Tesla and SpaceX shares fall after Democrats regain control in Congress

Post-election selloff hits both stocks

Business Insider reports that Elon Musk’s spending on the Republican midterm effort was followed by further losses for his companies after the election. Tesla and SpaceX both declined again on Thursday, extending a selloff that followed what the article describes as a blue wave, with Democrats regaining power in Congress and across the country. By the end of trading Thursday, Tesla had fallen 14% over two days, while SpaceX was down about 13%.

Investors shift from EV optimism to broader concerns

The article says some investors initially thought a Democratic win could be positive for electric-vehicle companies such as Tesla. That view was quickly overtaken by concern over what the election could mean for Musk’s wider business interests. Business Insider says the focus shifted to the possibility of a Tesla-SpaceX merger, which had been an important reason some investors were bullish on the companies this year.

Analysts say a merger could face more scrutiny

Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, told Business Insider he thinks a merger is now at risk. He said it may be difficult to complete because of volatility, high interest rates, and a lack of investment. The report says Democrats could add regulatory scrutiny to any merger discussion and could even bring Musk before Congress because of reports that he recently limited Starlink service to Ukraine during its war with Russia. Gerber, once a Tesla bull, is now an outspoken critic of Musk, though he remains more positive on SpaceX and says his firm still has exposure to it through a previous X stake.

Concerns about timing, politics, and oversight

Business Insider also quotes Gordon Johnson, CEO of GLJ Research, who said the merger outlook may be worse because of timing and scrutiny. He said the plan was to announce the deal in the first half of 2027 and close it while Trump is still in office. In his view, that timeline no longer fits if Democrats hold subpoena power over issues including Starshield, the Ukraine throttling report, DOGE, and SpaceX’s related-party financing.

SpaceX joins a broader tech selloff

The article says SpaceX was also pulled into a wider market drop affecting data center operators and AI infrastructure companies. 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. Business Insider says investors fear Democrats may tighten oversight of data centers, which would matter for SpaceX because its AI plans are a key part of its growth case. The report adds that the blue wave affected states central to the data center boom, especially Texas and Georgia, and says Texas could account for up to 30% of data center development through 2030.