Key Points
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SpaceX stock is recovering on Friday after a two-day slide, tied to Tuesday’s Democratic midterm sweep, took it below its $135 IPO price.
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The wins included a Texas Senate seat and the governorship, and the governor-elect ran in part on pausing new data center construction, which is key to SpaceX’s growth plans.
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None of what spooked investors has gone away, and while it is all speculation for now, I think it’s a legitimate fear and one more substantial risk for SpaceX stock.
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Space Exploration Technologies Corp. (NASDAQ:SPCX) stock is recovering, up 7.3% as of 1:56 p.m. ET on Friday, Nov. 6, after a two-day slide that took it below its IPO price of $135.
The S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC) are up 0.8% and 1.4%, respectively.
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Why SpaceX stock fell after the midterm election
Shares of the rocket, satellite, and AI company fell about 13% through two trading sessions following Tuesday’s sweeping midterm victory for the Democratic Party.
The wins, which included a U.S. Senate seat and the governorship in Texas where SpaceX is based, raised the odds that Elon Musk’s companies would face increased scrutiny. The SpaceX CEO donated a whopping $474 million to Republican efforts across the U.S., including $224 million in Texas.
And critically, SpaceX’s data center building is key to its growth plans. The now governor-elect of Texas ran, in part, on the promise of pausing new data center construction.
Image source: The White House.
Today’s bounce appeared to be from investors who believe the previous two days were an overreaction.
Political and data center risks for SpaceX stock
Still, none of what spooked investors this week has gone away, though to be clear, it is all speculation at this point. I think it’s a legitimate fear and one more substantial risk to add for SpaceX stock.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Space Exploration Technologies. The Motley Fool has a disclosure policy.
