Tesla · SpaceX · Markets · 5 Nov 2026

Tesla and SpaceX slide after the midterms. What a Democratic Congress can and can't do to the merger

SpaceX closed down 3.8% and Tesla down 3.3% on Wednesday after Democrats won both houses of Congress. The new Congress isn't seated until 3 Jan 2027. No merger terms exist yet. Here's what Congress can and can't do to a Tesla–SpaceX deal (as of 5 Nov 2026).

From Alex RTesla · SpaceX · Markets

Updated 9 Nov 2026

The editor holds Tesla and SpaceX shares. Supercharged Daily is independent and not affiliated with either company. Nothing here is financial advice.

The editor holds Tesla and SpaceX shares. Supercharged Daily is independent and not affiliated with either company. Nothing here is financial advice.

SpaceX closed down 3.8% at $135.92 on Wednesday, 4 Nov, and Tesla closed down 3.3% at $385.19, according to the Los Angeles Times. Earlier the same day, Bloomberg had Tesla down about 5% and SpaceX down 6.9% in premarket trading (via The Star). The closing losses were smaller than the early drop.

Update, 6 Nov: the selling continued on Thursday, 5 Nov. Tesla closed at $343.69, down 10.77%, and SpaceX closed at $123.62, down 9.05%, according to StockAnalysis price histories for SpaceX (one other source shows SpaceX at $123.39, so treat the last cent as approximate). CNBC gave the reasons as investor worry about new congressional probes and tighter regulation of Musk's companies, possible delays to SpaceX's Texas data-center capacity (Deutsche Bank), and doubt over a SpaceX–Tesla merger. The figures above are the 4 Nov closes, as reported that day.

The Associated Press says Democrats won control of the House and Senate. In Texas, the AP called the governor's race for Democrat Gina Hinojosa over Greg Abbott and the US Senate race for Democrat James Talarico over Ken Paxton. Both companies are headquartered in Texas. For the data-center permitting risk that follows from Hinojosa's campaign pledges, see my earlier piece.

Musk poured nearly $450 million into Republican campaigns, Bloomberg and the LA Times report. He posted on X at 1:12am ET on Wednesday (10:12pm PT Tuesday):

Where the merger stands

• Done: Tesla and SpaceX have each formed special committees of independent directors to study a merger. Musk said so on SpaceX's 20 Oct earnings call, and SpaceX's subsequent 10-Q repeated it (TechCrunch).
• Not done: There are no agreed terms and no exchange ratio. Musk said a deal isn't certain. Any Tesla deal would need approval from holders of 50% of all outstanding Tesla shares, not just of those who vote, he said on the call.
• Reported, not confirmed: Bloomberg's sources say there's a push to announce a deal in the first half of 2027 so it can close while President Trump is still in office.
• Pledges, not law: Rep. Yassamin Ansari (D-Ariz.) wrote that a pause on advanced AI development should be "top of the Democratic agenda on day 1," the LA Times reports. Hinojosa, in her victory speech, criticised "powerful people who have gotten very comfortable running this state." Neither statement is a bill or a rule.

Why the calendar matters

The new Congress takes office at noon on 3 Jan 2027, under the 20th Amendment. Until then, the current Congress keeps its committee chairs. After 3 Jan, Democrats run the committees, which means subpoenas and hearings. They don't get a veto over a merger. Antitrust review sits with the Justice Department, which answers to the president.

Vikram Rai of First New York told Bloomberg: "Though Congress can't single-handedly kill a deal, empowered Democrats may be able to slow it down." UC Irvine professor Charles Anthony Smith told the LA Times that a later Justice Department "might very well say there are problems with this."

In practice, that makes the first half of 2027 a timing race. If a deal is announced and reviewed under today's Justice Department, the review path looks different from one that drags past the next election. A slower process with hearings is the realistic downside for the next two years. A blocked deal is a bigger leap.

The business exposure, briefly

The planned Terafab chip plant near College Station is probably the least exposed piece. SemiAnalysis's Jeremie Eliahou Ontiveros told the LA Times that domestic chipmaking is "hugely bipartisan," but that data centers planned next to it are "unclear." SpaceX's computing capacity was 1.7 GW as of 30 Sep, Yahoo Finance reports from the company's quarterly results. How Texas regulates new sites is covered in the Texas piece.

Orbital data centers are still years away. SpaceX asked the FCC in January to authorize up to 1 million compute satellites. Executives have talked about first demos by late 2027 and wider deployment from 2028, Reuters reported via Yahoo Finance. Those are plans. The GAO warned in April that cooling hardware in orbit is still unproven at scale.

My read

A drop of a few percent after an election isn't new for Tesla. After Trump won in 2024, the stock gained more than 90% in about a month, then gave it back, Bloomberg notes. What changed this week is the merger timeline. The window for an easier review is now a hard calendar, and the next filings from the special committees will tell us whether that deadline is realistic. Musk's post doesn't change any of that.

Sources: Los Angeles Times (5 Nov 2026); Bloomberg via The Star (5 Nov 2026); TechCrunch on the 20 Oct special committees; Yahoo Finance (5 Nov 2026); AP on Congress, the Texas governor race and the Texas Senate race; U.S. Constitution, 20th Amendment; @elonmusk on X. Figures as of 5 Nov 2026.

— Alex R