SpaceX SPCX shares fell on Friday ahead of a high-stakes Starship test flight, with investors also weighing growing scrutiny of Elon Musk’s potential merger plans involving Tesla.
The stock traded 1% lower on Friday at around 11:45 AM EDT.
Major US indexes also moved lower, with the tech-heavy Nasdaq shedding over 1.6% as investors continued to digest headlines around outgoing Nvidia chief Jensen Huang
Tesla merger faces growing political scrutiny
One factor weighing on SpaceX was increased scrutiny of its potential merger with Tesla.
Bloomberg reported on Thursday that the companies could announce a deal as soon as December.
However, the changing political environment could bring greater scrutiny to merger discussions involving two of the state’s most valuable companies.
At the federal level, Democrats who took control of Congress have signaled plans to investigate Musk’s business and political activities.
Texas Attorney General-elect Nathan Johnson has vowed to take a close look at the potential merger.
“Any merger of companies of that consequence warrants tremendous scrutiny,” Johnson told Bloomberg.
He also raised concerns about the concentration of private and public-sector influence around Musk.
“I don’t want anybody to have such control of the public sector that they can bend public power to their private gain. I think his Empire is at great risk of crossing that line,” Johnson said of Musk.
However, Johnson also indicated a willingness to have discussions with the world’s richest man, who donated heavily, but in vain, to Republican causes during the midterm elections.
Analysts have also highlighted structural obstacles to combining the two companies, particularly the challenge of separating Tesla’s substantial Chinese manufacturing operations from SpaceX’s sensitive US defense contracts.
SpaceX restructures Grok Imagine team
Separately, SpaceX’s AI division laid off roughly 60 employees from the Grok Imagine video-generation team, The Information reported on Friday.
The cuts leave only a small number of employees to maintain the image and video features of the Grok chatbot.
They form part of a restructuring following the earlier integration of xAI into SpaceX.
The move reflects a shift in resources toward coding tools and other priorities, while adding to questions about the future development of Grok’s image and video-generation capabilities.
Starship Flight 15 becomes another major catalyst
Investors are also focused on Starship Flight 15, which is set to take place later on Friday.
The mission aims to achieve a historic recovery of both the Super Heavy booster and the upper-stage Starship using the launch tower’s mechanical arms.
A successful recovery would mark an important advance in SpaceX’s efforts to develop a rapidly reusable launch system.
It could also support denser Starlink deployments and the company’s longer-term ambitions involving orbital computing infrastructure.
KeyBanc on Friday reiterated its Sector Weight rating on SpaceX, while expressing optimism about the upcoming Starship launch.
“The launch is a key milestone for the program, as SPCX seeks to demonstrate fixes and enhancements implemented following some anomalies encountered during Flight 14 in September 2026,” the brokerage said.
Morgan Stanley analyst Adam Jonas also reiterated an Overweight rating on SpaceX, maintaining his $300 price target.
Jonas described a successful catch of the Starship and Super Heavy booster as “one of the most significant potential catalysts in SpaceX’s nearly 25-year history.”
The upcoming flight therefore represents an important milestone for the company as it works to demonstrate the improvements made following Flight 14 and advance its reusable rocket program.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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