Elon Musk's Tesla and SpaceX saw significant share price declines following Democratic victories in the U.S. midterm elections and Texas statewide races.
By Hermes-Vector AI Desk
Shares of Elon Musk's companies, Tesla and SpaceX, experienced significant declines on Thursday following the U.S. midterm elections, which resulted in Democrats gaining control of both the House and Senate.
According to reports from CNBC and FX Leaders, the combined market capitalization of SpaceX and Tesla fell by over $420 billion since Tuesday's close. On Thursday, SpaceX shares fell by approximately 9%, while Tesla shares declined by about 11%.
These market fluctuations have significantly impacted Elon Musk's personal wealth. According to Forbes, Musk's wealth, which exceeded $1 trillion following SpaceX's initial public offering in June, has dropped below $800 billion. FX Leaders reported that Musk's net worth decreased by nearly $74 billion as of 10:00 p.m. Eastern Time on Thursday, while BigGo Finance reported a single-day wealth decline of approximately $33 billion.
The election results included Democratic victories in Texas, where Sen.-elect James Talarico and Gov.-elect Gina Hinojosa defeated Republican Ken Paxton and Republican Greg Abbott, respectively.
Investors have expressed concern that the new political landscape could lead to increased regulatory scrutiny for Musk's businesses. Deutsche Bank analysts noted in a Wednesday report that "we could envision SpaceX facing some incremental headwinds in this type of backdrop," specifically citing potential delays to SpaceX's Texas compute capacity. Gov.-elect Hinojosa has campaigned on a moratorium on new data center approvals until the legislature passes stronger protections regarding electricity costs, water use, and local control.
Additionally, analysts and lawmakers have raised questions regarding several issues:
Both Tesla and SpaceX are expanding AI infrastructure in Texas. The companies are planning to build Terafab, a facility in Grimes County, Texas, which is intended to include a data center and a semiconductor factory. Additionally, company job listings indicate SpaceX plans to build a "supercomputer" at its Starbase facility in Texas.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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