Tesla and SpaceX shares fall after Democrats gain power in Congress

Post-election selloff

Business Insider Africa reports that Tesla and SpaceX stocks kept falling for a second day on Thursday after the midterm blue wave returned Democrats to power in Congress and across the US. By the close of trading, Tesla had dropped 14% over two days, while SpaceX was down about 13%.

From EV optimism to merger concerns

The article says investors first considered whether Democratic control could be positive for electric vehicles and Tesla. That view was quickly overtaken by concern about what the election results could mean for Elon Musk’s broader business interests, especially a possible SpaceX-Tesla merger that had been viewed as an important bullish factor for investors this year.

Analysts say merger timing looks more difficult

Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, told Business Insider that he thinks the merger is now at risk. He said it could be hard to complete because of volatility, high interest rates, and a lack of investment. Gerber, who once supported Tesla more strongly, is now a public critic of Musk, although he still says he is more bullish on SpaceX and notes that his firm holds a position in it through a previous stake in X.

Possible scrutiny from Congress

The report says Democrats could increase regulatory scrutiny of any merger discussions and could even require Musk to appear before Congress, citing reports that he recently limited Starlink service to Ukraine during the war with Russia. Gerber also said Musk’s situation may be more complicated now that he has moved his companies’ headquarters to Texas, which he described as entering a new political phase with a Democratic governor.

Timing, subpoenas, and other risks

Gordon Johnson, CEO of GLJ Research, also said the Tesla-SpaceX merger could be in danger after the elections. He said the issue is “timing and scrutiny,” adding that the plan was to announce the deal in the first half of 2027 and close it while Trump is still in office. Johnson said a merger vote would now happen while Democrats have subpoena power over topics including Starshield, Ukraine throttling, DOGE, and SpaceX’s related-party financing.

Wider market pressure and data center concerns

Business Insider Africa says SpaceX was also caught up in a broader selloff that hit data center operators and AI infrastructure stocks on Thursday. The iShares Semiconductor ETF was heading for its worst day since 2020, and the Nasdaq 100 fell 6% into a formal correction during the session. The article says investors fear Democrats could tighten oversight and regulation of data centers, which would matter for SpaceX because the company’s AI ambitions are a major part of its growth case. It also notes that the blue wave affected states central to the data center boom, especially Texas and Georgia, and says Texas is expected to account for up to 30% of data center development through 2030.