Tesla, SpaceX Fall About 10% After Musk’s Texas Picks Lose
The sell-off followed Republican defeats in Texas, but a broader decline in AI-linked stocks also weighed on the market.
Tesla fell about 11% and SpaceX about 9% on Thursday, the second trading day after Democrats won control of Congress and candidates backed by Elon Musk lost in Texas, where both companies are headquartered.
CNBC calculated that the two companies lost more than $420 billion in combined market value over the two sessions. It described Musk as the biggest backer of Republican candidates and causes in the midterms, and said most of those he backed were beaten.
The Texas results hit closest to home. Democrat James Talarico won the US Senate seat over Ken Paxton, the state attorney general, and Gina Hinojosa won the governorship. The New York Times counted $474 million in Musk donations to political groups this cycle, including about $212 million behind Paxton. The count excludes dark money and the last three weeks of filings.
Investors are pricing in tougher oversight. Dan Ives of Yorkville Ives said in a Thursday note that a SpaceX-Tesla merger now faces a "much tougher regulatory roadmap" in 2027.
The election was not the only thing moving the market. Al Jazeera reported that AI-linked stocks fell sharply on Thursday and pulled US indexes lower. The Motley Fool said investors also feared the new political landscape could slow data-centre construction, which both companies are betting on.
Both stocks fell hardest on a day when AI shares sold off broadly. That means Thursday's drop cannot be cleanly assigned to the election.
The new Congress is not seated until January, so any investigation of Musk's companies would start after that.