Tesla and SpaceX Shares Drop Over 4% Premarket After Musk's Election Bet Backfires in Texas
Democratic wins in Texas midterms trigger a >4% premarket slide for Tesla and SpaceX, threatening $140B in combined market value.
Shares of U.S. electric vehicle maker Tesla and aerospace company SpaceX fell more than 4% in premarket trading on Wednesday. This reaction followed a string of Democratic victories in the Texas midterm elections, including James Talarico defeating Republican nominee Ken Paxton for the Senate seat and Gina Hinojosa unseating Governor Greg Abbott.
According to Business Insider, Elon Musk spent approximately $224 million backing Republican candidates in Texas, with $158 million of that total coming in September alone. With both companies headquartered in Texas, the Democratic win signals a potential return to regulation by Democratic officials. If the drops hold at market open, Musk's two public companies could lose more than $140 billion in combined market value.
Wedbush analyst Dan Ives noted that Musk "needs to find the path forward with Texas now with a Democratic win." Musk responded on social media, stating that SpaceX's plan to build data centers in space looked "pretty appealing right now," and jokingly added that his "election-interfering space lasers didn't work this time."