Elon Musk Is Back Working With the U.S. Government. Why That Could Be Trouble for SpaceX's Stock
2026-10-05 18:20
•David Jagielski, Cpa •The Motley Fool
•• •• Axe Cap view
Elon Musk’s Government Role: A Red Flag for SpaceX’s Valuation
Musk’s new government taskforce role could spook investors in SpaceX, raising risks around its already stretched valuation.
Elon Musk’s appointment to co-lead Project Meridian, a U.S. government taskforce, may sound impressive but should raise alarms for SpaceX investors. Unlike Tesla, which is profitable and publicly traded, SpaceX’s $2.2 trillion valuation rests almost entirely on future potential rather than operational profits. Musk’s past government roles have stirred negative press and sharp stock losses, as seen with Tesla’s 34% slide in early 2025. Given the South African market’s sensitivity to geopolitical and global tech risks, any headline-driven volatility in Musk’s ventures often pressures Rand-linked stocks, especially ones tied to global innovation like Naspers or Prosus. The USD/ZAR could also shrug higher as global risk aversion ticks up, making offshore tech exposure less appealing. If Musk’s government role triggers regulatory or media scrutiny, SpaceX’s speculative valuation could deflate quickly. That said, if Musk leverages this position to secure lucrative contracts, the narrative might swing positive. Investors should keep a close eye but tread cautiously. this is just our opinion and not financial advice
Avoid direct exposure to SpaceX-related assets and be cautious with Naspers and Prosus until Musk’s government involvement clarifies; lean on USD/ZAR hedges to manage risk. Consider trimming high-multiple tech exposure for more stable sectors like financials.
- Naspers
- Prosus
- USD/ZAR
- Negative media spotlight on Musk’s government ties
- Global tech sector risk contagion affecting Rand and JSE tech counters
6/10
Elon Musk has been appointed to co-lead 'Project Meridian,' a 120-day government taskforce studying future warfare capabilities. The article warns that SpaceX investors should be concerned, as Musk's previous government involvement with the Department of Government Efficiency led to negative press and a 34% decline in Tesla's stock. SpaceX, with its $2.2 trillion valuation and lack of profitability, could be particularly vulnerable to similar negative sentiment surrounding Musk's latest government role.
Our take is based on reporting first published by The Motley Fool.