Musk's Tesla and SpaceX Shed $450 Billion in Two Days as Democrats Take Congress

Tesla and SpaceX, both run by Elon Musk, have erased about $450 billion in market value in two sessions. Tesla closed Election Day at $398.50 and was trading near $342 by Thursday afternoon, down 14% and roughly $225 billion lighter. SpaceX slid 12%, landing around $125 from $141.31, a drop of about $227 billion.

Most of the bloodletting came Thursday, when Tesla fell about 11% and SpaceX about 8%. The Nasdaq was headed for its worst day in 18 months as investors bailed on chip and data-center names, spooked by the idea that new leaders in Washington and the states could slow data-center construction. SpaceX is now trading below its $135 IPO price from June.

The blunt explanation is politics. Democrats control both chambers of Congress, and Musk, a top ally of President Donald Trump, is an obvious target. Texas Republican Sen. Ted Cruz said on the All-In podcast on election night that Democrats had signaled they would use subpoenas to go after Musk. Texas voters also elected a Democratic attorney general for the first time since 1994.

SpaceX has its own extra headache. Last month it committed to a roughly $40 billion lease for AI chips with an entity managed by Apollo Global Management, with payments beginning in the first half of 2027. According to Bloomberg, Wall Street is now trying to offload pieces of that deal to other investors, with Goldman Sachs and Apollo leading the push.

The underlying business still works. SpaceX posted $2.79 billion in operating income and $4.4 billion in net income last quarter, though it remains $413 million in the red for the first nine months of the year. That net income leaned on a $390 million tax benefit and a $561 million unrealized gain on its Boring Company stake, and two customers accounted for about half of quarterly revenue. Even after the selloff, SpaceX carries a valuation near $1.7 trillion, about 150 times annualized third-quarter operating income.

Tesla's bull case leans on robotaxis. CFO Vaibhav Taneja told analysts on October's earnings call that robotaxis should make a real dent in sales and profits in 2027, and the Cybercab was slated to launch in Dallas this month. Musk claimed Tesla will eventually handle a majority of all passenger miles on earth, unless governments stop it, though Taneja conceded the business hasn't hit its 30 cents per mile cost target. The two firms are also tangled together: Tesla's filing lists a $2.87 billion SpaceX stake as of Sept. 30, and SpaceX owes Tesla $729 million, mostly for Megapack batteries still on order.