Tesla and SpaceX Shares Plunge After Democratic Election Sweep
Tesla Inc. and SpaceX shares fell sharply as investors feared Democratic control of Congress would increase regulatory hurdles for Elon Musk's business ventures.
Shares of Tesla Inc. and Space Exploration Technologies Corp. declined sharply following a Democratic sweep of the U.S. House and Senate. Tesla Inc. shares dropped approximately 13% over two days, while SpaceX stock fell more than 9% to $123.31 on Thursday. The sell-off reflects investor anxiety that Democratic control of Congress and potential shifts in the White House will create regulatory hurdles for Elon Musk's ventures, specifically threatening AI data center buildouts and the Terafab semiconductor project in Texas.
Financial markets signaled heightened instability as the cost to protect SpaceX debt against default reached a record high. Five-year credit default swaps widened by as much as 14.6 basis points to 284.3 basis points a year. This surge in risk coincided with a broader equity market selloff among chipmakers. The political shift also cast doubt on a potential merger between Tesla Inc. and SpaceX, which sources suggest may be delayed until early next year to avoid further complications.
Despite the market volatility, SpaceX reported strong third-quarter revenue of $14.575 billion and recently secured a multiyear deal with Qualcomm Inc. to build the ground network for Starlink Mobile. The post-election stock slide resulted in a $33 billion decrease in the personal wealth of Elon Musk.
