Tesla and SpaceX shares drop after Elon Musk's election bet backfires
Shares in Tesla and SpaceX fell around 4% premarket on Wednesday after the Democrats won a string of midterm victories in Texas.
Tesla and SpaceX, both based in Texas, suffered significant share drops after a series of Democratic victories in the state during Tuesday's midterm elections. Elon Musk, the CEO of both companies, reportedly spent over $200 million in an unsuccessful attempt to keep Texas as a Republican stronghold. The Texas results saw Democratic candidates James Talarico and Gina Hinojosa winning key Senate and gubernatorial races, respectively.
Musk's investment of roughly $224 million in Republican candidates, including $158 million alone in September, will be particularly damaging to his companies. Should the market share declines persist at the opening bell, the combined market value of Tesla and SpaceX could plummet by over $140 billion. Musk, who relocated SpaceX's headquarters to Texas in 2024 following criticism of the state's lawmakers, now faces the potential re-regulation of his public companies by Democratic officials.
The billionaire, who donated at least $446 million to Republican candidates and groups during the election, now finds himself considering alternative plans amidst the Texas political shift. Musk commented on X, suggesting the development of data centers in space as an appealing prospect for now.
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