Tesla and SpaceX Set to Lose More Than $380 Billion This Week
Key Facts
Tesla and SpaceX are on track to lose more than $380 billion in combined market value during the November 2–6 trading week, after their shares extended declines on Thursday following losses in the previous session. Reuters reported that Tesla shares fell more than 11% on Thursday, while SpaceX shares dropped about 9%. The declines followed the U.S. midterm elections, in which Democrats took control of both the House and the Senate, according to the Associated Press. Investors link their concerns to the possibility that a Democratic Congress will tighten scrutiny of Musk’s companies and data center projects. Reuters estimated that the combined market-value loss for the week exceeded $380 billion.
The Associated Press had estimated that Tesla lost about $40 billion in market value on Wednesday, bringing its valuation to $1.54 trillion. In the same session, SpaceX lost about $40 billion in market value, putting its valuation at $1.83 trillion. The news agency said Musk lost about $45 billion of his net worth on Wednesday, and Forbes valued his fortune at $865.6 billion after the decline. The moves came in a session when the S&P 500 rose 1.6% and the Nasdaq gained 1.4%. Those Wednesday estimates apply to that session alone, while Reuters’ weekly tally includes Thursday’s decline and the continuation of losses.
The political shift coincided with most Republican House candidates backed by Musk failing to win: only 3 of 43 candidates won, 33 lost, and 7 races remained undecided as of Wednesday evening. Musk had spent at least $445 million to help Republicans retain control of Congress, according to the Associated Press. Democrats also won control of the Texas House and a U.S. Senate race, and won the state’s gubernatorial race. The news agency said their statewide win in Texas was the first in more than 30 years. Their campaign criticized Musk and the tax breaks and grants received by his companies.
Concerns about the two companies’ businesses center on artificial intelligence and data center projects. Reuters reported that more than half of SpaceX’s third-quarter sales came from leasing computing capacity. Goldman Sachs analysts estimated that Democratic gains at the state and local levels could lead to a short-term pause in data center construction. That could affect about 45% of planned additions to U.S. power capacity, according to an estimate Reuters published during election week. The news agency also reported concerns that a Democratic Congress could tighten oversight of Starlink and Musk’s data center projects. The Associated Press said Democrats were preparing to use subpoenas and open investigations into Musk.
Plans shared by Tesla and SpaceX face a political and execution test after Musk announced the Terafab project in October, a Texas chipmaking complex between the two companies that could cost $119 billion. Reuters reported that the election results could complicate a potential merger between the companies. Musk called the idea of a merger “a good idea” during SpaceX’s third-quarter earnings call and said special committees at both companies were studying a potential deal. A Boston University analyst said, according to a Reuters report, that Musk’s ties to the Trump administration and his companies’ direct relationships with the government could increase his exposure to political scrutiny. EL7 data records SPCX’s close at $135.92 on November 4 and TSLA’s close at $343.69 on November 5; the two closes are from different sessions.