Big meltdown in Musk's companies after the midterm election
Total market value of Tesla and SpaceX decreased by approximately $460 billion after the election
Quick Look
- Tesla shares lost 11 percent and SpaceX shares lost 9 percent on Thursday.
- The total market value of the two companies has decreased by approximately $460 billion since the election results became clear.
- Musk's net worth decreased by $71 billion to $793 billion.
AI-generated summary
Why It Matters
Tesla shares lost 11 percent of their value on Thursday, following a 3.3 percent drop the day before. Since the beginning of the year, Tesla shares have lost approximately 24 percent of their value. SpaceX lost 9 percent of its value on Thursday, following a 3.8 percent drop the day before. The total market value of Tesla and SpaceX has decreased by approximately $460 billion since the election results became clear.
Tesla shares lost 11 percent of their value on Thursday, following a 3.3 percent decline the day before. Since the beginning of the year, Tesla shares have lost approximately 24 percent of their value. Musk's rocket, satellite and artificial intelligence company SpaceX lost 9 percent of its value on Thursday, following a 3.8 percent drop the day before.
Since the election results became clear, the total market value of Tesla and SpaceX shares has decreased by approximately $460 billion.
"Tesla and SpaceX present a special '2 for 1' opportunity as the market tries to reprice the risk of a significant slowdown in data center construction. Momentum is a powerful two-way factor, and there is a rush to the exit in the technology sector until some kind of bottom is seen," said Joe Gilbert, portfolio manager at Integrity Asset Management.
Democrats captured key positions in Musk's home state of Texas, where Tesla and SpaceX are headquartered, and won a majority of seats in both houses of Congress.
The results in Texas attracted particular attention; Gina Hinojosa unseated Republican Gov. Greg Abbott, who had held the state's highest office since 2015. During the election campaign, Hinojosa called for a moratorium on data centers and scrutinized Musk's political donations to Abbott, as well as state tax breaks given to Musk's companies during Abbott's tenure.
According to the Bloomberg Billionaires Index, after the $33.5 billion drop on Wednesday, Musk's net worth decreased by $71 billion to $793 billion. While Musk's fortune is still by far the largest in the world, it has fallen sharply from its peak of $1.3 trillion in June following SpaceX's IPO.
What to Watch
AI outlook — possibilities, not facts
Democratic gains in Texas could lead to a reconsideration of state tax breaks given to Musk's companies.
Possible · Within weeks
Open Questions
- What is the long-term impact of the risk of a data center construction slowdown on Tesla and SpaceX?
- Will Democratic gains in Texas determine how state tax breaks given to Musk's companies change?
- Could SpaceX's planned IPO be affected by these losses?
