SpaceX and Tesla shares fell about 9% and 11%, respectively, on Thursday afternoon as investors worried that Elon Musk could face new congressional investigations and his companies could encounter stricter regulation after the US midterm elections.
As if the election results were not enough, which saw the Republican Party, which Musk poured nearly half a billion into, being pummelled out of the US Congress, the turmoil at the bourse may just be the beginning of the world’s richest man’s chagrin.
The declines, which coincided with a broader technology-sector sell-off, pushed combined market-cap losses for SpaceX and Tesla to more than $420 billion since Tuesday’s close.
As per a CNBC report, by the close of trading on Thursday, SpaceX and Tesla had lost a combined approximately $456 billion in market capitalisation.
According to Forbes, which keeps a reliable database of the richest in the world, Musk’s net worth, which exceeded $1 trillion after SpaceX’s initial public offering in June, has now fallen below $800 billion. He lost about $90 billion over the past week but remains the world’s richest person.
Musk was the largest donor to Republican candidates and causes during the midterms, contributing more than $470 million, the Financial Times first reported.
Despite his support for the GOP’s fundraising efforts, most of the candidates Musk backed lost their races.
Democrats secured control of both the House and Senate. In Texas, home to both Tesla and SpaceX, Democratic Sen.-elect James Talarico and Gov.-elect Gina Hinojosa defeated longtime Musk allies: state Attorney General Ken Paxton and Gov. Greg Abbott.
Tesla and SpaceX are expanding their AI infrastructure in Texas and plan to build Terafab, a massive complex in Grimes County that will house both a data center and a sprawling semiconductor factory.
According to company job postings, SpaceX also intends to develop a “supercomputer” at Starbase, its launch facility and company town in Texas.
Deutsche Bank analysts, who spoke to CNBC, have warned that SpaceX’s computing expansion in Texas may face delays. They said the company could need to raise capital spending to comply with stricter regulations expected to govern data centre development.
CNN first reported, citing an aide to a Democratic senator, that Musk and SpaceX had been instructed to retain records related to restrictions on a military version of Starlink in Ukraine. Those restrictions limited Ukraine’s ability to defend itself against Russian attacks.
Regulatory scrutiny could also jeopardise Musk’s proposed merger of SpaceX and Tesla, an idea he has promoted while acknowledging that it would first require shareholder approval.
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