairman of Amazon and owner of the Washington Post, blocked the newspaper’s planned endorsement of Vice President Kamala Harris. In an op-ed for the newspaper addressing the decision, Bezos said, “no quid pro quo of any kind is at work here.” Bezos did acknowledge that the decision could present "the appearance of conflict" of interest.
In the days following the election, Trump received congratulatory messages from Bezos, Apple CEO Tim Cook, Google CEO Sundar Pichai, and OpenAI CEO Sam Altman, among other top executives.
It's also possible that Tesla might suffer under the Trump administration. The president-elect has sharply criticized the electric vehicle industry and vowed to eliminate a subsidy made available to those who purchase an electric car. Still, Tesla’s stock price has climbed alongside Musk’s emergence as a close advisor to Trump, including being selected as the co-lead of a new government efficiency commission.
“The fact that Elon Musk is so close to the administration – and, in fact, will be in the administration in some capacity – suggests that for all the talk, his companies won’t be hurt,” Nejat Seyhun, a finance professor at the University of Michigan who studies market activity, told ABC News.
A slew of other Trump allies have seen their firms make gains since the election.
TKO Group Holdings is the parent company of the Ultimate Fighting Championship, which is led by CEO Dana White, who addressed Trump supporters at the Republican National Convention as well as the rally at Madison Square Garden last month. Shares of TKO Group holdings have climbed more than 10% since Trump’s victory.
A spokesperson for TKO Group Holdings declined to respond to ABC News' request for comment.
Steve Schwarzman, a Republican megadonor who endorsed Trump in May, leads asset management giant Blackstone. Shares of the company have jumped about 9% in value since Election Day. Energy Transfer, an energy pipeline company whose Executive Chairman Kelcy Warren donated $5 million to a pro-Trump super PAC, has seen its share price increase more than 6% over the past two weeks.
Neither did Blackstone nor Energy Transfer immediately responded to ABC News requests for comment.
To be sure, some businesses with ties to Trump or his allies have seen their shares decline in value since the election. The stock price of Las Vegas Sands, a casino owned by Trump megadonor Miriam Adelson, has dropped about 2% over the past two weeks. Trump-owned Truth Social has seen shares decline more than 13% since Election Day.
Some experts told ABC News that the surge for some companies with connections to Trump may soon fizzle out.
“The first time that somebody who supposedly was in good favor with the Trump administration doesn’t get something their corporate interests are looking for, the air may come out of these things,” Rogers said. “For the time being, it’s probably a logical bet.”
Seyhun, of the University of Michigan, agreed. “This initial buying is very much a fear of missing out,” he said.
