SpaceX, Tesla extend losses as midterm results cloud data center, merger outlook
TSLA•SpaceX shares fell nearly 9% and Tesla shares more than 11% on Thursday, putting the companies on track to lose over $380 billion in combined market value this week. Investors weighed possible tougher oversight, data center constraints and regulatory hurdles for a potential merger.
1. Shares extend losses
SpaceX and Tesla shares fell on Thursday, extending losses from the previous session as investors worried Democratic wins in the U.S. midterm elections could slow data center construction and bring tougher scrutiny of Elon Musk’s businesses. The companies were on track to lose more than $380 billion in combined market capitalization this week.
2. Data center exposure
More than half of SpaceX’s third-quarter sales came from renting out computing capacity, while Tesla’s energy unit is pitching storage systems to data center operators. Goldman Sachs analysts estimated that Democratic wins at the state and local level are likely to lead to short-term data center moratoria, potentially affecting about 45% of planned U.S. data center capacity expansion. Musk announced in October that Terafab, a joint Tesla-SpaceX chip manufacturing complex in Texas, would cost up to $119 billion.
3. Merger questions
Analysts said the election results could complicate a potential merger. Musk said on SpaceX’s third-quarter earnings call that a merger with Tesla would be a “good idea” and that special committees at both companies were exploring a potential deal.
