On Thursday, shares of SpaceX and Tesla fell approximately 9% and 11%, respectively, contributing to a staggering loss of over $420 billion in market capitalization since Tuesday.
This decline coincided with a broader sell-off in the tech sector and reflects investor anxiety regarding increased regulatory oversight following the midterm elections, where Democrats gained control of both the House and Senate.
Despite Musk's substantial financial support exceeding $470 million for GOP candidates, many of whom lost their races, analysts from Deutsche Bank noted that SpaceX might face headwinds due to anticipated stricter regulations, particularly concerning data center approvals in Texas.
The new governor-elect, Gina Hinojosa, has called for a moratorium on new data center approvals until stronger protections are established. This regulatory environment could delay SpaceX's ambitious projects, including a new data center and semiconductor factory in Grimes County, Texas.
Additionally, Musk's wealth has seen a significant drop, falling below $800 billion from a peak of over $1 trillion, although he remains the richest person globally. The potential for regulatory scrutiny could also hinder Musk's plans to merge SpaceX and Tesla, which would require shareholder approval.
Overall, the recent political developments and their implications for regulatory policies pose a significant risk to the future growth and operational capabilities of both companies