While SpaceX (NASDAQ: SPCX) stock has been on an overall downtrend in the last 30 days of trading, the extended session leading into Thursday, November 5, marked a significant milestone as the equity dropped below its initial public offering (IPO) price.
The latest 1.99% drop from $135.92 at the Wednesday close to $133.22 at press time appears generally linked to the Democratic sweep in the U.S. midterm elections, held on November 3.
This reaction is, arguably, linked to the expectation that Elon Musk’s business empire is about to face increased scrutiny given his links with President Donald Trump’s administration and involvement with the Federal government.
Advertisement
Is SpaceX’s Starshield about to face scrutiny over Ukraine air defenses?
Since the Republicans took the White House, Musk has done controversial work for the U.S. on multiple occasions.
A very recent example came in October when Ukraine briefly faced disruptions in its access to SpaceX’s Starlink and Starshield.
Notably, effectively every party deflected responsibility, with, for example, Elon Musk claiming the government has control over the military part of the network and President Donald Trump saying he does not know who gave the order to disrupt the service.
The possible fallout from Elon Musk’s D.O.G.E. operation
Additionally, controversy over SpaceX and Tesla (NASDAQ: TSLA) CEO’s actions dates back to the very start of the commander-in-chief’s second term and the so-called Department of Government Efficiency (D.O.G.E.).
While D.O.G.E. was presented as a means of reducing government waste, with some early statements implying it was looking to save as much as $2 trillion per year, the organization seemingly failed at its task given the increase in the deficit since early 2025.
Furthermore, Musk famously diminished the U.S. government, with the most prominent example coming in the form of the dissolution of the United States Agency for International Development (USAID).
Advertisement
Critics of the Republican administration highlighted that many of the cuts hampered the U.S.’ ability to properly organize air traffic and track diseases such as the Bird Flu in early 2025.
Others have also warned that D.O.G.E. might have jeopardized national security given the relative secrecy of its work, the vast authority it had to run rampant in government systems, and the unorthodox profile of the average employee of the agency, whose legitimacy has also been called into question.
Is the SpaceX AI business about to face a crackdown?
Circling back to SpaceX, the company might also suffer a slowdown after the Democratic Party took over Congress and multiple governorships due to its super intelligence (SI) – President Donald Trump’s name for artificial intelligence (AI) – business.
On the one hand, the Democrats have been calling for more stringent regulation of AI, even calling for a pause or an outright ban. On the other hand, data centers have – lacking sufficient capacity in the national energy grid – come under scrutiny for pollution, with Musk’s facilities allegedly running on vast clusters of gas turbines.
Why Tesla stock might benefit from the 2026 ‘blue wave’
Interestingly, Tesla stock also suffered a downturn in the wake of the ‘blue wave’ despite the eclectic vehicle (EV) maker arguably being a likely beneficiary of the political shift.
Much of TSLA shares’ decline and the car company’s struggles can be directly linked to President Trump’s favoring of the fossil fuel industry over renewables, and the discontinuing of tax credits for EV purchases.
Advertisement
Still, this does not make Tesla stock an automatic buy, given the equity’s close connection to Elon Musk’s standing in the public eye, which indicates that any scrutiny of the man can have an even greater adverse impact on his firms.
Featured image via Shutterstock
